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HOW REEBOK CAN SELL ITS CLASSICS BRAND TO MORE CANADIANS

Reebok Classics Canada just made a big leap and joined the social media world. I figured that I would evaluate how they are doing in Canada, and where I think they can improve. Follow them on Instagram and Twitter at @reebokclassicca.

In the footwear and sportswear world, Canada is branded (fairly or unfairly) as the 51st state of the USA. This is a fair assessment for the most part, as consumers in Canada act very similarly to their American counterparts and are influenced by American marketing efforts (on TV, in sports, and in digital media). 90% of Canadians live within 100 miles of the USA/Canada border, and it isn’t uncommon for Canadians that live close to the border to cross to save money shopping.

As a whole, Canadians are subjected to a lot of the same marketing efforts either through American channels or with the same marketing material through Canadian channels. For sportswear brands, these striking similarities allow brands to do a good job of marketing to Canadians by simply copying American tactics and scaling down budgets. This is similar to the “shrink it and pink it” model that had “worked” until brands like Lululemon, and Under Armour addressed the fact that they could do a better job of serving women. Employing successful American tactics in Canada can work, but there is an opportunity to also capitalize on the differences between the Canadian and American markets. For Reebok Classics in Canada, those differences include the value of the Reebok brand in Canada and the importance of the NHL and the CFL to Canadians.

It’s no surprise that the Reebok brand has struggled since the late 2000’s but the brand that has had issues capturing American consumers since they were bought by adidas has done a great job of penetrating Canadian sports. The Reebok-CCM brand is one of the major players in the hockey equipment market (not to mention it is the NHL’s jersey supplier) and has the world’s top athletes representing the brand. From Sidney Crosby to Connor McDavid, the Reebok brand is all too well known to Canadian hockey fans, and if you can capture the minds of Canadian hockey fans then as a brand, you have appealed to the largest segment of sports fans in Canada. It’s also worth mentioning that the second largest league in Canada (by TV viewership), the CFL also has their jerseys supplied by Reebok.

When adidas purchased Reebok in 2006, they owned the NBA and NFL jersey contracts in addition to the CFL and NHL rights. Now, almost ten years later the brand’s annual revenue has dropped from 1.979 billion euros in 2006 to 1.578 billion euros in 2014. Reebok has had issues around the world and specifically in the USA, but one area its brand is still considered very premium is north of the 49th parallel. Reebok Canada has an opportunity to grow that brand, and one of the areas it can greatly improve on is with its Reebok Classics brand.

Tell the Brand Story Better – I was born in 1991. I lived through Reebok’s heyday, and yet the only story of the brand I remember was that they signed Allen Iverson. The brand that became Reebok was founded in 1895, but there never seems to be any mention of the brand’s history in their marketing. The Reebok Classics brand has to rely on footwear news outlets to communicate the importance of various silhouettes to their consumers.

Nike has done a phenomenal job of showcasing the history of its athletes and shoes through Michael Jordan, Steve Prefontaine, and even Bo Jackson. If Reebok wants to grow its Classics brand in Canada it needs to explain the significance of its products to consumers. The consumer needs to learn about Jackie Chan rocking the Instapump Fury, or that the Ventilator changed the game by installing airflow in sneakers. The Reebok Classics brand has been pushing out new collaborations, colourways, and iterations of their shoes and the products that have been released are phenomenal.

Unfortunately, the consumer doesn’t have the same connection with these shoes as they do with other brands. Consumers don’t know the story behind these sneakers, so there isn’t the same attachment and nostalgia. Nike has this in spades with its Jordan brand, and adidas’ long history with RUN DMC and Stan Smith are stories that resonate with consumers. Reebok needs to connect its story with its consumers. They can do this through social media, traditional media, digital media, and retail activations. By conveying the stories that make up the Reebok Classics brand, Reebok can create a connection with the past that brings back nostalgia for some and educates others. This opportunity to better tell the Reebok Classics story isn’t just an opportunity for Canada, but the Canadian team can own this opportunity globally.

Get to the People – Brands are realizing that sometimes they need to reach their consumers directly and provide them with an opportunity to celebrate a brand before they will spend their money. Take Livestock’s special engagement with Nike, Foot Locker’s House of Hoops – 5 Days of Drops, or the Wings and Horns x New Balance launch party as examples of great direct to consumer activations. These activations let consumers interact with like-minded individuals in a surreal shopping environment. Not every release or opportunity warrants these activations, but if executed properly these opportunities build a brand’s image in the larger sneaker and fashion community.

Even outside of the dedicated sneaker community, people want to learn and engage with brands that they appreciate. There are so many opportunities across Canada that Reebok Classics can activate around. Whether it’s educating consumers in a special activation at the Bata Shoe Museum in Toronto, working with Metrotown’s amazing and new Sportchek in Burnaby to create a retail activation that showcases the “Be Ventilated” video with Kendrick Lamar, or launching a collaboration with Urban Outfitters that teaches young photographers how properly photograph sneakers the opportunities are endless. How the Classics brand chooses to connect with consumers is important, and the sales that come with that connection are what will keep the lights on, but if the brand chooses to try to grow across this large land mass without creating personal connections with consumers they will have a very difficult time attracting brand loyalists.

Utilize Reebok’s Assets for the Classics Brand – Reebok is “the original fitness brand” and has an incredible stable of Canadian athletes that it sponsors with its fitness, football, and hockey products. Athletes like Sidney Crosby and Connor McDavid represent the brand regularly at events and on social media. Cross promoting Reebok Classics products through Reebok athletes is a way that Reebok Classics can tell its story to consumers that may not be subjected to other marketing. By seeding Reebok athletes with Reebok Classics products and the necessary tools for them to effectively connect with the brand on social media Reebok Classics will be able to grow their social media following and brand awareness in Canada.

There are also some other cross-promotional pieces the Classics brand can take part in. Using the adidas Basketball Superstar collection as an example, the Classics brand could work with the NHL and CFL to create products that take inspiration from iconic teams. For instance, creating an Instapump Fury for each NHL team that uses the colours and logos of teams could drive sales and excitement around the Classics brand. Brands like Mitchell & Ness have been having recent success applying the logos and colours of NHL teams on non-traditional items like basketball jerseys. These products would appeal to the fans of NHL teams in addition to the traditional market that Reebok Classics captures.

Reebok has an opportunity to leverage their fitness and sport assets to promote the Classics brand across Canada. Classics has a story to tell and the opportunity to leverage these assets effectively began with creating the country specific Instagram and Twitter handles. Things are looking very promising for the brand that first put ventilation in sneakers.

Do you think Reebok Classics can grow in Canada? Do you think the ideas I’ve suggested could help them achieve a substantial growth in sales? Let me know what you think on Twitter.

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The Importance of America in the Sportswear Industry: Part 6 (Conclusion)

If you take two things away from my blog on America’s influence on the Sportswear industry I hope they are these. Americans buy 40% of all the Sportswear in the world, and there are more people in the USA working for sportswear manufacturers (not including the factory staff that are not technically employed by the manufacturers) than any other country in the world. Those are truly confounding numbers when you think about how big of an impact that has on the global market. Brands have realized America is the metaphorical golden ticket in the industry, so expect the competition to continue for every dollar of discretionary income that Americans are putting into their clothing. The “athleisure” market is booming, copycats and counterfeiters are getting exposed, and the top brands are moving key people into key places to ensure they can execute to American consumers preferences. It will be a long time before any other country is able to claim that it is the home of the sportswear industry

That said, China has gone from the world’s shoe maker to the second biggest shoe buyer seemingly overnight. Like the people at adidas have said for years “impossible is nothing”.

 

(Image courtesy of High Snobiety)

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The Importance of America in the Sportswear Industry: Part 5 (How Brands are Competing)

It almost goes without saying that the real winner in the USA is Nike. They always seem to focus on their homeland first and foremost and as a result see a huge amount of success. Their recently reported sales numbers (up 15% compared to last year, and up 16% this quarter in North America) are staggering examples of their success.

German giant adidas has recently put a bigger emphasis on growing the business stateside. By moving the brand’s Creative Director Paul Gaudio to the USA , and by poaching Mark Miner, Denis Dekovic, and Marc Dolce to start a new Brooklyn based design studio it is clear that the trefoil has decided to try to carve back some of the market share it has lost in the USA in recent years. It is also worth noting that new head of adidas America Mark King has put an emphasis on “American Sports”. He sees adidas as being a more successful brand stateside if they can appeal to the sports that the Americans view as their pastimes.  The brand will likely have to wait about another 13 or so months before any of these changes come into effect with how the cycles work in the industry (and likely longer before the three new designers are able to influence product), but the plan is in place.

Puma’s recent signing of Rihanna is sure to breathe some much need life into the brand, but it is hardly more than a quick-fix. They will need to really shake things up if they want to compete at a higher level. That said, the global Puma Labs they have in place at Foot Lockers around the world have definitely helped the brand return to prominence.

Skechers is the true underdog story that no one was really expecting. Their numbers (50% gain in brand share in April 2014, and best first quarter net sales ever) are shocking to say the least. They have seen incredible growth, and as they are able to afford more resources it will be interesting to see what they are able to do in the USA and around the world in 2015.

Under Armour is using a similar strategy to Mark King’s idea of trying to win in American sports. They have been growing in areas like basketball, and the recent battle they lost with Nike over Kevin Durant was their memo to the sports world that they aren’t just the new kid on the block anymore. Expect to see growth behind Steph Curry in basketball, and their sponsorship of university football teams in the USA. They are in need however of a veritable superstar(s) to back their campaigns if they are going to seriously challenge Nike in any of the “American sports”. They are on the right track however recently passing adidas to cruise into second for sales in the USA.

 Click here to read the next part!

(Image courtesy of High Snobiety)

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The Importance of America in the Sportswear Industry: Part 4 (Brand Value and the Shifting Workforce)

  • The industry’s heavyweights have grown their workforces Stateside, and there are more employees in the USA than Europe.
  • The major sports brands (according to Forbes) are located in the USA
    • 24 Of the 40 most valuable sports brands are American. This group includes: events, teams, athletes, broadcasters, and sportswear companies
    • The Forbes report doles out 58 billion dollars in brand value throughout the list. The American brands represent about 78% of that value with 46 billion dollars in brand value
      • It’s worth noting that Nike’s brand value is the highest at an estimated 19 billion dollars or about 38 times the value of the Superbowl
    • The USA makes up about 40% of the world’s sportswear market according to renowned market research professional Matt Powell.

Below is a look at the data I used from the Forbes article here.

brand value

Pivot Table

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(Image courtesy of High Snobiety)

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The Importance of America in the Sportswear Industry: Part 3 (Hip-Hop’s Influence)

A history lesson from the good people at Sole Collector and D.M.C.:

 “So, they put (Angelo Anastasio) up on it, so he went to adidas and said, “You know, listen, I know what’s going on. There’s this rap group Run-D.M.C. that made this, so adidas assigned him to leave L.A. to fly to New York to go to the show that Run-D.M.C. was doing in Madison Square Garden. He came … and he was hanging backstage. … But, when Run went out there during the show, “D, take it off your feet; hold it up. What’s those? Everybody in here, if you got adidas on, hold ‘em up.” So, 40,000 people in a sold-out Madison Square Garden held a sneaker up and Anastasio was like, “Oh my god, it’s true.””

This sparked the birth of the first partnership between rap and sportswear. Since then, it seems like every rapper has had some sort of influence on a major footwear producer. From Nike’s work with Drake and Macklemore, to Reebok collaborating with the likes of Jay-Z, Kendrick Lamar, and Rick Ross, and adidas’ Jon Wexler signing half of the rap industry with the three stripes it seems that rap has planted its flag of influence in the sneaker industry. There’s no debate that the influence of rap is worldwide, but its influence I believe is definitely strongest in the country it was born in.

The reasoning behind all these relationships is simple. Athletes sell shoes, but so do artists. The target market for a lot of silhouettes are identical with specific artist’s fans. The effect that an artist like Kanye West can have on the popularity of a piece is dumbfounding. For example, Kanye West attached his name to a plain white $120 T-shirt with French company A.P.C., and it “sold out instantly”. With millions of followers across the globe using mediums like Instagram’s Team Kanye Daily, WhereToGet, and a variety of blogs and magazines that showcase his outfit choices it’s no surprise that people want to dress like him. He isn’t the only artist with a cult-like following when it comes to fashion, so it is definitely worth mentioning that Puma’s move of bringing on Rihanna as Creative Director (much like Reebok did with Swiss Beatz in 2011) is a huge move for the women’s side of the brand. She is not a rapper, but it seems almost necessary to comment that Puma’s influence in the women’s market should see major growth thanks to her endorsement. 14.4 million Instagram followers will be subjected to her fashion choices, and Puma will likely see a nice bump in revenue thanks to her.

The adidas Run-D.M.C. partnership topped the list of the “best partnerships between rappers and sneaker companies”, and as the initial partnership it definitely has owned that spot. The now almost 30 year partnership has produced countless exclusive pairs and even has its own massive display pair at the adidas campus in Portland.

 

After adidas and the three Hollis-based artists teamed up there wasn’t very much collaboration between artists and shoe companies. The next big partnerships to form were Jay-Z and 50 Cent, who in 2003 partnered with Reebok. As 50 Cent said, he made “80 million (dollars) off the deal” and outsold Jay-Z’s more limited model by a 6:1 margin. The shoes may not have held their popularity as well as the Eminem Jordan 4 models that came out in 2004, but they are hard to compare since only 50 pairs were released by the Beaverton based behemoth. At this point, rappers were able to command incredible sums of money to co-sign a product based on their influence over customers. 2003-2005 was when rap planted its flag as a serious influencer in sportswear, and its reach has only grown since then.

Fast forward to a young multi-talented man from Chicago that in 2005 began his ascent to the top of the sportswear mountain. Kanye West’s work on a Nike model was his first foray into footwear, but his first pair that went past the sample stage was with the Japanese brand Bape. His work is well documented here, and there is no shortage of his influence. He even had his famous “dropout bear” on the heel of the Reebok S. Carter. In fact, the brands he’s worked with directly are Bape, Nike, and now adidas.

Since the Dassler feud brought on the battle to sponsor the best athletes in the world the sportswear industry hasn’t been afraid to push products using athletes as endorsers. As we saw beginning in the late 80’s this trend had begun to encompass more of popular culture. Just as athletes are seen as knowledgeable about what model might be best for their sport, celebrities became viewed as guides for how to look good. Rap has played a key influence in the sneaker industry based on a few things:

  • Culture of product placement – The prevalence of showcasing brands in songs, videos, etc. is growing by the day.
  • Prominence of brand shout outs and mentions in media – Social media, magazines, and blogs focus on who is wearing what, and what brands are showcased at various events. This has escalated with the explosion of the culture in the digital space.
  • Opportunities for collaborations – Based on the history between hip-hop and sneakers there is a long history of artist collaborators that have worked with brands.
  • Connection between basketball culture and rap – There is no debate that basketball and rap go together like Drake and the Raptors, but what is interesting is how sneakers all fit in here as well. There is clearly a happy marriage between these three cultural pillars, and the great brands leverage their influence in all three areas.

America is not only the birthplace of rap (and hip-hop), but it is very clearly the home of the genre. The relationship between rap and sneakers is possibly the largest relationship between music and a commodity outside of musical instruments and the music they create. As rap continues to flourish and develop subgenres the opportunities for collaboration between the two interlinked sub-cultures is massive. As long as hip-hop celebrities continue to be regarded for their fashion choices it’s a “no brainer” that their involvement will evolve from the successful product seeding initiatives and further we will see more artists listed as collaborators on projects.

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(Image courtesy of High Snobiety)

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The Importance of America in the Sportswear Industry: Part 2 (TV Viewership and Marketability)

TV Viewership and Marketability

Before I get started, I think it is important to recognize the FIFA World Cup, The Cricket World Cup, and the Summer Olympics are the world’s most watched sporting events. It isn’t a surprise that the FIFA World Cup tops out the list for viewership and although the total numbers globally are incredibly difficult to estimate, (a great example is that almost 35 million Germans (AKA 86% of the population) watched Germany win in 2014. When India and Pakistan faced off for the Cricket World cup there were an estimated 1 billion people that tuned in). The Olympics viewership can vary greatly depending on season, time zones, and location. These three events are clearly the most watched events in the world, however because their location changes every time the event takes place, and they only occur every 4 years the ratings can be a bit skewed based on those factors. When looking at major watchable sports I excluded the above three for the following reasons:

  • Infrequency of the event
  • Large geographical changes at each occurrence
  • Large time zone changes at each occurrence

There is definitely an argument for the Champion’s League final which is considered the world’s most watched annual sporting event (165 million viewers in 2014). It spans all over the globe (albeit concentrated in Europe) and is bit of a headache for marketers since you have to be a huge global brand to get your money’s worth. As far as global eyeballs in front of TV’s it wins that award annually. That said, viewership by country is tied to whether that country is represented in the final, and generally doesn’t come close to the Superbowl. The best argument for the Champions League Final is that it represents the taste of European viewers rather than specific countries with the teams that compete to play in the final.

In the USA, there is a lot of money involved in televised sports. The home to the big 4 major leagues frequently sees huge deals for television rights for sporting events. The NBA and NFL both have contracts for around 25 billion while the MLB and NHL have smaller deals at 12 and 2 billion in the USA respectively. The comparable stats though come down to TV viewership. Below is a breakdown of the big 4 leagues viewership in the USA for their championship game in 2014.

TV

With all of that in mind, why do I conclude that the USA is the “home of major watchable sports”? I base my opinion on a few factors.

  • Frequency of major events
  • Total viewership among all major leagues
  • Viewership over one country

When it comes to watching sports there is no country that does it better than the Americans. They are consistently able to draw huge numbers of viewers for annual events. These viewers are then subjected to large scale targeted advertising by a variety of brands including major sportswear companies. The ability for these brands to reach the American market through televised sport is perfected in America and is exemplified by the $133,333 a second it costs to advertise at the Superbowl. People in the USA are watching a lot of sports, and if you guessed there are a lot of people buying sportswear as a result of that marketing then the numbers infallibly support you.

It’s also worth noting that these leagues are also not finished expanding their influence globally. The NFL, NHL, and NBA all have extended their audience globally with games abroad. The Toronto Maple Leafs (the NHL’s most valuable team) are actually able to reach more viewers in China than in Canada according to Vice.

 Click here to read the next part!

*Sources for Total USA Viewers:

NFL, MLB, NBA, and NHL

(Image courtesy of High Snobiety)

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The Importance of America in the Sportswear Industry: Part 1 (Introduction)

When adidas was founded in 1924 as “Gebrüder Dassler Schuhfabrik” they weren’t concerned with what was going on across the Atlantic. In fact, it wasn’t until the late sixties when Nike was still known as Blue Ribbon Sports that adidas took the then 200 million people inhabiting the USA a bit more seriously. adidas was far more focused on Europe which had a population of around 650 million people in 1970. Europe was adidas’ backyard, and they were competing with Puma for dominance. The battle had and would almost bankrupt both companies as they tried to build their respective brands. They would however have to start worrying about a new battleground in the 70’s. The battle between the top brands for market share was about to finally go global, and it was then that the race to capture the USA began.

In 1971, Blue Ribbon Sports ditched the Onitsuka Tiger (AKA Asics) in favour of their own swoosh and incorporated as Nike Inc. That was when things started to heat up in the USA, and the development of the sportswear industry’s new home in the USA really began. Just as the Dassler brothers had created athlete marketing, Phil Knight and W+K were about to pioneer aspirational marketing.

I would note that Reebok entered the USA later when entrepreneur Joe Foster obtained the rights to the British athletic company in 1979. They became the major competition for Nike in the United States, and would play a vital role as the industry developed.

The retail sporting goods industry is predicted to reach 266 billion dollars by 2017, and as of right now the American marketplace makes up 40% of that market. That 40% makes the USA the highest spending nation in the global sportswear marketplace. There are a few reasons outside of money spent why in the last 40 years the “land of the free” has cemented itself as the home of the sportswear industry. The next 4 parts that will be discussed are below:

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(Image courtesy of High Snobiety)