Allbirds, Adidas and Sperry get back to basics after a volatile year – Sourcing Journal
It goes back to basics for some leading footwear brands that have been burned by recent fluctuations in consumer demand.
After a volatile year of overstock, inflation and shifting trends, Allbirds, Sperry and Adidas are all refocusing on proven styles and categories, returning to their core brand DNA that helped them initially win over consumers.
This was a key topic this week for Allbirds, who just reported disappointing Q4 and full year results. Co-founder and co-CEO Joey Zwillinger said in an interview that Allbirds made a mistake in 2022 by overemphasizing products outside of the company’s broader appealing “core DNA” and underinvesting in core products that initially favored it the consumer had brought in.
According to William Blair analyst Dylan Carden, the “biggest culprit” of this misguided focus was in Allbirds’ performance categories, which “steered time, money and attention away from the core offering,” he said in a note to investors Friday.
Acknowledging the misstep, Zwillinger outlined a goal to return to those key styles. “Essentially, we have moved away from our core consumer in recent years and need to refocus clearly on this large and attractive group,” said Zwillinger in a conversation with investors.
Similarly, Wolverine Worldwide’s Sperry brand saw sales decline 28 percent in the fourth quarter and down 10 percent in fiscal 2022.
“We need to get our focus back on boats and make boats cool again,” Hoffman said of the brand known for its boat shoes and coastal identity, referring to a recent push to expand Sperry’s appeal beyond its waterfront heritage. “And that includes focusing our collaboration and marketing around the boat with new updated styles that really hit the core.”
Hoffman noted that people “love Sperry for its core businesses.” In the fourth quarter, the brand understood this too late and, like Allbirds, chased too many products that were irrelevant to the brand’s core consumer but popular with other brands.
This focus on Hero products has been a solid approach for other footwear brands. Crocs, for example, has been successful with its sandal and wedge lines, but the focus has always been on the classic clog silhouette, the company’s most profitable product line.
“The company had historically started to diversify away from the classic clog, but we thought that was wrong,” Crocs CEO Andrew Rees said in an October interview with FN. “We’ve refocused on the Classic Clog and almost exclusively on molded products, which are our DNA. That’s what we do best. Nobody else is good at that and we could win there.”
At Ugg, which is owned by Deckers, customers are also responding to styles that retain elements of the brand’s core products.
“These extended classics – further iterations of core classics that keep our brand DNA intact – resonate very, very well with consumers, especially younger ones, but I would say with all consumers and on a global scale,” said Dave Powers, CEO of Deckers , during the brand’s third quarter earnings call in February.
For some footwear brands, core DNA extends beyond a single product or silhouette. At Adidas, a difficult year has prompted new management to refocus on the company’s core competency of leading with sport, rather than pushing the lifestyle business.
“We should have an even higher sport focus when it comes to what we do and that involves not only focusing on the big sports but also on smaller sports because I think that sets us apart from all other brands Distinguish,” said Adidas CEO Bjørn Gulden, who joined Puma as chief executive in January, during a Wednesday call with analysts discussing the company’s 2022 results.
He also noted that Adidas should “preserve the DNA of not being a copy of Nike” and “should stand on its own two feet”.
“I think on the marketing side … we’ve divested certain sports teams and federations that we need to get back to maintain visibility and maintain credibility,” Gulden said.
https://sourcingjournal.com/footwear/footwear-business/adidas-allbirds-sperry-boat-shoes-core-products-joey-zwillinger-sneakers-422777/ Allbirds, Adidas and Sperry get back to basics after a volatile year – Sourcing Journal