The Airwalk Syndrome…returning?
GEN X
In the early 90’s Generation X was anti-establishment, anti-parent, anti-authority, and anti-pop-rock. If the brand you liked seeped into the wardrobe of your parents it was instant death to the brand. The same phenomenon was somewhat true for bands. You wanted to be the only one with the recording of the hottest band. The parents of the Gen X’er were raised by parents who lived through world wars, the great depression, and hard times.
GEN Y
Then came Generation Y – the offspring of the baby boomers and a kindler, gentler parenting style. Suddenly, it wasn’t so wrong to wear what your parents wore. You even listened to some of the same music. With technology came exposure and appreciation for a more eclectic taste. This was fueled by economic prosperity as well. Everyone got a trophy and parents were all right. Jobs for Gen Y came easy and the Internet boom quickly expedited raises and promotions. Starkly opposed to Gen X’ers, Gen Y’s listed parents top on the list of best friends.
The stage is now set.
The Airwalk Syndrome will return. Airwalk was a brand on the rise that suddenly ended up in mass distribution channels making it available for your parents to own..and wear….at the same time the youth thought they were on to something special. Given the same scenario last year, Gen Y’ers may not have disapproved of the mass distribution and still backed the brand.
Dust off Malcolm Gladwell’s “The Tipping Point” and find out more about Airwalk.
Airwalk was a very hip skateboarding shoe company that started in the mid-80s and had consistent sales revenues in the low teens in millions. With a large ad budget promoting a mixture of skate and lifestyle shoes – within three years, sales grew by more than 10 times to $175 million.
This success led to an effort to expand the market, doing deals with major shoe retailers at lower price points to try to entice people with less money to believe the hype. By the end of the decade, Airwalk was filing voluntary bankruptcy with more than $100 million in debt.
Will the recent economic downturn disenfranchise young adults because they don’t get the new car from their folks, they don’t get the quick raise, or the fast promotion, the large allowance, the trust fund, the extravagant prom? Time will tell.
If teens and their parents both wear your brand and it is accepted, be weary. Given the economic situation, today’s youth will start relaying on themselves, become a little harder, more entrepreneurial, and distance themselves from their parents brands even further. Gen X wanted to shake things up and did. Out of this recession will come amazing things from today’s youth as they start heir own brands because they can’t land a job or get paid enough.
The new is coming. It’s time to evaluate your distribution and voice and be relevant.
forsenorse
Interesting piece Erik.
I’ve been watching their re-emergence for a while and whenever I see them re-issue a style from the 90’s, I get nostalgic for when my body thought it was ok to fall down stairs over and over again.
It’ll be interesting to see what happens with Airwalk in terms of what consumers purchase the product. I have to believe that with the influencers, they’re still going to be looking at not just price, but the team backing the brand and the places they see it.
You know the saying core is poor, but you don’t necessarily have to sell in every door to be successful. Smart, sustainable and controlled growth won’t necessarily please Wall Street, but it could stem big layoffs down the road.
Well put, over distribution has always been a brand killer. The list of brands which have fallen victim to the temptation of easy money from national retailers is a long one. So the question is this, if your business is in a position where you are unsuccessfully scrambling to make up lost revenue from “core” channels which ultimately may land you in the grave yard, what harm is there in finding sanctuary in the pockets of a national retailer? In other words, you’re damned if you do and you’re damned if you don’t. It seems the only option which allows the business to survive and maintain its integrity is downsizing operations to fit the new demand. However this approach has its problems too. Aside from the obvious being layoffs and restructuring, voluntarily decreasing market share and therefore revenue may ultimately lead to the demise of the brand. Is going vertical the only way to maintain core integrity, maintain/grow market share, and stem off over distribution?
Good question. I have to look at a brand like Patagonia with what I perceive to have controlled distribution, but managed to remain “core” and still grow. In talking to a “core” retailer recently they mentioned that the best brand at managing distribution and thus providing protection against eroding margins for the retailer and the wholesaler…just happens to be one of the largest brands…Nike, with Nike 6.0. The core market may be dwindling (SIMA research showed 156 shops closed from 2006-2008….wait until 2009 wraps up!) but a lot of brands can still find growth in the core and the “accepted” (hey, at least these aren’t the mass discount chains) national retailers like Macy’s, Zumeiz, the Buckle. What good is revenue growth for a private company if profitability drops.
Great thoughts Jeff. I honestly don’t have the answer. I know with my agency, we’ve had the option to expand in a number of ways, but held off because I didn’t think it was sustainable.
The result was, for a period of time, we put in a lot of extra time… but eventually things got back to a normal growth level and we were ok. But we’re a small PR firm (with big results
, not a global agency.
From a brand standpoint, it’s a lot harder, I’m sure. There are a few brands out there in skate I see following the slow/sustained growth model and starting sub brands at the same time to increase their presence. Of course, these guys are not near the revenue of some of the larger ones.
There’s also the downside of when a mass retailer cuts down their big buys from the action sports world.
Again, it’s a dicey path to head down and one not easily navigated. If I had all the answers, I’d start my own brand.