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VO LU M E 47 I I S S U E 5

M AY 2 0 1 4

TAKING IT PRIVATE ….WHY SOME RETAILERS STILL SEE STRENGTH IN PRIVATE LABEL PLUS:

THE 2014 BRAND STRENGTH TOPLINE REPORT PAGE 18


Volume 47 I Issue 5

May 2014

Publisher & Editor In Chief James Hartford james@sportsonesource.com 303.997.7302 Senior Business Editor Thomas J. Ryan tryan@sportsonesource.com 917.375.4699

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MAY 2014

THE BRAND STRENGTH REPORT ISSUE

BEST PRACTICES 4 All About Branding SGB I ONE-ON-ONE 6 Scott Kerslake President and CEO, prAna Living, LLC FEATURES 8 Going Private Private Label Brands Destined to Grow

12 Micro Brands Outnumbering Big Brands In Run Speciality 18 Brand Strength Topline Report 2014 32 Calendar Industry Events

On the cover: Bradford Shellmammer who gained acclaim as a designer and co-founder of Fab.com, is Backcountry.com's new Chief Design Officer charged with examining the retailers private label brand positioning. Photo courtesy Backcountry.com

2 MAY 2014

Page 18

Brand Strength Topline Report

2014


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B E S T P R AC T I C E S

ALL ABOUT BRANDING By William F. Kendy

"...a brand is not what you say it is. It’s what customers say it is.”

D

efining what branding actually is and your relationship to that brand is like trying to explain why you like a piece of art. You may not know what is good but you know what you like. Branding is not just a corporate identity program that insures continuity of messages delivered to the consumer regardless of the media used. It’s not just about logos or product lines or even products. It’s much more than that. A brand is the result of managing a number of things, such as marketing, sales, distribution, product quality and other components to create a positive emotional tie to a consumer. In his book The Brand Gap, author Marty Neumeier defines a brand as: “A person’s gut feeling about a product, service or company. It’s a gut feeling because we’re all emotional, intuitive beings, despite our best efforts to be rational. It’s a person’s gut feeling because in the end the brand is defined by individuals, not by companies, markets or the so-called general public.” “While companies can’t control this process, they can influence by communicating qualities that make this product different from that product,” said Neumeier “When enough individuals arrive at the same gut feeling, a company can be said to have a brand. In other words, a brand is not what you say it is. It’s what customers say it is.” Businesses can control brand equity and there are thousands of companies in different industries that have created strong professional and emotional brand bonds with customers. One of those companies that have a customer devotion and loyalty is Harley-Davidson.

4 MAY 2014

Harley Davidson customers will spend tens of thousands of dollars on motorcycles, branded clothing, and riding accessories. They go to great length to make sure that their bikes are clean, polished and showcased. Some of them are passionate enough to tattoo the Harley Davidson name or logo on their body. That is product and brand Loyalty. Jon Schallert is president of The Shallert Group, Inc. a company that specializes in destination brand marketing, believes that branding is an emotional, visual, rational and cultural image that consumers associate with a company, product, retailer or location. “The emotional part of the mix is the most important because until someone has connected emotionally with a company there isn’t a bond,” said Shallert. “The Gerber baby is on every jar and product manufactured by Gerber and has high recognition and emotional leverage with consumers,” said Shallert. Harley-Davidson has customers for life. Gerber has customers for life. That loyalty and brand attachment equates to mind share for those products. Mind share is the portion of the consumer’s brain that is owned by a particular brand in a particular category. If you are going to take a child for a hamburger and a fun time, McDonalds comes to mind. If you need some hardware or products for a home project, Lowes and Home Depot are top-of-mind options. While product and manufacturer branding is expensive and takes time to build, powerful branding leads to powerful recognition, interest and sales. So What Does All This Branding Stuff Have To Do With Retailers? Retailers have to recognize the “Sell-in and Sell-thru” channel distribution concept. The “Sell-in” part of the equation is all about manufacturers moving merchandise out of their warehouses to either distributors or directly to retailers. Distributors want to move those same products to retailers. Once a dealer is stocked, the manufacturer or distributor’s merchandise delivery part of the job (for time being) is done. Then they can offer product training, territorial development funds, sales and merchandising support, co-op advertising programs and other business tools to assist the retailer in moving products into the hands of customers. One of the things they rely on is manufacturer product branding efforts to help build credibility and that is a major component of the… “Sell-Thru” Factor It’s important that retailers align themselves with the core brands that they carry and especially the ones that constitute the majority of their sales in a category. Most of the time these are major players who spend a lot of money in positioning themselves in the marketplace, building brand image, spending millions to create credibility and trust and trying to expand their share of the consumer “sandbox”.


Retailers should ride those brand image coattails, take advantage of the good will built up by the brand and make sure that the public knows that those products are available at their store (especially through co-op advertising programs). The higher your “sell-thru” the higher your turn ratio will be and the more profit you make. News Flash…The Store Is The Brand. Retailers should never forget that, regardless of what products they carry and what services they offer, their store is the brand and perception is reality. Manufacturers want to sell what they make. Distributors want to sell the products they represent. Retailers want to sell everything they buy as soon as they can, at a high margin, as efficiently and cost effective as possible so they can buy and sell more merchandise. Frankenmuth, MI is a town of destination. It is a quaint, clean, safe little town with nice gift shops and restaurants and has a special ambience. One of the hinge pins of Frankenmuth’s success is a store called Bronner’s Christmas Wonderland. Bronner’s is a store of destination for people who are into Christmas. It has approximately 300,000 square feet devoted to everything Christmas. If you can’t find a Christmas related item at Bronner’s, it doesn’t exist. The store is open 364 days a year (guess on which one they are closed) and draws bus loads of customers from all over the country and world.

When it comes to retail branding the question is…why do you buy from a certain store? Is it specialty? Is it location and easy parking? Is it price? Is it selection of branded merchandise? Is it hard to find merchandise? Is it friendliness, knowledge and professionalism of staff? Is it hours of operation? Is it special services? Is it layaway or financing? Is the store (and bathrooms) clean, smell good, well lighted and inviting? Or is it all of the above? The larger and most important question is…what do you want to be known for as a retail brand? In the advertising and sales world there is the established concept of a “Unique Selling Proposition”. A USP is what message a business is trying to get across to the potential customer, be it through a specific advertising campaign or sales scenario and how to position and differentiate it from competitors. Schallert believes that retailers and areas of destination need to address the “Unique Selling” components of the USP.

“Retailers need to ask themselves why they are different from every other business in their industry that customers have ever heard about and why you are what you are,” said Schallert. According to Neumeier the litmus test of a brand is to have legitimate answers to the following three questions. While these are meant to be applied to products and lines, they have application to retailers as well : »» »» »»

Who are you? What do you do? Why does it matter?

The first two are easy to answer. The third one is the toughie and requires some soul searching. Why does your being in business matter to a customer? Coming up with a legitimate answer means looking at your operation and positioning it from a customer’s point of view. Effective retail branding equals devoted, happy, money spending customers for life who will be your champions and preach the gospel about your business. ■


Amy Ippoliti, prAna sponsored athlete, swims with a 1500 pound Manta Ray. Photo courtesy prAana

SGB I ONE-ON-ONE

SCOTT KERSL AKE PRESIDENT AND CEO, PRANA LIVING, LLC By Charlie Lunan

6 MAY 2014

B

y most entrepreneurs’ standards, Scott Kerslake made his mark a full decade ago when he sold his seven-year-old company Athleta to a private equity firm. But his success as CEO of the lifestyle apparel brand prAna, LLC shows he is far from done. Since taking over the reins at prAna in 2010, the company’s sales have grown at an annual compound growth rate of more than 30 percent and are expected to reach $100 million this year. That got the attention of Columbia Sportswear Company, which announced in early May that it had agreed to buy prAna for $190 million, or roughly 2.8 times what the market said the company was worth in 2008. Columbia CEO and Chairman Tim Boyle said he looked forward to working with Kerslake and his team to “unlock prAna’s global brand potential” as more consumers gravitate toward brands that promote healthy, active and sustainable living. Given the focus of this month’s Brand Strength Report Issue, SGB thought it a propitious time to get Kerslake’s take on brand building. Excerpts from our conversation follow.


What tools, metrics and other methods will you use as you try to gauge how far you can extend prAna ’s brand and distribution without undermining, diluting or otherwise jeopardizing it's values? My sense is that extending a brand is a combination of interior signals (intuition) in combination with exterior signals (customer feedback). Measuring the former is challenging because it could very well be that the brand becomes very near and dear to customers in a way that you had not envisioned. So giving it the space to evolve in unexpected ways is important, all the while making sure it doesn’t crash through the guardrails of the principles that are foundational to the brand. Abandoning your foundational values or ‘reasons for being’ is critical. And with respect to exterior feedback from customers, sales metrics (conversion, average order values) speak volumes about how your brand is being perceived and how successful you are at connecting in a rational and emotional way. What one or two brand management mistakes do you guard against most when building a brand? I would say the biggest mistake brands make is losing their compass and reasons for being. I think there are a lot of brands - particScott Kerslake, ularly in social media and techPresident and CEO, nology - that are in search of a prAna Living, LLC business model, like a hammer looking for a nail. The word, ‘no’ is often more important in strategic planning than the word, ‘yes.’ For us, we are very clear on two foundational principles: One, that we come from an active heritage and a big part of our job in designing apparel is to make sure that style is at the forefront of what we do; and two, we are a company that is very value-based and sustainability is a vital focus for us. That is our compass. What’s changed about building a lifestyle brand today compared to when you started athleta in 1997? First and foremost, the active lifestyle category is much more competitive with everyone trying their hand at being an ‘active’ brand. So authenticity becomes even more important, particularly because customers have become more and more discerning. If you are truly authentic, it’s a leg up on the competition, who are just chasing the dollars. Customers have a great B.S. meter and have social media as an extension of themself to communicate their affection or dislike of a brand – and because there are so many brands and transactions are so much easier these days with the Internet – there isn’t a lot of room for mistakes. Every business is hard, but I happen to think a multi-channel apparel business is one of the hardest because it has so many moving parts. You can execute perfectly on 11 of the 12 moving parts, but if you get the 12th wrong, you are sunk.

The term “lifestyle brand” is thrown around a lot in the outdoor industry. What makes a true lifestyle brand in your mind and why is it important? Every human being is different and lives a slightly different lifestyle. For us, we look at a couple of big macro trends that seem to be coming together, and are consistent with our customers - and with a large part of the population. First is that more and more people are leading active, and healthier lifestyles. People care more about their health and whether it’s how much exercise they do or the quality of the food there are putting in their bodies, it’s a much larger priority than it was even 10 years ago, let alone 20 or 30 years ago. Second, people are becoming more aware of how their products are being made: what materials are being used, what chemicals are being used, what type of conditions the products are being made in, and how all of this effects people who are making the products. Consumers are becoming much more conscious and discerning. These are unmistakable trends and this is one of the reasons we define ‘lifestyle’ the way we do. On a broader level, most brands are aspiring to connect with their customers in an emotional way and trying to reflect the values of the people they are serving in both authentic and aspirational ways. How does prAna stack up against larger brands like Lululemon and Athleta in this regard? The difference between us and Athleta is prAna could appeal to a much broader range of customers than it has focused on. It is a multi-gender brand. The men's business is the fastest growing part of the business and there is a lifestyle aspect to the brand. We’ve got a lot of authenticity and heritage here as opposed to many of the brands jumping into it. PrAna has great roots in yoga and climbing. Most people don't think of us as a yoga company or a climbing company. We have a much broader product line and much broader appeal. We have synthetic, very technical product and natural fibers and we are seeing equal growth in both. We’ve built a good mid-layer and outerwear business with very different positioning than others in the space with much more style in all-day-long, or even all-week-long assortments with a little bit more of an urban flair to it. Our sweaters have also done very well and our swim and water collection sales have been off the charts. We are filling a gap in the market that is very apparent to us for an active travel, swim/surf/SUP, go on vacation product that has done very, very well. So in some ways we have a broader range than Athleta. ■

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Going Private Quick. Name the five top selling athletic/outdoor apparel brands in the United States in 2013. Well number one is easy; Nike. The next two are pretty predictable: Under Armour and The North Face. But can you guess number four and five? By Charlie Lunan and William F. Kendy

A

didas took the number five spot, but right behind it was private label, according to point-of-sale data compiled by SportScanInfo. And that was down significantly since 2010, when private label apparel brands accounted for a combined 12 percent share of sporting goods apparel sales, put them second – albeit a distant second - behind Nike. In the last three years, private labels have lost about half their share of the market as consumers shifted back to national brands. The change came so fast that Perry Ellis International, Inc. will exit 20 of its lowest margin private label programs representing $62 million in revenues in 2014 so it can focus more resources on its core Rafaella brand. In 2015, Perry Ellis plans to jettison five more private label programs representing $20 million in revenue. Company executives say the largest decline in private label sales has come at mid-tier retailers, where sales of private and proprietary brands fell more than 20 percent as regional department stores focused on reducing inventory amid soft holiday sales. But don’t be mistaken. Private label brands are destined to grow, not shrink, their share of the sporting goods market if big box and online retailers have their way. “Private labels have flattened out in the last year,” said Jamey Boiter, principal in charge of brand innovation for the Charlotte, NC Bolt Group, a company specializing in brand building and product innovation. “A recession helps private labels. In the years 2007 to 2012, high-end shoppers were doing low-end shopping and then moved back up for branded products. But that certainly doesn’t mean private labels are going away.” More Alluring Than Ever One of the primary advantages of private label brands remains promotional flexibility and that has only become more alluring in the last five years as many premium athletic, cycling, ski and outdoor brands have rolled out or tightened up minimum advertised pricing, or MAP, policies and dealer agreements to rein in online discounting.

8 MAY 2014

Retailers have always had a love/hate relationship with MAP policies and generally speaking the bigger they are the more they hate them. On the one hand, they provide a floor under retail prices and dealer margins. On the other hand, they greatly compromise a retailer’s ability to compete, particularly online, where algorithms can suddenly send retail prices plummeting. Some mom and pop retailers complain that interpreting what a brand’s MAP policy does and does not allow can take hours. Moreover, since anti-trust law requires vendors impose MAP policies unilaterally to all dealers to avoid allegations of price fixing, the policies limit how creative a retailer can get with a promotion. This is increasing interest in private label among many mom and pop retailers, according to David Nacke, vice president of merchandising for Nation’s Best Sports (NBS), a buying group serving 300 members operating more than 800 retail sporting goods stores in the United States and Canada that have a combined retail volume in excess of $3 billion dollars. “If a retailer isn’t large enough to meet a minimum order quantity in order to buy direct from a manufacturer they are at a price and margin disadvantage, especially when dealing with the MAP issue,” said Nacke. “Private labeled products offer greater margins then most branded items and more flexibility in pricing and promotion.” NBS is focusing its private label efforts on commodity items where there is an opportunity to offer more value. “Private label products are on the increase and can help fill voids in product offerings and prices but I don’t think they will ever replace national brands,” said Nacke. “Traditional brands are technologically and market driven and private labels are using them as a proving ground.” The View From The Big Boxes That’s certainly been the case with the industry’s largest retailers, which have laid out aggressive plans to expand the private label sales in coming years in a bid to build margin.


Cabela’s-branded gear helped drive up the retailer’s merchandise margin by 170 basis points from 2009 to 2012, when it reached 36.3 percent. In 2013, private label products accounted for 30 percent of Cabela’s merchandise sales, or nearly $1.0 billion, but they will play an even larger role as the retailer rolls out its stores to smaller markets, where its research shows Cabela’s brand equity is as strong, or even stronger, than some of the national brands it carries. “In a market like Dallas, Fort Worth, the Under Armour brand is really big in our stores, whereas in a smaller market, there's more of a bias to Cabela's merchandise,” Cabela’s, Inc CEO Tommy Millner told analysts in late 2s013. “So we're going to be really focused on the Cabela's brand in these smaller markets.” In the first quarter of 2014, private label penetration increased to 58.7 percent of Cabela’s softgoods and footwear sales as consumers embraced Cabela’s Guidewear apparel and XPG - Extreme Performance Gear – a line of lightweight outdoor gear that includes boots with Vibram soles, shirts with Cabela’s own Cool Phase wicking fabric and tents made with the same DAC poles found in tents sold by premium specialty outdoor retailers. “We have significant runway still ahead of us particularly in hard goods,” said Millner. “Our goal is to continue to grow that and the reason to grow it is that there is an 800 to 1200 basis point advantage in margin.” Cabela’s hardgoods’ brands include Euro Optics spotting scopes, and Northern Flight Waterfowl bags, decoys and blinds for hunters. Millner has stressed to analysts and investors how the higher margins from private label products are softening the impact on merchandize and gross margins as gun and ammo demand and supply come back into balance. Cabela’s has noted that the 2012 to 2013 boom in firearms sales helped boost margins on some firearms categories by as much as 500 basis points. At Dick’s Sporting Goods, executives expect to grow private brand sales from $730 million in 2013 to $1 billion by 2017. Its strategy has been to build a portfolio under licensing deals that give it exclusive rights to design and sell products under established sporting goods brands. For instance, it has rights to use adidas’ trademark on baseball

In the first quarter of 2014, private label penetration increased to 58.7 percent of Cabela’s softgoods and footwear sales as consumers embraced Cabela’s Guidewear apparel and XPG - Extreme Performance Gear. Photo courtesy Cabela's

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gear, cycling gear under the DBX and Nishiki marks, outdoor apparel and gear under the Field & Stream and Quest brands, golf gear under the Maxfli, Slazenger, Top-Flite and Walter Hagen brands, and performance apparel under the Reebok and Umbro brands. Dick’s has had so much success with Field & Stream that it plans to roll out a new, multi-brand outdoor specialty store concept under the Field & Stream banner to 55 locations by 2017. Recreational Equipment, Inc., the nation’s largest retailer specializing in human-powered outdoor recreation, earned about 20 percent of its sales from its REI branded apparel and camping gear and Novara branded bicycles and cycling apparel in 2013. REI’s Canadian counterpart, Mountain Equipment Co-op, relaunched its brand and introduced a new line of more urban friendly apparel last year as part of a new strategy that seeks to distinguish it from outdoor specialty shops operated by the much larger Forzani Sports Group and a rising tide of online competitors. Could E-tailers Be Next Some foresee the next wave of private label growth in the sporting goods industry coming from pure-play online retailers like Backcountry.com. In March, the outdoor specialty retailer announced it had recruited Bradford Shellhammer, who gained acclaim as a designer and co-founder of Fab.com, as its first chief design officer. Among other duties, Shellhammer has been charged with helping Backcountry design a line of premium base layers in silk and merino wool that will launch this fall. A more ambitious collection that will include some technical pieces will follow in spring 2015. “Brad is one of best design eyes I've come across,” noted Backcountry’s Chief Marketing Officer Scott Ballantyne, who worked with Shellhammer as CMO at Fab.com before joining Backcountry.com in March 2013. “He will help us with style, colors and fabrics and trends. We have a really, really loyal following at Backcountry.com. People really seem to love our logo and we will move it into everyday base layers and technical jackets.” The challenge for Backcountry.com and big box retailers alike is to find the right mix of private label and national brands that provides the choices consumers want. And some categories are more permissive than others. Charlotte brand consultant Boiter advises retailers to use private labels to create a “good, better, best” situation within the halo of national brands that help give them legitimacy and authenticity. “For example, Dick’s Sporting Goods manufacturers Walter Hagen golf clubs at a certain price point, but they also sell TaylorMade and others at different levels,” he said. “It is a channel strategy that allows a retailer to sell a brand and products that a competitor can’t sell at a higher margin. That product choice is another way for retailers to differentiate themselves from their competitors.” In an era when most major sporting goods vendors are intent on growing their direct-to-consumer sales, that’s a strategy that is poised to grow. ■

10 MAY 2014

Dick's Sporting Goods has built up its private brand business in part through exclusive licensing deals with established sporting goods brands. In this photo, all the Reebok Cross Fit Gear is designed and sold exclusively by Dick's Sporting Goods under license with Reebok. A similar licensing agreement with adidas authorized Dick's to make baseball gear under the adidas trademark. Photo courtesy Dick's Sporting Goods


WMIMay2014.pdf

1

5/1/14

10:02 AM

FAMILY OWNED

USA|MADE

BEYOND T-SHIRTS AND CAPS

wigwam.com

By Charlie Lunan and William F. Kendy

Beyond screenprinting T-shirt blanks or embroidering baseball caps, there seems to be little mid-sized hunt and fish, outdoor, ski and cycling shops can offer customers in the way of private label products. But the times, they may be a changing, according to Mike Mendoza, marketing director for 3D Industries, which owns a factory in China that makes rain gear and technical bags and manufactures apparel for a wide range of motorsports, surf and other sports brands. Mendoza said Chinese manufacturers are on the verge of offering blanks for brands and retailers that want to create their own technical apparel, including waterproof/breathable outwear. He foresees a day when retailers will be able to use online “configurators” to customize technical outerwear and other apparel just as consumers do today to customers for everything from Timberland boots to Princeton Tec headlamps. “That's definitely on the horizon,” said Mendoza. “In fact we are looking at just that; specializing in serving that independent specialty channel. China is getting a lot more intelligent on the manufacturing side. They are becoming much more intelligent about trends and then turning that into a blank.” While that could be a an opportunity for large pure-play online retailers, most independent retailers said they still can’t get the numbers to work on private label. “As much as we’d like to get into private labels, at this time we don’t have critical mass in customer demand, the time and revenue we need to source product under our own banner,” said Jason Larsen of Al’s Sporting Goods in Logan, UT, a full line sporting goods store. “We’ve encouraged our buying group, which is NBS to pursue private labeling because it puts us in a position to offer products that are a little more unique.” Jay’s Sporting Goods, a Michigan-based hook-and-bullet retailer with significant online sales, opted to pass on private labeling after a careful analysis. “We considered the private labeling option and specifically decided not to get into that area,” said Jay’s President, Jeff Poet. “We didn’t find that many holes in product lines or a segment of the market that didn’t have product or price options.” Poet has stayed the course of partnering and working with the branded products and taking advantage of the market equity and support they offer. “A lot of research and promotion goes into the establishment of an accepted brand and we felt additional products would just dilute and cloud up the merchandise mix,” said Poet. “There is product education, sales and marketing support and other tools that we can utilize to help us sell nationally branded products.” ■

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12 MAY 2014


Micro Brands Outnumbering Big Brands In Run Speciality By Scott Boulbol

I

f a runner from 20 years ago walked into her local running shop today she would certainly feel a bit overwhelmed by the enormity of brand selection and the extremely specific needs or preferences each different shoe may fill. Not to mention the in-your-face colors! Most of that breadth of selection can be attributed to the vast proliferation of micro brand, or niche’, running shoes over the last 15 to 20 years, and especially in the last 10. A market that was until recently dominated by a few big brands has exploded to the point where the big brands may actually be outnumbered by micros in some shops. Names like Newton, Inov-8, Altra and most recently Hoka One One have seen massive growth in recent years, and have become household names among runners. And other, newer brands like SKORA and On are gaining ground quickly. What most of these brands have in common, that the big guys often don’t, is a willingness question to the established norms: to address the huge array of runners’ biomechanics, and/or the wide array of running styles, terrains, etc. Or even to refute entirely what we think of as proper running technique. “I think the reason why there might have been fewer in the past could be a result of people working with the larger brands on their ideas,” said Amanda Charles, District Manager of the Boulder Running Company. “I think the dream of being an entrepreneur is stronger than it has ever been, and people are utilizing the numerous opportunities for networking to go it alone; opportunities for micro brands to present in front of the right stores through retailer show options and various networking engines have also enabled more to flourish than they might have in the past.” The micro trend arguably started in earnest in the late 80’s and early 90’s when trail running became all the rage, and shoe companies jumped on board to offer trail-specific shoes. But even then, it was mostly big name companies adapting road shoes to handle the trails. Now we see startup companies completely redesigning shoes from the ground up, with different cushioning, lasts, upper and outsole materials, etc. The classic example of course is Vibram and their Five Finger shoe which, despite an abundance of early skepticism, shattered traditional designs and ideology, and earned huge profits. What this means for retailers, in specific running specialty, is a huge opportunity for growth. It also means hard work and some tough

SPORTSONESOURCE.COM Photo courtesy Inov-8

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on new micro brands – especially when the technology is substantially divergent. Risks can include taking on a brand before the supply chain is dialed, or the trend losing steam resulting in overstock, or technology ultimately proving unhelpful or even dangerous, among others. “Bringing in an experimental vendor carries a lot of risk, and it is rare that they’ve turned into a long time part of our mix,” admitted Bjorken. “Especially since the interested clientele base – early adopters, serious runners, triathletes – often look for and expect a deal, so full-price sell-thru usually ends up being very weak. I look at what my up front investment is going to be, how likely I am able to remain in stock in key sizes, how likely it is going to be a positive contributor to our margin plan, and what the vendor is doing to drive interested consumers to our door.” She recommended a conservative approach. “I always tell vendors that they’ve got one chance, and if it fails, they’ll never recover – not with me, but with our staff – so if the product is not dialed in, it’s better to wait,” she added. “Hoka for example, did not have a women’s specific last until this year, and as a result their women’s shoes fit terribly. Almost 60 percent of our customers are women… If I’d brought in product before they had styles that fit 60 percent of our customers and our female staff, Hoka would have been dead in the water. So we waited, despite the buzz.” They now carry the brand. And then there’s the trend issue. Five Fingers created a huge buzz for quite a few years, but then quickly faded as more functional shoes borrowed some of the ideas but combined them with more conventional tech. “We HAD to have them to maintain credibility,” said Lee Silverman, owner of Jack Rabbit Sports, of the Vibram shoes. “But they're actually very hard to stock, and demand for them took a nosedive leaving some retailers in the lurch…” Despite the risks, however, many proprietors are eager to test the waters, and say it can pay off well in the end. Hawk Harper, owner of Runner’s Corner in Arizona, said, “What you might find is that your customers Photo courtesy Newton Running will take off with a micro brand and it will become a hit. That's what happened with Altra which has become one But with that opportunity comes the responsibility to provide solid information to the of our top three brands,” he said. “A few years ago Five Fingers consumers. These shoes can often come across as a fad without proper knowledge on the were consistently in our top five. So you always give the micros a retailers’ behalf. Most of these brands offer in-store clinics, product testing programs, chance hoping that one will take off. It's worth the try. Not all will online training, etc., because much of the technology and designs can often be groundbe an Altra… but that's what makes this industry fun.” breaking and even downright revolutionary, as with Vibram. Golden Harper, founder of Altra, explained that when they began experimenting with zero-drop outsoles for instance – a huge departure from the usual shoe design – it Newton was only through expensive research, video analysis and loads of trial-and-error that he Officially founded in 2007 by Newton Running founders Danny could prove his theory that zero-drop shoes allowed runners to run as if barefoot or in Abshire and Brian Russell had tried for more than 10 years to sell its racing flats and spikes. That science is instrumental in convincing retailers and often- technology to existing shoe companies, but they weren’t interested in this new approach – shoes that did not change or get in the way of skeptical consumers. Along with opportunity for growth, however, comes substantial risk for retailers taking running naturally. So they simply created a new brand, and the rest decisions, plus a good deal of risk. These brands will certainly bring consumers through the doors. Most agree though, that either way, they’ll bring runners into specialty shops. “Early adopters and serious runners look for certain new technologies and innovation when they read or hear of them, or see them on other runners whom they respect,” explained Johanna Bjorken of Jack Rabbit Sports in NYC. Charles agreed: “There is often a craving for something different, something unique. Being able to offer the experience of something that you cannot find everywhere is something that has been integral to BRC in our growth,” she said. “While it may not be what they choose to buy in the end, it opens the doors for opportunities for other mainstream product to be considered.” Offering something different is even more appealing for specialty retailers considering the big box stores often carry the mainstream brands like Nike and Adidas for much cheaper. But they often eschew the micro brands, since their typical consumer may not be as well versed in the latest technology, and is happy to buy an “old-faithful” instead. So independent shops can make up the difference selling these niche’, and often high priced, shoes.

14 MAY 2014


is running history. Each model of Newton shoes features a raised section of four (and a new option for five) additional lugs under the metatarsals to promote a forefoot or mid-foot Newton Running Gravity III landing. There are three and Distance III “P.O.P Platforms” each with two models to choose from: P.O.P Platform 1 the stiffest (and therefore most responsive) and most aggressive; 2 offers a smoother transition, and 3 is the softest, and most traditional-feeling. Now in over 600 stores nationwide, the company will launch 20 new models for 2014, designed to address every runner of all abilities. Key Products incude Gravity III a neutral mileage trainer; P.O.P 1 platform; 7.5oz; 3mm drop which retails for $175; and Distance III a neutral speed trainer; P.O.P.1 platform; 7.2oz; 2mm drop for $155 retail. "Our shoes are unique to the industry in that they deliver a better run to anyone who puts them on. With patented technology to ensure gait efficiency, plus a unique and bold choice of colors and styles, our retail base continues to grow because our product simply makes running better."

natural running. A foot shaped toe box enhances stability, balance, power, and comfort, with a variety of zero-drop cushioning that caters to specific needs of different runners.”

Altra

Hoka One One

In 2009 Golden Harper and co-founder Jeremy Howlett started comparing video of runners at his shop in traditional heel drop shoes versus its modified zero-drop prototypes (a phrase he said he coined for better marketing), and his theory that these would run more naturally, like flats or spikes, was independently verified. They began selling the modified shoes, eventually selling about 1,000 pairs that year - thus Altra was born. Altra specializes in road and trail shoes with zero-drop outsoles, but with a variety of cushioning levels from minimum to maximum. All also feature a wider, more squared-off toe box for a more natural toe splay. Altra is now sold in 700 stores, and they’re on the verge of taking over giant Adidas as the seventh largest running specialty brand in the U.S. Key Products include Instinct II a moderate cushioned, do-it-all trainer; 9.5oz, 25mm stack (zero drop) for Altra Olympus $105 retail; and the Olympus, a max cushioning shoe for ultra running; 11oz, 36mm stack (zero drop) for $130 retail. “Altra offers the cushioning, support, and comfort of a traditional running shoe with the form-improving, impact-reducing benefits of

Before ultramarathon star Karl Meltzer donned his first pair of Hoka One One shoes – and went on to win his next two 100-milers – Co-founders Jean-Luc Diard and Nicolas Mermoud put three years of research and development went into this game-changing, ultra-cushioned design. Bucking years of the industry’s recent trend toward less and even no cushioning, they sliced, drilled, glued and cooked their way to the final design – with over double the outsole cushioning of traditional kicks. Thus began the hot new trend of “maximum cushioning” running shoes. What were early on dubbed clown shoes by others on first sight, are now available in around 600 stores. Key Products include the Conquest a lightweight, high-mileage trainer, oversized outsole; 29mm heel (4mm drop); 11.8 oz at $17 retail; and Mafate 3, a women’s high-mileage trail; oversized outsole; 33mm heel (4mm drop); 12.9oz; for $150 retail. Hoka One One Conquest “Hoka One One has engineered a unique performance midsole geometry that features a higher volume, softer density, and greater rebounding foam than standard running shoes. Along with maximal cushioning, this provides runners of all types with an energizing, stable ride. We also incorporated minimum drop geometry along with a rolling rocker design to promote consistent rhythm in the runner's foot strike.”

On Co-founders Olivier Bernhard, product development, and Dr. Caspar Coppetti, business and marketing manager along with Ted Goodlake, North American sales director wanted to create true high performance, ultra-light running shoes – but shoes that would also allow runners the same ground feel Bernhard remembered as a young cross-country competitor. After testing what they called cupboards full of prototypes, their final hollowed-out lug design accomplished this. Less than four years later, On has gained significant market share in Europe, with over 650 doors, and is currently making strong inroads in the U.S. specialty run market with 250 doors, and a goal of 400 by year-end; e.g., their five models share On Cloudrunner the hollow lug design, which is said to compress to provide cushion on landing, but then firm up for a more powerful push-off. Key Products include the Cloud with lightweight cushioning; 7oz; 6mm drop retailing for $110; and the Cloudrunner a stability and endurance on or off road shoe; 11.1oz; 7mm drop; retailing for $150. “Retailers like On solve the problem of keeping runners healthy in a completely different, yet very attractive way, by providing the only cushioning system on the market that only cushions during the landing, and does not get in the way of a firm and responsive push-off.” – Caspar Coppetti


La Sportiva A family-owned company based in Northern Italy, La Sportiva has been making specialized technical footwear since 1928. They moved into the running shoe business in 2002 with strong success over the years in retail and racing, and are led by Lorenzo Delladio, CEO La Sportiva Global, Jonathan Lantz, president La Sportiva NA, and Matteo Jellici, director of R&D. They’re sold in a few hundred stores. There are several models that run the spectrum from near minimal to more cushioning and protection, and always with a focus on maximum traction. Key Products include Bushido, a technical trail runner; high traction; 6mm drop, 9.8oz; for $125 retail; and the Wildcat 3.0, a high stability trail runner/long-haul backpacker; 12mm drop, 13oz; for $115 retail. “La Sportiva shoes fill a niche for specialty retailers who want something in their stores that are different from traditional roadrunning brands. When you try on a La Sportiva shoe, the fit is one of the first differences that a consumer feels, and the traction from our FriXion outsole compound is another feature that sets us apart – both La Sportiva Bushido thanks to our 86 years of and Wildcat 3.0 experience in footwear.

SKORA Long-time runner David Sypniewski, founder and CEO, had experience repetitive use injuries from running back starting in 2002. He discovered barefoot running, and it helped his injuries heal and they didn’t come back. But he needed some foot protection, so he made socks covered in latex rubber, an experiment that ultimately led his own creation – a shoe that mimics the shape of the human foot. Now along with Chief Designer Richard Kuchinsky, Sypniewski’s shoes – available in 30-plus retailers and growing – feature SKORA FORM and FIT zero-drop outsoles, with minimal or no padding other than a rubber outsole, wider toe boxes for natural toe splay, and some feature highend Pittard’s goat and/ or sheepskin leathers for durability and water resistance.

16 MAY 2014

Photo courtesy SKORA

Key Products include FORM a Performance trainer with Pittards goatand sheep-skin leather; asymmetrical lacing; zero-drop, 8.2 oz; at $180 retail; and FIT a higher-mileage trainer with seamless upper; 16mm stack, zerodrop, 8.2oz; at $95 retail. "We're finding time and time again retailers appreciate our attention to detail, natural yet non-traditional designs, and a return to quality craftsmanship. Consumers not only demand these characteristics from their footwear, they deserve them."

Inov-8 Ten years ago Founder Wayne Edy had an idea for a niche brand: Allow the foot to control the shoe, not the other way around. But traction could not take a back seat, especially critical with the Fell running tradition at which these targeted early on. They design the cleats first, and they adapt the outsole to that design. Only when that is dialed do they start to design the upper around that platform. Now in about 500 stores, and under the direction of newly hired CEO Gordon Baird, they offer product for off-road and road. They place a heavy emphasis on light-weight and traction – in fact

the shoes are all named after the outsole and weight. They’ve made big gains in the fitness world too, after hearing from athletes that their shoes worked great for their workouts. Key Products include Raceultra 290 a cushioned trail ultrarunner; gaiter attachment; 8mm drop, 290g; priced at $140 retail; and Trailroc 246 a women’s high mileage trail trainer/racer; neutral support; 6mm drop; 8.7oz; priced at $120 retail “With the multiple brands in the Crossfit and off road space, Inov-8 brings a unique

Inov-8 Trailroc 246

perspective that attracts customers and retailers. We strip everything back and approach the shoe from the athlete perspective – how can it be made to allow the athlete to perform their best. We, like our athletes, operate at the extremes of sport, and we never settle. “As a brand, we believe that in the pursuit of excellence, there is no finish line, only continued development with a good deal of sweat thrown in.” – Wayne Edy ■


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Contact 303.997.7302 or email SportsJobs@sportsonesource.com SPORTSONESOURCE.COM

17


Brand

Strength Topline

C

Report

onsumers in 2014 continue their post-recessionary behavior by placing the greatest importance on quality of product when purchasing footwear, apparel, and equipment to support their active lifestyle. Quality of product continues to be the highest rated factor influencing consumer’s purchase of all three categories. Consumers have a strong preference to pay more for quality and receive the benefit of its longer use. Consumers rely on their own personal experience with brands, placing greater importance in 2014 on their knowledge and trust of certain brands than they did in 2011. Fewer consumers are influenced by price, which continues to drop in importance over time, and is surpassed in influence by innovation/technology in 2014. Consumers want product that enhances their activities, allows them to perform better, and

gives them an edge over the competition or their own personal best. In the current environment where social media apps such as Strava continue to play an increased role in the way in which an active consumer participates in sporting activities, the return to the brands is an increased trust factor from the consumer and the subsequent benefits that go along with it. Nearly half of all active consumers believe a brand’s environmental initiatives are important in 2014, which is a substantial rise from 2011. Consumers place a high expectation on the brands that they trust to also be focused on

minimizing their environmental impact. These observations are highlighted in this year’s Brand Strength Report, which summarizes the bi-annual consumer survey conducted by The SportsOneSource Group to measure consumer awareness, attitude, and intent to purchase active lifestyle product from specific brands. The Brand Strength Report was expanded in 2014 to include sports and outdoor equipment and consumers were also asked to offer their feedback on an expanded brand list. The following is a sampling from the complete Brand Strength Report.

For details on how to order the full Brand Strength Report, contact Bethany Cooner, Director of Market Research, The SportsOneSource Group, 303.997.7302 or email BSR@SportsOneSource.com. BrandStrengthReport.com SPORTSONESOURCE.COM

19


Brand Strength Index The centerpiece of the Brand Strength Report is the Brand Strength Index, (BSI), a rating system developed more than seven years ago by The SportsOneSource Group to more effectively measure and assess the overall consumer perception of a specific brand. Each brand measured was tested across four main criteria and those criteria individually weighted to reflect their importance in the overall indexing formula. Key factors influencing the BSI included awareness both unaided and aided. In an effort to measure a brand’s mindshare for the consumer, the survey respondents were first asked open-ended questions to name five footwear, apparel or equipment brands in the sports or outdoor category. Respondents were then provided a list of 108 brands and asked about awareness levels for each brand. Respondents were then asked if they had purchased these brands and to answer questions about their experiences. The next factor used to formulate the BSI was a respondent’s likelihood to purchase a specific brand again in the future. For each brand that a respondent mentioned having purchased in the last year, the respondent was asked on a scale of 1 to 5 –with 1 representing “Definitely Would Not” and 5 representing “Definitely Would” –how likely he or she would be to purchase that brand again in the future. Brands earned points for positive responses while points were subtracted for negative responses. The attribute with the greatest importance in the BSI formula is a consumer’s uncompromising commitment to a brand. Respondents were first asked if they would leave a specific retailer if a particular brand were not carried by that retailer. The respondents answering “yes” were then asked (unaided) which brands were so important to them that they would leave a retail location if that brand were not available. The above criteria were then combined using The SportsOneSource Group’s proprietary

20 MAY 2014

formula to generate a single BSI for each qualifying brand. In 2014, the study’s methodological approach to gathering awareness and purchase was revised to accommodate

The Nike brand in 2014 once again ranks first in BSI ratings by a wide margin. With a score of 775, (out of 1,000), Nike is again nearly 100 points higher than the second highest scoring brand, Adidas. Nike’s dominant position continues to reflect overwhelming consumer brand awareness, both aided (95 percent) and unaided (85 percent). With nearly 100 percent awareness among active BRAND STRENGTH INDEX - OVERALL TOP 50 BRANDS* consumers, Nike’s reign is unlikely Brand Index Brand Index to waiver in the near future. Adidas’ BSI score of 687 REI 486 Nike 775 is 88 points lower than Oakley 486 Adidas 687 Nike. With aided awareness at Reebok/RBK 620 Danskin 481 89 percent, Adidas has some catching up to do to achieve Under Armour 607 Crocs 476 similar mindshare of the active New Balance 599 Lululemon 475 consumer. Puma 580 Russell Athletic 474 Reebok ranks third on the The North Face 567 Patagonia 471 BSI behind Nike and Adidas. Columbia 549 Saucony 468 Under Armour took the number four position and New Balance Converse 545 Birkenstock 467 rounded out the top five brands Asics 537 Keds 466 in 2014. Skechers 536 Billabong 463 Columbia moved up into Champion 535 K-Swiss 463 the Top 10 position in 2014, decreasing their gap with The Coleman 519 Roxy 461 North Face. Converse retained its Jordan 517 Fila 457 Top 10 position, and Asics moved Timberland 514 Clif Bar 456 up to join the Top 10 strongest Speedo 512 Sperry Top-Sider 455 brands among active consumers. Added to the list in 2014 are L.L. Bean 510 Timex 453 specific equipment brands that Vans 506 Burton 452 scored high in brand awareness Merrell 495 Quiksilver 451 recently as well as private label Dickies 493 Mizuno 451 retail brands that are included Carhartt 491 Powerbar 448 for the first time in this expanded report. Brooks 490 Smartwool 447 Notable additions to the Top 50 Ugg 488 Toms 446 on the BSI list in 2014 include at Ray-Ban 487 Keen 446 number 13 Coleman; L.L. Bean at Swiss Army 487 Garmin 444 number 17; Ray-Ban at number 24; and Swiss Army at number * Index out of 1,000 25. Dickies and Carhartt, two brands that are ubiquitous in the a broader brand list. As a result, brands workwear market, were measured for their appeal as active cannot be compared directly to their 2011 lifestyle brands. Both companies landed in the Top 25 with BSI scores, awareness or purchase data. Dickies coming in at number 20 and Carhartt at number 21. However, recurring brands can be compared In addition to Coleman, Ray-Ban and Swiss Army, other to past year Brand Strength Reports based non-softline brands to make the Top 50 include Oakley, Clif on their relative position to each other. Bar, Timex, Powerbar and Garmin.


Brand Awareness In the Brand Awareness section of the study, respondents were asked about their recognition of brand names on two levels - unaided and aided. First, respondents were asked an openended question to identify sports and outdoor brands, including footwear, apparel and equipment that came to mind to determine the unaided level of awareness. The respondents were later asked to select from a randomized list of 108 brands to determine their recognition of each brand. The tables below show total awareness, which combines both lines of questions.

Respondents that mentioned a specific brand in the unaided awareness section of the survey automatically selected those specific brands during the aided portion of the survey. Not surprisingly, Nike leads in overall Brand Awareness, followed by Adidas, Reebok, Puma and New Balance. The top five brands in overall awareness have not changed since 2011, though Puma and New Balance have switched positions. For female active consumers, New Balance shares the number five spot in Brand Awareness with Skechers, with both registering Brand Awareness at 79 percent. Based on a preliminary review of the Brand Awareness data, female consumers are far more aware of the brands in the active lifestyle market than men. The variance for an individual brand is four to 12 percentage points higher for females than for men for the Top 12 brands. For Crocs the Brand Awareness is 20 percentage points higher for females. Only four brands - Oakley, Russell, Coleman and Jordan - made the male Top 25 in Brand Awareness that were not included in the female Top 25 chart. BRAND AWARENESS - BY GENDER

BRAND AWARENESS - OVERALL TOP 50 BRANDS MOST RECOGNIZED BRAND NAMES Brand

Percentage

Brand

MALE Percentage

Brand

FEMALE

Percentage

Brand

Percentage

Nike

95%

Jordan

48%

Nike

93%

Nike

97%

Adidas

89%

Coleman

48%

Adidas

87%

Adidas

91%

Reebok/RBK

81%

Danskin

46%

Reebok/RBK

76%

Reebok/RBK

85%

Puma

78%

Timex

45%

Puma

74%

Puma

83%

New Balance

74%

Jansport

44%

New Balance

68%

Skechers

79%

Converse

71%

Russell Athletic

Under Armour

64%

New Balance

79%

Skechers

71%

Stride Rite

40%

Converse

64%

Converse

76%

Under Armour

67%

Garmin

38%

Skechers

61%

Under Armour

70%

Timberland

63%

Birkenstock

38%

Timberland

60%

L.L. Bean

69%

L.L. Bean

63%

Quiksilver

36%

L.L. Bean

57%

Champion

67%

Champion

62%

Toms

36%

Champion

56%

The North Face

67%

The North Face

62%

Carhartt

36%

The North Face

56%

Speedo

66%

Speedo

61%

Powerbar

36%

Speedo

54%

Crocs

66%

Crocs

57%

REI

35%

K-Swiss

54%

Timberland

66%

K-Swiss

56%

Airwalk

35%

Ray-Ban

53%

Keds

65%

Columbia

56%

Clif Bar

34%

Swiss Army

53%

Ugg

64%

Ray-Ban

56%

Ocean Pacific (OP)

34%

Dickies

52%

Danskin

Dickies

55%

Billabong

34%

Columbia

51%

Columbia

60%

Swiss Army

55%

Igloo

34%

Asics

49%

Vans

59%

Keds

54%

Avia

34%

Fila

48%

K-Swiss

58%

Asics

51%

Saucony

34%

Oakley

47%

Ray-Ban

58%

Vans

51%

Hurley

33%

Russell Athletic

47%

Dickies

58%

Fila

51%

Body Glove

31%

Coleman

47%

Swiss Army

57%

Ugg

51%

Wolverine

30%

Crocs

47%

Asics

54%

48%

DC Shoes

29%

Jordan

45%

Fila

54%

Oakley

41%

61%

Note: The Full Report, Core Report, Young Consumer Report, Outdoor BSR and Sportsman’s BSR, (all versions of the Brand Strength Report), provide Brand Awareness levels by specific demographic segments. For details contact Bethany Cooner, Director of Market Research, The SportsOneSource Group, 303.997.7302 or email BSR@SportsOneSource.com. SPORTSONESOURCE.COM

21


Brand Purchasing Nike dominates as the top purchased brand in the past year of all surveyed brands. Almost half of all active lifestyle consumer respondents purchased Nike in the past year, a full 24 points higher than second-highest brand, Adidas. Under Armour jumped from tenth position in 2011 to third in 2014. The North Face also rises landing in the Top 10 in 2014. Female active consumers rank Skechers in their top five brands purchased in the past year and 15 percent of females purchased The North Face in the past year. Only Nike and Under Armour share the same purchase percentage for both male and female respondents in the Top 10 purchased brands. Female respondents were twice as likely as males to have purchased Skechers in the past year. Other Top 25 brands that were more likely to be purchased by females in the past year include The

North Face, Vans and Converse. Toms, Keds, Roxy, REI and Ugg were rated in the Top 25 by females but not by males. Another key metric recorded in the 2014 Brand Strength Report was conversion rate, or the percentage of respondents that said they were aware of the brand and purchased the brand in the past year. Driving awareness through strong messaging using advertising and promotion is key, but converting those newly aware consumers into purchasers is the catch to long-term success. Under Armour continues to have an extremely high conversion rate as noted in the Brand Strength Report in 2011. Thirty-three percent of those aware of Under Armour purchased the brand in the past year. With awareness rising to levels that has put Under Armour in the Top 10 for the active consumer in 2014, coupled with a continuing strong conversion rate, the brand has exponentially increased its overall strength as forecasted in the 2011 Brand Strength Report.

BRAND PURCHASING - OVERALL TOP 50 BRANDS

BRAND PURCHASING - BY GENDER MALE

Brand

Percentage

Brand

Percentage

Brand

FEMALE

Percentage

Brand

Percentage

Nike

49%

Toms

5%

Nike

49%

Nike

49%

Adidas

25%

Crocs

5%

Adidas

28%

Adidas

22%

Under Armour

22%

REI

5%

Under Armour

22%

Under Armour

22%

New Balance

20%

Russell Athletic

5%

New Balance

20%

New Balance

19%

Skechers

14%

Oakley

4%

Reebok/RBK

16%

Skechers

18% 15%

Reebok/RBK

14%

Keds

4%

Puma

13%

The North Face

The North Face

13%

Swiss Army

4%

Champion

13%

Converse

14%

Champion

13%

Speedo

4%

Columbia

12%

Champion

13%

Converse

12%

Sperry Top-Sider

4%

Timberland

11%

Reebok/RBK

12%

11%

Columbia

11%

Puma

11% 11%

Puma

12%

Garmin

4%

The North Face

Columbia

12%

Roxy

4%

Converse

10%

Asics

9%

Saucony

4%

Skechers

9%

Danskin

L.L. Bean

9%

K-Swiss

4%

L.L. Bean

9%

Vans

10% 10%

Vans

9%

Timex

4%

Asics

9%

Asics

Timberland

8%

DC Shoes

4%

Jordan

9%

Ugg

9%

Clif Bar

8%

Hurley

4%

Clif Bar

8%

L.L. Bean

9%

Jordan

7%

Quiksilver

4%

Coleman

8%

Clif Bar

8%

Dickies

8%

Toms

7%

Powerbar

7%

Crocs

6%

Vans

7%

Jordan

6%

Carhartt

7%

Timberland

6%

Ray-Ban

7%

Keds

6%

Russell Athletic

7%

Roxy

5%

Danskin

6%

Jansport

4%

Coleman

6%

Merrell

4%

Ugg

6%

Lululemon

3%

Dickies

6%

Starter

3%

Carhartt

6%

Life is good

3%

Ray-Ban

6%

Igloo

3%

Fila

6%

Avia

3%

Fila

7%

Carhartt

5%

Powerbar

6%

Billabong

3%

Oakley

6%

REI

5%

22 MAY 2014


Inf luences On Footwear Purchases

»»

Brand Strength Report survey respondents were asked to rate a list of footwear purchase factors on a scale of 1-to-10 to identify how each factor influenced their footwear purchase. Some of the most influential factors from the survey are as follows: »» »»

»»

»»

»»

“Product Quality” rated as the most influential factor with an average of 8.9; driven by 92 percent of respondents rating it as at least somewhat important. This rating mirrors the active consumer’s mindset in 2011 because consumers prefer to pay more for a product of higher quality with the perceived benefit of both value and longer use. “Value for the Price” was again rated as the second most influential factor with an average rating of 8.5. “Past Experience with Brand” moves up to third most influential position, with an average rating of 8.1 and almost half of all active consumers citing it extremely important. This shows the importance consumer’s place on their own knowledge and commitment to specific brands and their preference to spend more money less frequently for higher quality products from trusted brands. Supporting this trend is that “Low Price” drops again in 2014 ranking sixth in importance to consumers with just 65 percent citing it somewhat important in 2014 compared to 68 percent in 2011 and 71 percent in 2010.

»»

“Innovation/Technology” surpassed “Low Price” in 2014. Active consumers want to take advantage of advancements in footwear and the perceived benefit of improved personal performance outweighs the cost savings. The 2014 study also shows an increase in the influence of “Environmental Initiatives” with nearly half of all active consumers rating it at least somewhat important and earning an average of 6.0. By comparison, in 2011 only 38 percent of active consumers rated “Environmental Initiatives” as at least somewhat important, earning an average of 5.5. In 2011, just 19 percent of active consumers rated “Athlete/Celebrity Sponsorship” as at least somewhat important earning an average of 3.6. In 2014, “Athlete/Celebrity Sponsorship” is rated at least somewhat important by 29 percent of active consumers earning an average of 4.3. As brands focus on fewer but more visible and credible endorsers to promote their products, will this factor of influence on footwear purchase continue to grow?

INFLUENCES  ON  FOOTWEAR  PURCHASES  -­‐  OVERALL  

INFLUENCES ON FOOTWEAR PURCHASES - OVERALL

Product  Quality  

Value  for  the  Price  

48%  

Style/Fashion/Fit  

47%  

InnovaBon/Technology  

34%  

Low  Price  

34%  

Brand  Name  

16%   0%  

10%  

Extremely  Important  

14%  

32%  

20%  

15%   30%  

Somewhat  Important  

12%  

26%  

40%   Neutral  

5%  

15%  

43%  

12%   50%  

5%  

8%  

8%  

23%  

32%  

13%  

8%  

22%  

31%  

24%  

6%  

22%  

33%  

23%  

Athlete/Celebrity  Sponsorship  

13%  

35%  

29%  

Environmental  IniBaBves  

9%  

31%  

58%  

Past  Experience  with  Brand  

6%  

22%  

70%  

60%  

Somewhat  Unimportant  

70%  

80%  

90%  

100%  

Not  At  All  Important  

SPORTSONESOURCE.COM

23


Footwear Ratings By Attribute For each brand of footwear that the Brand Strength Report survey respondents said they purchased in the past year, they were asked to rate each brand on six attributes on a scale of 1-to-10. Categories included: “Value for the Price”, “Product Quality”, “Style/Fashion/Fit”, “Past Experience with Brand”, “Innovative Technology” and “Environmental Initiatives”. To qualify for each of these ratings, the brands had to receive a minimum number of responses. The Footwear Ratings By Attribute – Product Quality graph shows the Top 10 rated brands for “Product Quality”. The Brand Strength Report Full Report and Core Report include the Top 20 brands for each attribute in addition to the Top 10 rated brands for “Product Quality”. Merrell, Jordan, The North Face, Timberland, Keen, Nike, and Under Armour, all return in 2014 in the Top 10 footwear brands rated by “Product Quality”. Birkenstock, L.L. Bean and Wolverine join the list for 2014. Merrell ranks highest in 2014 for “Product Quality” among footwear brands, with an average ranking of 9.5. A full 88 percent of active consumers who purchased Merrell footwear in the past year rated the brand’s footwear extremely positive for “Product Quality”.

FOOTWEAR  RATINGS  BY  ATTRIBUTE  -­‐  PRODUCT  QUALITY   FOOTWEAR RATINGS BY ATTRIBUTE - PRODUCT QUALITY Merrell   Birkenstock  

83%  

L.L.  Bean  

82%  

Jordan  

14%   17%  

72%  

Nike  

72%  

Under  Armour  

72%  

Wolverine  

73%   0%  

10%  

20%  

Extremely  PosiNve  

30%  

4%  

4%  

20%  

76%  

Keen  

5%  

27%  

71%  

Timberland  

24 MAY 2014

14%  

78%  

The  North  Face  

1%  

11%  

88%  

2%  

24%  

4%  

23%  

5%  

22%  

6%  

22%   40%  

Somewhat  PosiNve  

50%   Neutral  

60%   Somewhat  NegaNve  

70%  

80%  

Extremely  NegaNve  

90%  

100%  


Inf luences On Apparel Purchases Because purchase decisions vary when deciding on footwear, apparel or equipment, the questions about purchasing were asked separately for each category. For the 2014 Brand Strength Report, respondents were asked to rate the same list of factors using a scale of 1-to-10 on the influence of each factor when purchasing apparel. The responses for footwear and apparel are fairly similar, with “Product Quality” ranking as the most influential for both. While “Product Quality” continues to rank as the highest influence on active consumer’s apparel purchases in 2014, the overall mean score declined from 8.9 in 2011 to 8.7 in 2014. Sixty-six percent of active consumers rate the attribute extremely important compared to 70 percent in 2011. “Environmental Initiatives” shows an increase in apparel influence as it does in footwear compared to 2011. With 48 percent of active consumers rating it at least somewhat important. “Environmental Initiatives” earns an average ranking of 6.0 in 2014, compared to 5.5 in 2011. “Athlete/Celebrity Sponsorship” continues to rank last for influence on apparel purchases, but earns an average ranking of 4.4 in 2014, compared to 3.6 in 2011. Thirty-one percent of active consumers rate “Athlete/Celebrity Sponsorship” at least somewhat important in 2014, compared to 21 percent in 2011.

»»

»»

»»

INFLUENCES  ON  APPAREL  PURCHASES  -­‐  OVERALL   INFLUENCES ON APPAREL PURCHASES - OVERALL Product  Quality  

Value  for  the  Price  

Brand  Name  

Environmental  IniBaBves  

Athlete/Celebrity  Sponsorship   0%  

10%  

Extremely  Important  

15%  

14%  

17%   20%  

30%  

Somewhat  Important  

11%  

25%  

24%  

24%  

40%   Neutral  

6%  

16%  

43%  

11%   50%  

5%  

9%  

8%  

22%  

31%  

29%  

6%  

22%  

32%  

33%  

6%  

19%  

32%  

38%  

InnovaBon/Technology  

15%  

34%  

45%  

Low  Price  

13%  

32%  

50%  

Past  Experience  with  Brand  

9%  

30%  

59%  

Style/Fashion/Fit  

7%  

25%  

66%  

60%  

Somewhat  Unimportant  

70%  

80%  

90%  

100%  

Not  At  All  Important   SPORTSONESOURCE.COM

25


Apparel Ratings By Attribute Jordan, The North Face, Columbia, Timberland, and Under Armour return in 2014 as Top 10 apparel brands rated by “Product Quality”. Carhartt, Patagonia, Smartwool, Oakley, and L.L. Bean join the Top 10 apparel brands for 2014. Carhartt is the highest rated brand in 2014 with 80 percent of respondents rating the brand’s apparel extremely positive for “Product Quality”.

APPAREL   RATINGS  BY  ATTRIBUTE  -­‐  PRODUCT  QUALITY   APPAREL RATINGS BY ATTRIBUTE - PRODUCT QUALITY CarharL   Patagonia   Jordan  

3%  

28%  

67%  

6%  

30%  

63%  

The  North  Face  

11%  

84%  

Oakley  

Columbia  

10%  

20%  

Extremely  PosiPve  

30%  

0%  

44%  

56%   0%  

1%  

29%  

70%  

Under  Armour  

3%  

22%  

75%  

Timberland  

4%  

23%  

73%  

40%  

Somewhat  PosiPve  

50%   Neutral  

60%   Somewhat  NegaPve  

70%  

3%   7%  

24%  

67%  

L.L.  Bean  

26 MAY 2014

4%  

38%  

58%  

Smartwool  

4%  

16%  

80%  

80%  

Extremely  NegaPve  

90%  

100%  


Inf luences On Equipment Purchases New in 2014, the survey asked respondents to rank the same list of factors on a scale of 1-to-10 on the influence of each factor when purchasing equipment. Similar to footwear and apparel, “Product Quality” and “Value For The Price” are the highest ranking factors influencing purchase of equipment. “Innovation/Technology” ranks fourth on equipment purchase among active consumers, earning an average of 7.6, with over 4-in-10 rating it extremely important. “Past Experience With Brand” ranks third, highlighting the importance trust in a brand is on high dollar product.

INFLUENCES   ON  ON EQUIPMENT   PURCHASES   -­‐  OVERALL   INFLUENCES EQUIPMENT PURCHASES - OVERALL

Athlete/Celebrity  Sponsorship   0%  

10%  

Extremely  Important  

15%  

14%  

19%   20%  

30%  

Somewhat  Important  

40%   Neutral  

10%  

24%  

24%  

26%  

Environmental  IniBaBves  

7%  

16%  

43%  

10%   50%  

5%  

9%  

7%  

23%  

31%  

30%  

Brand  Name  

6%  

21%  

30%  

36%  

Style/Fashion/Fit  

5%  

19%  

31%  

39%  

Low  Price  

18%  

32%  

42%  

InnovaBon/Technology  

17%  

33%  

44%  

Past  Experience  with  Brand  

10%  

28%  

58%  

Value  for  the  Price  

9%  

23%  

65%  

Product  Quality  

60%  

Somewhat  Unimportant  

70%  

80%  

90%  

100%  

Not  At  All  Important   SPORTSONESOURCE.COM

27


Equipment Ratings By Attribute Timex is the highest rated brand for product quality in 2014, with 74 percent of respondents rating the brand’s equipment extremely positive for “Product Quality”. Adidas, Nike, Under Armour and The North Face join Timex as the top five equipment brands with over 70 percent of respondents ranking them extremely positive for “Product Quality” in 2014. Coleman, Ray-Ban, Garmin, L.L. Bean and Swiss Army round out the Top 10 in 2014.

EQUIPMENT   RATINGS   BY   TTRIBUTE   -­‐  PRODUCT   QUALITY   EQUIPMENT RATINGS BYAATTRIBUTE - PRODUCT QUALITY 21%  

74%  

Timex  

4%  

18%  

78%  

adidas  

3%  

22%  

Nike  

75%  

Under  Armour  

74%  

22%  

4%  

The  North  Face  

74%  

23%  

4%  

Coleman   Ray-­‐Ban  

10%  

20%  

Extremely  PosiNve  

30%  

10%  

21%  

69%   0%  

6%  

20%  

73%  

Swiss  Army  

5%  

27%  

68%  

L.L.  Bean  

28 MAY 2014

23%  

72%  

Garmin  

2%  

28%  

69%  

40%  

Somewhat  PosiNve  

50%   Neutral  

60%   Somewhat  NegaNve  

70%  

80%  

Extremely  NegaNve  

90%  

100%  


Non-Negotiable Brands For the final and most heavily weighted component of the BSI, respondents were first asked if there were specific brands, which would cause them to shop somewhere else, if those brands were unavailable. The respondents who answered ‘Yes’ were directed to a follow-up question asking which brands would prompt that response. Those brands were determined to be “non-negotiable brands” in the eyes of that consumer. If a consumer leaves a store because that store doesn’t carry the brand they want, the Brand Strength Report shows that as a leading indicator of brand value. Nike was the most non-negotiable brand with 20 percent of active consumers citing it. Adidas moves up from fourth position in 2011 to second position in 2014, supplanting New Balance and leap-frogging Reebok. Under Armour and Puma also rise substantially ranking in the Top 10 in 2014. Puma ranks in the top five non-negotiable brands among male active consumers, while Skechers ranks in the top five for female active consumers; however, Skechers has fallen from second position among females in 2011 (at the height of impact of the Shape-Ups product) to fifth in 2014.

NON-NEGOTIABLE BRANDS - OVERALL Percentage

Brand Nike

20%

Adidas

6%

New Balance

4%

Under Armour

3%

Skechers

2%

Reebok/RBK

2%

Puma

2%

Jordan

2%

The North Face

2%

Vans

2%

NON-NEGOTIABLE BRANDS - BY GENDER MALE Brand

FEMALE

Percentage

Nike

20%

Brand

Percentage

Nike

20%

Adidas

7%

Adidas

5%

New Balance

4%

Under Armour

4%

Puma

2%

New Balance

4%

Under Armour

2%

Skechers

4%

Reebok/RBK

2%

Reebok/RBK

2%

Jordan

2%

Vans

2%

Asics

1%

The North Face

2%

The North Face

1%

Jordan

2%

Timberland

1%

Converse

2%

SPORTSONESOURCE.COM

29


KEY DEMOGRAPHICS

Methodology

Gender

The Brand Strength Report, compiled and presented by The SportsOneSource Group consumer research team, was designed to gauge the strength of sporting goods brands in the overall U.S. market. Respondents were asked a variety of questions relating to brand perception and individual products pertaining to their sporting goods’ purchases in the twelve months preceding the study, which took place in March and April 2014. The 2014 Brand Strength Report focuses primarily on Footwear, Apparel and Equipment brands across various segments of the sporting goods market, including Outdoors and Sportsman’s categories. To qualify for the Brand Strength Report, each respondent must have purchased athletic footwear or apparel in the past year. A total of 4,201 responses were received, providing detailed information on awareness levels, purchasing trends and brand allegiance to more than 300 Athletic, Outdoor and Sportsman’s brands. The Brand Strength Report includes the responses from consumer’s age 13 and older, all of who were surveyed through a third-party Internet panel provider. The SportsOneSource Group made every effort to control the demographics to best represent the U.S. population; however, as is the case with all Internet-based surveys, the demographics and psychographics tend to skew toward older more affluent households. The results of the survey can be projected to the U.S. population with a margin of error of +/- 1.34 percent. ■

Employment Status

Male

50%

Full-time

52%

Female

50%

Part-time

11%

Mean Age

39.6

Self Employed

6%

Unemployed

Age

5%

Retired

13%

13-17

10%

Student

4%

18-34

37%

Homemaker

9%

35-54

33%

Prefer Not to Answer

1%

55 and Older

20%

Household Income Race

Less than $40K

21%

Non-Hispanic White

73%

$40 - $60K

19%

African-American

10%

$60 - $80K

19%

Hispanic

9%

$80 - $100K

14%

Asian

6%

$100 - $149K

17%

American Indian

1%

$150K+

7%

Other

1%

Prefer Not to Answer

4%

U.S. Region

Marital Status Married

64%

Northeast

21%

Single

25%

Midwest

24%

Separated/Divorced

8%

South

32%

Widowed/Widower

2%

West

23%

Prefer Not to Answer

1%

FORMULATING THE BRAND STRENGTH INDEX Survey respondents were asked a series of questions to determine the strength of each brand. The factors that were used to build the index are listed in order of importance: 1. 2. 3. 4.

Non-Negotiable Brands Likelihood To Repurchase (on a scale of 1-to-5 with 1 meaning would not and 5 meaning definitely would) Unaided Awareness Aided Awareness

To qualify for the BSI, a brand had to be purchased by a minimum number of respondents so that each answer did not over-represent the perceptions of the total population.

30 MAY 2014


“A brand for a company is like a reputation for a person. You earn reputation by tr ying to do hard things well.� - JEFF BEZOS

Brand

Strength

Report 2014

Pre-Order Your Copy Today!

Comprehensive Nationwide Survey Brand Strength Index Listing In-Depth Consumer Behavior Analysis Detailed Individual Brand Analysis Customizable Format

For inquiries or to customize your personal report, contact Bethany Cooner, Director Market Research, The SportsOneSource Group, 303.997.7302 or BSR@SportsOneSource.com. BrandStrengthReport.com

SPORTSONESOURCE.COM

31


TRADE ASSOCIATIONS | BUYING GROUPS

CALENDAR For full year calendar go to sportsonesource.com/events

Photo courtesy prAana

JUNE

SEPTEMBER

11-12

Altanta Shoe Market Atlanta, GA

3-8

NBS Fall Semi - Annual Market Fort Worth, Texas

17-19

Licensing International Expo Las Vegas, NV

4-6

Imprinted Sportswear Show (ISS) Orlando, FL

26-28

Sports, Inc. Summer Team Dealer Show Nashville, TN

10-12

Interbike International Trade Expo Las Vegas, NV

16-17

SFIA Industry Leaders Summit Chicago, IL

JULY 8-11

NBS Summer Market Austin, TX

OCTOBER

10-13

European Outdoor Trade Fair Friedrichshafen, Germany

7-9

15-17

ASI Chicago Chicago, IL

NOVEMBER

18-20

A.D.A. Spring Show Reno, Nevada

3-5

NBS Fall Athletic Market Ft. Worth, TX

15-16

A.D.A. Fall Show Palm Springs, California

23-25

Sports, Inc. Fall Team Dealer Show Las Vegas, NV

AUGUST 6-9

Outdoor Retailer Summer Market Salt Lake City, UT

14-16

Sports Inc. Outdoor Show Nashville, TN

24

Tennis Industry Association The Tennis Show New York, NY

32 MAY 2014

OIA Rendezvous Asheville, North Carolina

Athletic Dealers of America 1395 Highland Avenue Melbourne, FL 32935 t 321.254.0091 f 321.242.7419 athleticdealersofamerica.com National Shooting Sports Foundation Flintlock Ridge Office Center 11 Mile Hill Road Newtown, CT 06470 t 203.426.1320 f. 203.426.1087 nssf.org National Sporting Goods Association 1601 Feehanville Drive / Suite 300 Mount Prospect, IL 60056 t 847.296.6742 f 847.391.9827 nsga.org Nation’s Best Sports 4216 Hahn Blvd. Ft. Worth, TX 76117 t 817.788.0034 f 817.788.8542 nbs.com Outdoor Industry Association 4909 Pearl East Circle / Suite 300 Boulder, CO 80301 t 303.444.3353 f 303.444.3284 outdoorindustry.org Sports & Fitness Industry Association 8505 Fenton St., Suite 211 Silver Spring, MD 20910 t 301.495.6321 f 301.495.6322 sfia.org Snow Sports Industries America 8377-B Greensboro Drive McLean, VA 22102 t 703.556.9020 f 703.821.8276 snowsports.org Sports, Inc. 333 2nd Avenue North Lewistown, MT 59457 t 406.538.3496 f 406.538.2801 sportsinc.com Sports Specialists Ltd. 590 Fishers Station Drive / Suite 110 Victor, NY 14564 t 585.742.1010 f 585.742.2645 sportsspecialistsltd.com Team Athletic Goods 629 Cepi Drive Chesterfield, MO 63005 t 636.530.3710 f 636.530.3711 tag1.com Tennis Industry Association 1 Corpus Christi Place, Suite 117 Hilton Head Island, SC 29928 t. 843.686.3036 f. 843.686.3078 tennisIndustry.org Worldwide 8211 South 194th Kent, WA 98032 t 253.872.8746 f 253.872.7603 wdi-wdi.com


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