https://www.jeffharbaugh.com/wp-content/uploads/2014/08/logo_color_640.gif 0 0 jeff https://www.jeffharbaugh.com/wp-content/uploads/2014/08/logo_color_640.gif jeff2014-07-15 09:37:562014-09-24 13:53:05What This Industry Needs is More Sunglass Brands!
What This Industry Needs is More Sunglass Brands!
Well, you have to admit I got your attention, and that title is way more intriguing than “What I Learned at Agenda.” I never thought I’d say this about any category, but I think there may have been more sunglass than shoe brands. And if case anybody is actually confused, that title is written in the full bloom of major sarcasm.
If you are in the sunglass business, I hope your price points are either around $20.00 or north of around $150 and very boutique focused. I know the margins have made this category very attractive (hence all the brands) but I’ll be surprised if the competitive landscape allows those margins to persist – especially in the crowded market middle.
Sunglasses were a bit of a microcosm for the whole show. As I looked at shoes, hats, t-shirts, clothing, skateboards and most any other category, there were lots, but not a whole lot of meaningful differences.
However, I am self-aware enough to know that it’s just possible I’m not all that good at spotting fashion trends. Actually, I think it’s likely I suck, so I asked most people I talked with what they’d seen that was interesting. Generally, they saw the persistent sameness I did, but with a lot of new brands presenting it.
I’m going to take a shot here and suggest that maybe this is a good thing. That’s because, in the first place, the sameness can’t get any more, well, the same. We’re swimming in a sea of similarness, if that’s a word, and it can’t last. Somewhere out there (maybe at the show, but I couldn’t spot it) is the next, brand, material, activity, style, vibe, thing that consumers are going to grab hold of and that’s going to change or create markets.
In the second place, it’s shared knowledge that we’re watching older, larger, established brands become less relevant to the markets they grew up in. As this happens, they create space for new brands, products, and trends.
It’s not like this is a new development in business cycles, or even necessarily a bad thing. It’s kind of normal. Chasing a broader market, after all, is an active choice all these brands made and are continuing to make. They are going to say, “We had no choice. We had to grow.” My answer is, “Maybe, but not necessarily at the pace and in the places you chose to.” At some level, they are victims of their own success.
I will remind you again that the further a brand gets from its core market, the more likely it is that the hoped for new customers may know the brand but not its story. Their connection to it, and therefore the brand’s competitive strength, is lower.
Burton, I think, is the poster child in our industry for a brand that was phenomenally successful in the market it had a lot to do with creating. Then, for reasons unknown to me, it tried to dramatically expand its snow distribution and move into the broader outdoor/fashion market with both the Burton and with other owned brands. That didn’t work so well. To their credit they figured it out, though I can’t give them too much credit because, like Wile E. Coyote, you can only run so far off the cliff before you are required to confront the issue.
Anyway, they crawled out of the coyote shaped hole at the bottom of the cliff, dusted themselves off, and started to take what I’d call a more patient, thoughtful, measured and perhaps a bit more humble approach. As I look at their web site, talk to people, note the management evolution, and see their presentation and product at Agenda and other shows, it looks like they can hope to preserve their position in the snowboard market and perhaps make some gradual inroads into the broader market. As regular readers know, I think they can take this more cautious and appropriate approach partly because they aren’t a public company.
As larger brands move up market and become less relevant to the space they grew up in, it creates room for new brands to succeed. Again, this isn’t new and I think it’s part of the explanation for why we see so many new brands. Specialty retailers need them and consumers seem more prone to trust new brands faster.
I’d like you to focus on what kinds of new brands we’re seeing. They aren’t “surf,” or “skate,” or “snow” specific brands so much as active lifestyle or outdoor brands. This means they have a much broader market to go after. But it also means they don’t have as strong a point of differentiation.
Many of these new brands won’t make it but this sort of creative destruction (thanks Joseph Schumpeter) is just what the market-any market- needs. They have the potential to grow larger, but they are in a space with a lot more competition. I think that’s why there are so many new brands and why I expect the turnover in these brands to be so high.
In the skate market I’d note, and have written before, that the short boards, back in The Berrics, are still separated from the long boards that are scattered around the rest of the show floor. I walk into the Berrics and feel a little like I’m entering a structure designed to keep people out. I know that’s not the intent, but there is a sort of sensibility that’s consistent with the difficulty the traditional skate brands have had evolving with the market. I’m no longer clear on the value of calling it The Berrics. Feels like the result is to create a distinction that may not be friendly to the broader market. Perhaps that’s how some brands want it. If it’s a thought out business decision, I’m fine with it.
But if not, I’d combine with long boards, make the skate section feel more visitor friendly, reconsider The Berrics name (wonder who I’ve pissed off by suggesting that), which I think only highlights the separation, and integrate skate with the rest of the show. There are a whole bunch of potential customers out there in the active lifestyle/outdoor markets.
Well, it’s an interesting time in the market and Agenda does a good job of representing it. One of these days I’m going to have to go another one of their shows. I wish they’d publish some stats on the turnover of brands from show to show.
The activity based action sports market is evolving, or maybe being subsumed, by the much large outdoor and lifestyle market. I’m not sure what the result is going to look like. Let’s hope the economy continues to improve and, for a whole variety of reasons, kids can find jobs.
I spent one day at agenda, but having spent two, your comments are of interest. I saw the same …. pun intended. Hope springs eternal new companies copying those they think are making money…. and offering nothing new, except their brand. Good Luck.
It is a time of change, and restructuring, of the sport, the industry, the markets and distribution. It is a time where a few strong companies will restructure to serve the diversity and energy of new markets and thrive, leaving those with a one ring (circus) mentality behind. Distributors are dropping their small, fading lines, and dealers are getting more and more of their goods from fewer and fewer suppliers….
For those of us who have lived through it before, it is a trying but reasonably understood period, and we are looking ahead to better times…
Saw you on day one, but you busy. Tried again day two, but you were gone. Next time.
I agree with what you’re saying including the part where there will be better times. Business cycles happen. I’m particularly interested in the role that logistics and communications are playing in the changes. And I’m wondering what being able to print a surf fin or skate truck in your home is going to do for things.
Thanks for the comment,
I work at Quik so I might be biased but from what I saw we did some new things that counter your sea of sameness summary.
1) A booth that only highlighted key product stories and showed our heritage in boardshort innovation vs. a traditional line showing enviroment.
2) Told a story about an amphibian shoe (although not the first) which is a very unique product in the marketplace and getting a lot of interested from key partners.
3) Quik arguably created the boardshort, scallop hem, yoke, amphibian, etc etc and now they are introducing “STREET TRUNKS” which is a new product category that takes boardshort sillouettes with walkshort fabrication. The team including Dane is super pumped on it.
4) Authentity/Heritage- one of the only brands that has archives and is injected those archives (products, athletes, art, etc) into stories and products.
Quik came from dudes who wanted to surf and party in an authentic way in order to support their lifestyle. They didn’t come from already gone public companies with an already created payday. They built a biz without pre-concieved notions.
I think having all the new brands is great for the industry but lets not get ahead of ourselves and say they are authentic brands or brands that have any consumer demand at all. (not that you said this but many in the industry are),
That is a challenge with our wholesale/specialty community is they are sold on strictly relationships and not what consumers will demand or ask for.
Some new brands that will be placed have a horrible logo, shit product, suspect back end operators and are in it to make some cash. (not a bad thing)
Thanks for a great post! Actually, those sound like some really excellent ideas, but as I said in the article, I ain’t no arbiter of what’s cool. I love that you got away from the traditional line showing. I’d also point out that just because one brand points out to me all the creative things they are doing doesn’t refute my argument. It does, however, make it more likely that brand will do well assuming they’ve picked the right thing. A few more comments on what you said:
1) Retailers who buys strictly on relationships, and don’t buy what the consumers demand, won’t be around long. I know there’s a lot of that going around and we’ve seen the specialty store base reduced dramatically. Perhaps there’s a relationship there? And maybe if brands didn’t put product on wheels into some of these retail outlets, we wouldn’t have this problem to such an extent. But if your brand is weak enough so that the retailer only wants it on consignment, you’ve got a branding problem that isn’t just the fault of the retailer.
2) Well of course some new brands suck, are horrible, and don’t know what they are doing. And they will be gone soon. But it’s the chaos of all these brands/entrepreneurs trying things that leads us to new ideas that work. Look, if people who started brands really knew what they were getting into when they started them, nobody would ever do it. And yes, there are some exceptions.
3) I’ll say again that it’s a problem being a public company. In our current environment, I think it’s hard to get the growth the stock market requires and maintain your brand positioning.
4) You’re right, of course, about where Quik came from. I haven’t started and built a business like that, and they get nothing but respect from me. Now, the question- right now, today- is whether or not the consumers you want to sell to care about that authenticity/heritage and, if not, how can you make them care? Please understand I want Quiksilver to succeed. A lot. I want there there to be a surf industry and a surf culture- not an “active lifestyle” with some people who surf.
Hope this don’t be your last post.
You must be a new hire at Quik to be so enthusiastic. I won’t elaborate on why most people from Quik wouldn’t stir things up on a blog like this, (considering that many of the misguided ways of the surf industry we led by Quik, especially distribution) however, When you’re Quik, you start out deep in that coyote shaped hole in the ground that Jeff spoke about, regardless of the fact that there may be some innovative product in the booth, the damage to the industry isn’t going to disappear because of a water shoe or a “street board short”. Good luck to you over there.
But let’s at least acknowledge that we’ve been in a sea of product sameness, and some new ideas and fresh product won’t hurt Quik or the industry. It’s not “the answer” for Quik, but it’s important and I’d like to see more of it.
Yes Jeff, I agree… my point was basically it probably counts less when its Quik vs a new brand being fresh due to all the history, don’t get me wrong, I’ve got a lot of respect for Andy Mooney, but given the current state of the business, and the debt, I’d have to bet that time is not on his side.
great article, Jeff
Thank you David,
Thanks for bringing up Quiksilver. They’re a great example of an OG brand that’s squandered it’s credibility and desirability in the core market. Good luck taking the brand down-market, as I read about in one of your recent press releases. It’s crowded at the bottom.
So I guess my question is if you’re a public company and have to grow, how do you not end up squandering at least some of your “credibility and desirability in the core market?” That’s the holy grail for companies growing out of a niche market. VF seems to be managing it with Vans and The North Face. Kering is trying to do it with Volcom, but I’m not prepared to say they are successful yet. Burton tried it, hit a brick wall, but seems to have learned from their mistakes and is regrouping. Who else?
Must be others.
Thanks for the comment.
Besides Vans being a “special brand” I’d say that one of the key nuances of selling across multiple channels is a segmented approach to each channel with the right (and different) product & marketing for each channel. You can’t sell all retailers out of the same bag, and there are different consumers shopping at each retailer. Van’s has clearly found a way to meet their many different consumers at many points of retail. Maybe they understand their consumers better because they do 40% of their business direct to consumer and run their own stores? Maybe its VF knowledge and financial support, one thing for sure, Vans, North Face, Jan Sport, Timberland, are all doing very well and are all owned by VF…
Let’s also not forget that Vans has been around since like 1968 and, not to oversimplify, having done enough things right for that long to make your brand kind of ubiquitous has a lot of value. That has a lot to do with making them a special brand. Remember, it’s not that they’ve gone everything right. VF bought them because they got really screwed up. But at least partly due to longevity, Vans can appeal to a very broad market without turning off one segment or the other. Of course they still have to be thoughtful and purposeful in segmenting their market.
… agreed, and to your point they clearly have been thoughtful and purposeful in segmenting their market(s)
As I perceive it, the rigor and process that VF requires of all its brands in this area is a major reason they are so successful.
Good article on Agenda. I didn’t go, but have been several times, and all I can say is that if you go back to the very first Action Sports Show, which I was present for, so much of everything stays the same, and like in surfboard design, after tons of things have been tried, it seems to come back to subtle refinements. Hurley keeps winning SIMA boardshort of the year, but they didn’t re-invent the boardshort. They refined it, and combined all the right features that other companies may have had, but Hurley put them all in one place. This speaks to creativity in more of a “keying in on key important features” aspect, and Hurley does this well. Product is not going to morph into a whole new game. 98% of California consumers want to blend in, not stand out, even if they are surf addicts. Product like Quiksilver’s is carried by emotional ties with the consumer (like growing up wearing it), so they will always have a market. The logo itself creates an emotional connection, and that won’t go away unless Q tries really, really hard. They can blow all their relationships with retailers, and it doesn’t mean the consumer will be turned off to the brand. Just constantly trying to see the good, the bad, and the ugly in everything in this industry. In the long haul, the train just keeps going, passengers get on and off, and rail cars are let go of or new ones hitched on.
Hi Big Guy,
Been on a short vacation with old friends. Sorry for the late reply.
I guess what worries me is that those emotional ties (which I agree are what branding is all about when product is similar) often only continue with the original, and now older, customer base. The critical thing for me is how you keep the old customers while appealing to the new ones at the same time. Wish I could give you the brilliant two sentence answer to that one. I think it’s a rigorous, day to day, nuts and bolts process. The management that can pull it off deserves whatever they can get paid. It requires patience, flexibility, willingness to try new things, and time. Implicit in that, I think, is a strong balance sheet.
Thanks for the good comments,