A Stagnant Industry: Footwear Primed for Innovation

A Stagnant Industry: Footwear Primed for Innovation

For several years now, it seems as if the footwear industry has been playing follow-the-leader, closely mimicking every move of Nike. Seemingly uninspired, every brand from Adidas to Zamberlan lack a truly unique point of view. However, this is not a result from a lack of effort, in fact many brands are hungry to innovate and grow. There are entire departments dedicated to the pursuit of new ideas.

Part of the problem is the limited lifecycle of most of these brands. Many having reached maturity and acquired to become part of a Corporation’s portfolio.

Another issue is that brands are being utilized as an investment strategy and are managed from a financial point of view, therefore incentivized not to take risk. These larger entities diversify their portfolios and any deviation from the course of an individual brand poses a risk in this system. By nature, they are averse to change; Thus brands keep sailing on the same heading.

Furthermore, a majority of these brands are being run by managers, presidents, VP’s, and CEO’s – not the founders.  By removing the founder, the unique passion and brand DNA is removed.  The brand becomes a ship without a captain.

Having to address changes in the market, brand owners want to be continuously inspired, yet they find that there is a lack of true innovation, ingenuity, and novelty. They use innovation as a marketing tool to produce incremental technological features that have minimal or reverse impact on performance, such as the midsole technology race in the 80’s.

Today, all footwear meets a baseline standard. Performance development with new technologies is more of an evolution, not revolution. Nike has recognized this and hardly draws attention to the performance features of their shoes.

Instead, Nike has realized that they are competing for how consumers are going to spend $100. It can be the difference between buying a pair of shoes or an iPhone. They are competing with how the consumer perceives the value of a shoe.

In response to these market pressures, Nike now focuses solely on upper design and development. They push the boundary of materials, color, and manufacturing process of uppers. Out of a need for more automation they pioneered Flyknit and welded uppers in an attempt to reduce labor cost. Nike spends millions of dollars on R&D and will continue to be at the center of footwear technology.

Competing with The Kitchen (what Nike calls its R&D center) is a monumental task, so in this regard most brands benefit from being fast followers since they don’t have the resources to pioneer a new footwear technology. What else can one do to stand out and gain market share?

Concept 21 offers fresh perspectives to major players: Two success stories

An area that Concept 21 has found great success in is helping brands find their unique brand DNA and passion. Even in a crowded market like sandals, for example, it is possible to have your own voice and carve out a successful niche in the market.

#1  Reef develops its unique voice and diversifies

When working with Reef, Concept 21 reinforced their ethos of comfort, soft fabrics and minimalist design. Everything from the design and style of the sandal straps to the brand messaging reflects a succinct point of view.

Once a point of view is established, growth is achieved by implementing this ethos into different segments. This was the case when Concept 21 helped Reef break into lifestyle shoes, introducing an additional $8 million in annual revenue at the time and eventually obtaining annual sales of $75 million in 5 years.

Finding or even revisiting a brand’s unique point of view is essential. Spending time developing a brand’s DNA allows it to stand out from the rest. This is challenging, but essential. Here’s how we do it.

#2  Brooks Running gets back to its ‘cultural roots’ and flourishes

For established brands, refocusing on their original and unique attributes can help put them back in the spotlight. Getting back to their roots is exactly what Concept 21 did with Brooks when they refocused on their technical running heritage.

In this example, it began with the company culture. Originally built by runners for runners, the corporate culture at Brooks had shifted away from the employee’s connection with the sport. To solve this, incentives for employees were created around running and reinvigorated a running culture within the company. This brought about a more intuitive understanding of their core products.

This new found culture was communicated with vendors, retailers, consumers and the industry at large. This internal culture shift and refocus on technical running placed the company at the top in this category and increased its annual revenue to $300 million after the business transformation in 1993.

Whether big or small, we encourage our partners to think differently. The value brands stand to gain by having a unique point of view is immeasurable. It takes out-of-the-box thinking, and often a fresh perspective, to uncover great ideas worth celebrating.

Given the current stagnant nature of the industry, we see tremendous opportunities for brands to revamp their values and strategies and create ideas that consumers love. We feel that there is tremendous opportunity for cross pollination of ideas into new products and look forward to being apart of this new movement.