Drop It Like It's Hot - Or What The Sneaker Hustle Could Teach Watch Town

As a Man of Oregon, I am fairly certain that agents of Uncle Phil (Phil Knight, and a lot of us who attended the U and benefitted from the donations made by Mr. Knight and his wife Penny always refer to them as Uncle Phil and Aunt Penny), probably put something in the water in Eugene that mysteriously altered my DNA to desire more pairs of Nikes than I will ever be able to wear. 

To this day, at the tender age of 52, I check the Nike Sneaker app more frequently than the international news... and I check the international news an awful lot.

One of the really cool things about the business of sneaker launches is the concept of the "drop".  The drop is not unlike a watch release, but in truth it is far more democratic, and tends to garner a LOT MORE interest and enthusiasm. The word spreads through several different mediums - Instagram, Facebook (less and less these days) not to mention the big dogs - High Snobiety, Sneaker News and Nice Kicks among others. But beneath these obvious layers where I suspect a LOT of dollars flow from Beaverton (Nike), Portland (Adidas), Boston (Puma and Reebok) to keep relationships nice, there is the sub culture. And the denizens of the sneaker subculture are more and more becoming the drivers of FOMO - Fear Of Missing Out.

Now the word influencer and ambassador gets, if I am honest, misappropriated and is greatly misunderstood. There is a misplaced belief in Watch Town that a poorly worded article bordering on what Google Translate would spit out that flashes for 5 minutes in the top section of Outlet X (which boasts a readership larger than that of most fashion blogs, excuse me while I die laughing, but I guess it's true if you count all of the click farms) that the brand paid anywhere from $500 - $1,000 for will reach more people than one thoughtful, sincere article written by a "true believer" as opposed to a gun for hire. 

Editors note - yes, as an English teacher I am very aware the preceding was a run-on sentence to end all run-on sentences.  

And this is where the sneaker world takes a different view. 

Now in Watch Town, these folks are often (and  rather uncharitably) referred to as "Fan Boys". But as I mentioned, the world of sneakers takes a different approach.  Rather than spurn these people, there are cadres of folks in Beaverton, Portland, Boston and elsewhere who have ONE brief in their job description - FIND EVANGELISTS! And really, that seems to be something that Watch Town could truly benefit from.

Trying to "court" those of us in the Fourth and Fifth Estate using the current approach of paying Outlet X, Y and Z to run your release, then sending the same release 72 hours later to everyone else is a losing proposition. Because not unlike the working men and women plying their trade down at the Port Authority, $20 dollars is the hourly rate (not including the cost of a hotel room should you want some privacy), and it in no way, shape or form means that you have an actual relationship. One recent example I can think of is Brand A who sent out a press release written by outlet X along with "sweeteners" to the other large sites and got huge coverage for their announcement.  Curious to relate?  They sent another release through the tubes about a month or so later and got... bupkis   I guess true love is only true if the check clears.

Now I've heard (in not so gentle tones, sometimes offered with a veiled threat) from some of the Pay-to-Date writers that I am naive. Well, maybe, but even if I was born yesterday, I stayed up all night and I am fairly confident that the actual payoff gained from the payola formula is not nearly what those plying the pay-to-play journalism model would have the brands believe. 

Shamelessly borrowed from the world-wide infoweb

But let's get back to the evangelist model.

Let's be real for a few minutes - Rolex, Patek and Cartier do not need ambassadors. They are known pretty much at every level.

But when we look at other very worthy brands that can't seem to gain sustained traction, despite tens of thousands of dollars wired to the bank accounts of Outlets X, Y and Z and no small number of product placements with the athlete, actor, singer, "influencer" du jour?  These are the brands that should actually start reaching out and identifying their ambassadors. It's a lot less expensive, and it guarantees honest, sincere promotion from a true fan, a true believer.  More and more, I actually really like the idea of brand ambassador or brand evangelist. And truthfully, I don't think there is anything wrong with that person getting the odd freebie, getting invited on the next factory tour, or being recognized by the brand as a REAL friend of the brand.  

Watch Town has now really become more and more a locale for transients. People drift in and out depending on whether or not silver has crossed their palms. And what used to unify Watch Town, the annual shows and fairs? They are changing and losing their importance to retailers and (if I am honest) to journalists. Watch releases are now dropping all year long - not unlike sneakers. So the question becomes, how do you stimulate the same level of enthusiasm for the latest Omega James Bond model (I mean, honestly?  How many of these things can they shit out?) as the next pair of Air Jordans? I have yet to see people lined up in sleeping bags and lawn chairs to even get the latest SWATCH release, although maybe the Keith Haring / Disney mash-up will start a new trend. 

No, I don't expect to see corporate lawyers, neurosurgeons and investment bankers lining up in front of Tourneau or Watches of Switzerland for the latest drop, but I also don't see nearly the level of enthusiasm that there used to be when Simon Cudd spread the word about the latest release that was coming.

Like I said - I may have been born yesterday, but I stayed up all night.

The Adidas Illness

As has been disclosed here more than a few times, I work from time to time with brands on marketing, sales and pr/media projects as an independent freelancer.   I am currently ensconced in a few very intriguing projects, and in the midst of doing some analysis this weekend I was reminded of some very interesting passages I read in Barbara Smit's Sneaker Wars.

Shamelessly borrowed from the INFOWEB

The brief outline , Sneaker Wars is about the birth of Adidas, and subsequently Puma and the complicated and sad rise and fall of the Dassler family.  And yes, that is very interesting reading.  But what plucked my attention was the parallel story of the rise of Nike and Reebok in the 80s, and the refusal of Adidas to recognize what was happening and adapt.  This was particularly borne out in anecdotes about the "Waffle" trainer from Nike, and the "Freestyle" from Reebok.  In both cases it was a vivid example of an almost criminal lack of imagination.  Clearly, nobody (except maybe Nike) had an inkling as to how big the recreational jogging market would be.  And although the Freestyle was admittedly a happy accident due to a mix-up at the factory, it became one of the hottest selling shoes in the US due to the aerobics and fitness boom of the 80s and 90s.

And of course you probably know where I am going with this.  The fundamental issue that the watch industry is struggling against is change.  Change in distribution models, change in marketing approaches, change in purchasing patterns, change in expectations.  But here's the funny thing - there are clearly still people buying watches.  But the days of the brands, brand CEOs, brand marketing chiefs, brand PR folks telling people what they should and will buy are now over.  And what is intriguing is that some brands (both solid and dubious) have recognized and harnessed the importance of communication.  Not merely with their distributors and retail partners, but with the actual people who will make the actual purchase.  And they clearly understand that communication is a group activity that is best utilized when the ears are open from time to time.  When you have a focus group of one, it is highly unlikely that you will have an accurate sample, and it's safe to say that the projections will never match the actuals.

Had Nike only focused on what retailers or prevailing logic and sales histories would have told them, they never would have made the Waffle, and likewise Reebok would never have made the Freestyle.  Sooner or later, you have to adapt.

Ironically, a lot of the difficulties the industry faces are not necessarily about product - although that is a familiar and popular excuse.  The North American Sales Manager will insist up and down the if she/he had better product then all would be well.  Sorry, I'm calling bullshit on that one.

The current crisis was not brought on by poor product offerings.  If Hublot is able to still dog-paddle in the rising tsunami of problems, then clearly the product is not necessarily what is holding brands back.  It is back to some very simple points:

1.  Supply and demand - if you flood the market with too much supply, the demand may still be there, but not at the prices you would like to collect.  Discounting, dumping, grey market all ensue.

2.  Performance based employment and pay - sounds harsh, I realize.  But if you are paid a six-figure salary to sell, those six-figures should not be guaranteed.  There has to be a REAL performance component.  But that performance must be REALISTIC.  Meaning that if the expectation for the sales manager is to sell 1,000 pieces in a market that can only support 300 pieces, that is not a "stretch goal".  That is an invitation to cut corners, dump stock, and do whatever it takes (ethical or otherwise) to make the goal.  Realistic performance is what has been forgotten, and that as much as anything is what has got us to where we are now.

3.  Better marshaling of resources - if sales are poor, per diems and travel expenses need to be brought back in to contextual realities.

4.  Connect with your real customers - even if you are a mega-brand, someone on your team should be keeping track of customers.  A gesture as simple, and inexpensive as a holiday card goes a long way towards fostering brand loyalty.  SWATCH, Richemont and LVMH have more than enough people on staff to put something like that together.

5.  And what I mentioned in the beginning - never assume that you're "the nuts".  As soon as you assume that you and only you know which way the industry is going, you should put on your parka and hop on the ice floe.  You are done, whether you know it or not.  

Because let's face some facts - if the big dogs in Switzerland and Germany were always right, the industry would not be in the situation it is now.

Adapt, or die.