They make up a small portion of the $21.2 billion sneaker market, but collaborations can generate some of the industry’s biggest buzz. However, those developing these projects aren’t staking their efforts on a direct financial payoff; they’re banking on visibility.
“The social media mentions alone are off the chain. They clearly are causing social media to step up and pay attention, and there’s value in that,” explained Matt Powell, senior sports industry analyst with The NPD Group Inc. “It’s a marketing story.”
“I don’t want to shortchange the collaborations that we’ve done, but [they] are just content,” explained Jeff Staple, creative director of Staple Design. “It’s important for a brand and creator like us that we’re on the tip of the consumer’s tongue and constantly talked about.”
Staple’s latest work is the Nike Dunk SB Low “Panda Pigeon,” a continuation of the original “Pigeon” style he created in 2005. The newest iteration, a black and white silhouette, features images on the outsole reminiscent of the New York Post headlines that documented the craze behind its first release.
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Staple’s use of storytelling was a hit. The sneaker sold out during separate launches in China and at Extra Butter in New York’s Lower East Side almost instantly and within minutes of its launch on the SNKRS app. It’s that kind of buzz that Staple hopes will transfer to other products in his stable. “Being that something I created is in your mindset, the idea is that you then support something else that we’re doing such as our clothing line or a trade show or a podcast,” he said.
And other niche designers and boutiques are reaping similar benefits.
Last year, Concepts revisited its “Lobster” Nike Dunk SB Low history, which dates back to 2008. The pioneering streetwear retailer delivered two new takes, “Purple Lobster” and “Green Lobster.”
“Collaborations are essential in helping give a better understanding of who we are — they’re about communicating to customers who we are,” said Concepts VP of creative operations Deon Point. “There’s certain things we can do on our own, but merging with the right brand can showcase our personality a bit more.”
While the original “Lobster” product sold out, Point said the shoes ultimately cost Concepts more than they generated in sales — but it’s a reality that collaborators are often prepared for from the outset.
“I wouldn’t necessarily call it an advertising expense, but we knew our efforts would pay off at some point,” he explained.
Extra Butter art director Bernie Gross said he, too, recognizes that making money on these projects is a secondary goal.
“A huge objective for our collabs now is to, every time, broaden our audience by 5 or 10 percent,” he said. “We have to open up visibility to our non-core customers. Consumers out there want to consume — we just have to make sure they want to consume all of our product.”
And these collaborative efforts are not made solely to impress shoppers stateside; their reach often extends far outside the U.S.
“Because we’ve had a good history of putting things out there with multiple brands, it’s become something the market looks to us for,” said Mike Packer, owner of Packer Shoes. “They’ve helped us, over time, grow in people’s minds and helped the store grow both domestically and internationally. People appreciate what we do on a worldwide level.”
GETTING IT RIGHT
Despite their popularity as a business strategy, not all collaborations resonate. For Extra Butter’s Gross, the project needs several key elements.
“There has to be a genuine connection between the brands, it has to be a strong product, and the story has to come alive through marketing — whether it be through influencers or strong experiential activations,” he said.
According to experts, it’s not difficult for consumers to recognize whether a partnership is genuine or if it’s solely a play to make a quick buck. “If you have to tell a convoluted story as to why these two came together, the public is going to look right through the bulls**t, like this clearly is for sales purposes,” Gross said.
Packer also noted that while these kinds of multibrand endeavors are often rooted in authenticity, he’s observed a change in the trend.
“When collabs first started, it really was a true partnership with a brand,” he said. “But over time, the word ‘collaboration’ has [gotten] diluted. If something was stamped a collaboration, customers would flock to it, so it’s become a bit of a money grab.”
If performance at retail — as well as on the resale market — serves as a reliable barometer, rap star Travis Scott’s efforts with Jordan Brand and designer Virgil Abloh’s line with Nike are solid examples of cohesive partnerships.
While those collabs seem logical, efforts that come out of left field can also pick up steam.
“When you see Concepts partner with Birkenstock or Mephisto after doing something with Nike or Adidas, it catches people off guard, and we think that’s important,” Point said. “We want to highlight brands that command respect, but maybe some of our consumers don’t know how impactful they are.”
THE BRAND COMPONENT
Dave Grange, SVP of footwear at Lacoste, admitted the label isn’t as active on the collaboration front as major athletic players such as Nike and Adidas. But when it delivers, the benefits are tangible.
“Collabs are an important part of our brand heat strategy,” Grange said. “The coverage on social platforms and the conversation it ignites are a huge barometer to follow. When people in the industry and our customers are excited for an apparel or footwear collab to drop, it drives energy around the total brand.”
Lacoste has partnered with streetwear staples and brands such as Supreme, Footpatrol and Bait, but Grange said its biggest footwear collab is coming this year.
Reebok, meanwhile, can credit much of its comeback success — as well its growing share of the fashion-focused marketplace — to partnerships its Classics business has forged of late. Unit GM Kelly Hibler named its recent work with designers Kerby Jean-Raymond (via his Pyer Moss label) and Victoria Beckham as two of the brand’s most important projects to date.
“Collaborators give you the opportunity to have someone else translate your brand through their eyes,” explained Hibler. “It allows the consumer to go, ‘Wow, I haven’t thought about Reebok that way.’ It’s super-valuable and also hard to do yourself.”
Just like it does for niche designers, these projects help more established brands engage new audiences as well as boost sales for other products and categories.
“You get, for example, Club C fans who see a collaboration [on a model] and say, ‘That’s great, I want that. And I need another pair of [Reebok] white-whites,’” Hibler said. “[These deals also] bring new consumers to your product. Fans of Victoria’s that may have never purchased Reebok look at it through her lens and are like, ‘Wow, that’s beautiful — why haven’t I worn that before?’”
And when a pairing works well, it can create new positions in the marketplace for both parties.
“Collaborations not only create space for our brand by enabling Converse to connect with consumers in new ways, they move both us and our [partners] to new places together,” said Converse chief marketing oö cer Sophie Bambuck.
PRICE OF ENTRY
When Concepts delivered its extremely limited Nike SB “Grail” pack in 2015, featuring a Dunk Low, Dunk High and Stefan Janoski Max, the sneakers retailed for $135 to $185.
Meanwhile, to secure the product, execute a promotional build-out and create custom packaging, among other things, the retailer spent more than $300,000. “We spare no expense; we overspend. We package [the product] ourselves — that’s costly — as is doing something like a build-out,” Point said. “We go into a collaboration knowing we’re going to spend, but in the end, it’s our obligation to the consumer to separate ourselves from where else they spend their hard-earned money.”
But even with all of their investment in product, marketing and storytelling, collaborators still aren’t able to eliminate all possible risks or avoid other tough decisions.
“For us and for most who collaborate with [brands such as] Nike, the collaborator is on the hook for the product,” Staple said, recalling his joint effort with Nike in January. “If you tell them you want 100 pairs, you have to pay for those 100 pairs. If you buy them and they don’t sell, you’re still stuck paying that bill.”
Projects of this magnitude can also be time-consuming and place strain on key stakeholders.
“Doing one collaborative project [takes] the same effort as putting together an entire season, an entire collection of clothes — sometimes even more,” Staple said. “For the ‘Panda Pigeon,’ I went to [Beaverton, Ore.] four times. It’s a lot of time, a lot of travel, hundreds of emails, lots of FedExes going back and forth, just for one tiny shoe.”
Sneakersnstuff co-founder Erik Fagerlind said he’s dedicated resources as well as an extensive share of his marketing budget to collaborations.
“SNS doesn’t do much traditional marketing where we buy ads, so we spend money around creating concepts for people to talk about,” he said. “At times, we’ve spent more time, money and energy to create the concept around a product knowing it will not make up for the money spent.”
Gross also admitted Extra Butter has spent extensively on its similar ventures. He said marketing and promotion expenses are more than double the costs of stocking the product.
“We have to disrupt the market of every other special release that’s coming out,” explained Gross. “If it doesn’t feel bigger than life or very artistic in a movie cinema way, like you just sat and watched a great two-hour movie, then it doesn’t speak to who we are as a brand.”
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