How does a once-hot brand win over new customers after losing its way? In the competitive athletic marketplace, for K-Swiss president Barney Waters, the answer is by returning to the company’s roots.
When he assumed the role in 2016, Waters — the former chief marketing officer of K-Swiss Global Brands — was tasked with reviving the faltering label. Among his major moves, the leader chose to resurrect its tennis heritage, which had been pushed aside to focus on more popular product categories such as performance running.
“Even though the tennis business is not very large, K-Swiss’ strong tradition of performance tennis gives them authenticity and credibility,” explained Matt Powell, senior sports industry adviser with The NPD Group Inc.
Also, Waters installed a modern brand position: selling K-Swiss as a company that makes sneakers for entrepreneurs. To promote the fresh messaging, he brought in an unlikely collaborator: internet personality and VaynerMedia CEO Gary Vaynerchuk.
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“Any nontraditional endorser is a great story,” Powell said. “Gary Vaynerchuk is a colorful guy who has made a lot of money and has a huge following on social media for a businessman. It’s a very creative way to get the brand’s name out there.”
The partnership with the ad agency executive has also helped K-Swiss engage with a crop of sneaker enthusiasts who had been elusive for the brand. “Gary brings a new audience to K-Swiss, and a certain kind of cool,” said sneaker YouTube sensation Mike “Mr. Foamer Simpson” Lytle. “He’s built a pretty diehard following, and that’s who the sneaker resonates with.”
The moves appear to be paying off. K-Swiss year-to-date sales are up 45 percent in the U.S., according to Waters. Meanwhile, globally, the brand is expected to see a 30 percent gain in 2018.
Here, Waters sounds off on returning the label to prominence, celebrating an entrepreneurial spirit and luring in young customers.
How has K-Swiss evolved since you took the helm in 2016?
“When I took over, it was after the acquisition by E.Land [in 2013]. K-Swiss had been through years of decline and loss. My first [task] was to clean up and reset. We [trimmed] inventory, put a new team in place and moved our office to downtown L.A. [We also improved] brand positioning. K-Swiss had awareness and equity but had lost relevance. Now we’ve taken action to become a specialist again rather than a generalist — and to find an open lane that was authentic to us, which happened to be tennis. We coined the term ‘American heritage tennis.’ That [was] a lane we could own.”
How has E.Land impacted the label since the acquisition?
“The main benefit is, we were able to survive the years of decline. We’ve applied their business philosophies to what we’re doing. They’re specialists in brand building, [and] we’ve benefitted from their advice and counsel. We’ve [also] been able to open up distribution in their stronghold markets — they are our distributor in China.”
Who are your major competitors?
“Anyone in the athletic sneaker business is a competitor. Obviously Nike, Adidas, Puma, Reebok — all the big guys — are sold in the places we aspire to be sold in. But they’re out of our league in terms of the size of revenue. And brands like Fila, which is very similar to us in terms of having authentic history and strength [given the] ’90s and early-2000s revival.”
What’s the biggest challenge K-Swiss is up against?
“The sneaker market is like the beverage market with Coke and Pepsi. You’ve got Nike and Adidas, which dominate all aspects of our market. We’re [essentially] in a competitive situation with Coke and Pepsi, so our biggest challenge is not to create cola. We cannot have a derivative version of what our competitors are doing.”
What is the company’s greatest strength?
“Our authentic heritage. We have more than 50 years of consumer trust and support, and you can’t go back and create that. And K-Swiss is largely untouched; it hasn’t been through multiple restarts or changed hands multiple times, had multiple strategies. It’s also pretty clean in terms of licensing and distribution — it has not been pulled in different directions by different entities.”
K-Swiss is now in the electronic sports business. Is esports the next big thing in sneakers?
“It should be. Kids aren’t playing catch with a baseball mitt with their dads anymore; they’re playing Fortnite with their dad. The esports viewing audience — on key esports events — is doubling that of the NBA Finals. I’m glad we’re already working on esports because it’s undoubtedly the future.”
Why did you tap Vaynerchuk to lead the entrepreneurial push?
“He brought the idea to life that entrepreneurship is the new aspiration of young people. That position predated our deal with Gary, and we went looking for him to bring it to life.”
How has he impacted the brand?
“When we did the deal with Gary, he had 600,000 followers on Instagram, and he now has 3 or 4 million. We’ve grown together. He has had a huge impact for us by putting a face to our efforts. He’s a social media machine, and he’s managed to get our message out. We have so many new customers now because he brought K-Swiss to an audience that hasn’t thought of us in years.”
Who would be your next ideal ambassador?
“Someone known for entrepreneurship [and] living that life. It would be great to have a female counterpart. Women are half the market and want to be represented across the board. Also, minorities are overindexing in terms of entrepreneurship. About 30 percent of new businesses are started by minorities. The same way you see other sneaker brands’ websites [using] athletes to launch their shoes, you’ll see entrepreneurs on K-Swiss launching our shoes.”
How will K-Swiss court younger consumers?
“Through a combination of progressive tactics, including our focus on entrepreneurship and foray into esports. We also launched heritage K-Swiss apparel for the first time in years through our license partner, High Life. That hit PacSun and Foot Locker and [targets] younger consumers who wear throwbacks and [like] niche, unknown brands.”
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