CEO Tobias Reiss-Schmidt on Scaling Rockport

Rockport is on the comeback trail.

After more than a decade of dipping sales, the comfort brand is regaining its hold in the market, thanks to more tech-driven product, a focus on its women’s lines and edgier marketing.

“The brand had been going backward for more than 12 years in the U.S.,” said Tobias Reiss-Schmidt, president and CEO of The Rockport Co., who was promoted to the top spot last March after the departure of Michael Rupp. “We got complacent. … At some point, if you don’t keep innovating, that comes back to haunt you. When you don’t have new ideas, all you can talk about is price. That’s what happened to Rockport. It became a promotional vehicle.”

A renewed focus on marrying fashion with technology (borrowed from parent company Adidas Group) has contributed to the brand’s turnaround. “We always stay up-to-date with what’s going on in the Adidas innovation team,” Reiss-Schmidt said, citing the proprietary Adiprene comfort system that’s found in all Rockport product.

In 2012, Rockport posted mid-single-digit growth over 2011, with expectations of high-single-digit gains this year. Currently, the U.S. is Rockport’s biggest market, accounting for nearly half of overall sales. The brand has 43 full-price stores and 70 outlets, in addition to distribution in department stores, independents and e-tailers.

Although Rockport has made some gains, Reiss-Schmidt admits the brand message has resonated more with men than women, with men’s accounting for 70 percent of business. “In women’s we still have to get much better in delivering against our mantra — style made comfortable. We’ve made a pretty good step in that direction for fall ’13.”

Retailers are upbeat about the new female focus. “Now they’re more appealing stylewise, [while] offering the benefit of comfort features,” said Bobby Adler, GM at Paramus, N.J.-based Globe Shoes, which has been selling the brand for three decades.

To spark interest among female customers, Rockport will continue its collaboration with model and actress Erin Wasson, who will be the face of the brand in its 2013 ad campaign.

Overall, “we are in a lucky position that we’re growing,” Reiss-Schmidt said. “If the economic situation was better, our business would be even better. But we have still been able to gain share.”

How have you gotten the brand back on track?
TRS:
Rockport had not been doing well because of [tired] product. Now, product is the main reason for [its] comeback. We have shoes again that are truly innovative by using sports technology in a smart way. Not as a marketing story, but as a way that’s effective. We have styles for which consumers are willing to pay a premium. We’re not discussing price, but talking about new ideas.

What are you most excited about for fall ’13?
TRS:
[Product] under the heading “lightness.” It’s part of the brand’s DNA, and we’ve gotten a great reaction. We’re expanding the lightweight concept for fall ’13 [in collections including] RocSports Lite, TruWalk Zero and men’s Ledge Hill [styles] that go from dress casual to casual. [They’re franchises] created in 2012 that we’re building on in spring ’13, then developing further in fall. [To] refocus Rockport as an innovation leader requires not being innovative for one season, but working on keeping the pipeline full. Total Motion is a new [technology] we’re launching in a limited way for fall ’13 that’s lightweight, but combines flexibility and stability in a completely new way.

Have you tweaked the design process?
TRS:
We have a global design team. We have our own designers, but we also use outside ones. We started working with design offices in Italy … that’s a big focus for us right now in women’s. Our design [also] is guided by input from [merchandisers in individual] markets. We also started to again involve our key retail partners. There are retailers especially in the U.S. that have a really long history and emotional connection to Rockport, and know what the brand can be to the consumer.

How closely do you work with Adidas?
TRS:
We always stay up-to-date with what’s going on in the Adidas innovation team. They’re working on materials that are relevant for us. Currently, we’re very successful with our lightweight product, something based on materials from the athletic world. But there are situations where we talk about [projects] we’d like to launch and [have gone] to Adidas to see whether there was an idea out there we could use. We’re communicating the fact that Adiprene by Adidas is in every Rockport shoe. We’ve been doing that in men’s consistently, [and it’s been] a big part of the success. We’re doing more of that in women’s now as well.

Who is the Rockport customer today?
TRS:
The metropolitan professional. We find them everywhere. They’re commuting to work in Japan, Asia and other markets, just as much as in the U.S. and Europe. The need for comfort is the same everywhere, but the style of clothing the shoes have to go with differs from market to market. Going forward, we’ll take that much more into consideration.

How do you communicate the comfort message to consumers?
TRS:
In the U.S. and [globally], the biggest opportunity is in stores. Getting shoes on people’s feet at the point of sale has been a huge focus. It’s been a big part of the comeback of the brand in the U.S. under the leadership of Bob Mullaney, president of the Americas. We’ve partnered with key accounts to better execute [the sale]. It includes the presentation of the shoes and training of the sales associate. They [now] learn much more about the brand and can bring that knowledge to the consumer.

Have most of your shoppers bought the brand before or are you targeting new consumers?
TRS:
By now, it’s a mix. Four or five years ago, the brand was very reliant on the heritage consumer, no doubt about it. We’ve embraced that consumer and [still] do today, but we’re seeing a lot of consumers under 30 buying our product.

Where do you see the most potential in the women’s category?
TRS:
The casual side. That’s probably something we weren’t focused on enough [over] the past two or three years. Going forward, we’ll deliver more and more innovative [casual] product. [However], the idea of making stylish shoes comfortable while not compromising on the style is also highly relevant for heels. We have a right to play there, but we need to make sure we deliver really strong product. You have to prove yourself to the female consumer every time she goes out and buys shoes.

Where are you focusing your distribution?
TRS:
We want to work with all the better department stores [while also] working with the key independents. We’re trying to enlarge our business in the independent channel. From our perspective, it’s extremely powerful in the U.S. It’s where consumers go to learn about the brand, as well as where our story can [best] be told by sales associates. That challenge [is more difficult] in department stores.

What role does online play in your distribution?
TRS:
It’s very important. We have an unusually high share of [wholesale] business in the online channel. We work with all the big ones — Zappos.com, Amazon.com, Shoebuy.com, for example. The fact that Rockport is doing so well with e-tailers shows us there’s demand for the product.

Are you tapping into social media more?
TRS:
[We use] Facebook, Twitter, Instagram, Pinterest. It’s a way you can get people engaged. You have consumers who talk about your brand and spread the word. One of the strengths of Rockport is once you’ve tried [them], consumers stay very loyal. We lose very few people compared with other brands.