Tuesday, November 24, 2009

Lessons from Airwalk

Airwalk, a board sport footwear company founded by two entrepreneurs out of California in 1986, capitalized on clever advertising to spread the buzz and build a formable, trendy brand during the evolution of board sports culture. Then in 1996, after great success, it decided to go mainstream.

Read On:
In the beginning, Airwalk’s core market was teenagers that embraced the beach and skate culture of Southern California. They marketed canvas shoes in bright colors and then a more durable skate shoe with thick soles and cushions. They sponsored professional skateboarders and developed a cult following – Airwalk was cool. In 1993, after building a small, comfortable $16 million company, they decided to target all the extreme sport enthusiasts: surfers, snowboarders, mountain bikers, etc. The company implemented a buzz marketing campaign where they placed dramatic photographic images/ads of Airwalk fans on billboards and postings on construction-site walls, utilized alternative magazines, even worked to get alternative rock bands to sport their footwear. Subsequently, they implemented a clever TV advertising campaign that incorporated the culture cues that innovators were exhibiting around the country as it related to the music, clothing and television. Boom, by 1996 their sales peaked to $175 million. Crash, in 1997, their sales faltered. Why? Two reasons:

1.) The classic case of a company growing too fast and not having the proper infrastructure in place similar to a case study I presented last December about Jones Soda in Show Me the Buzz

http://smartketingreflections.blogspot.com/2008/12/show-me-buzz_7646.html. Specifically, they experienced production problems, thus had difficulty filling their orders.

2.) Airwalk’s original strategy was to sell their products to their “cool” innovator customers distributed via boutique extreme sports stores around the country, an exclusive, more upscale product line, signature items retailing for $80 and up. Exclusivity is a proven marketing strategy since it makes everyone feel special
http://smartketingreflections.blogspot.com/2009/04/exclusivity.html. Instead of sticking with their original strategy, Airwalk in its quest to expand their overall sales, also attempted to retail a line of less elaborate shoes for $60 distributed to Kinney’s, Champ’s, Foot Locker for the mainstream consumer.

Summarizing Lee Smith’s thoughts, their President at the time:
“In the world of cool, it all works on word of mouth. Cool brands treat people well, we didn’t. We should have paid attention to the details and listened to our innovators who began telling us, you guys are sellouts, you guys went mainstream, you guys s**k.”

Key Learning: Respect you niche.

I would like to take this opportunity to wish you and your family a Happy Thanksgiving.


  1. I lived in CA during that time and still have a pair of vintage Airwalks I bought in Venice around 1997. Although I didnt skate, I loved the look and feel of the chunkier-soled treads. I was disappointed when they quickly went mainstream, and gravitated over to another niche brand made in Orange County: VANS. They also went mainstream, but did it right by keeping their quality and design high, and distribution limited. I still buy VANS today. Know your customer and push their buttons at every opportunity.

  2. I read an article that 'Facebook is Getting Uncool with 18 to 24 year olds' which was the original target market (college students) for Facebook. The article states:

    "There's a 'parents turn up at the party, the party's over' kind of thing going on," says Mark Potts, Mindshare's North American managing director for consumer insights. Potts says his company began to notice a shift in younger users a year ago, and a recent study shows that more than half of 18- to 24-year-old users say Facebook is "diluting the quality of relationships."

    Your post is directly relevant to this issue. Facebook will probably be fine given the new breath of Target Markets currently served. But, they will need to think about this for the future as niche networking sites can chip away at the one is 'for everybody'.

    Article here: http://www.adweek.com/aw/content_display/news/media/e3i15e6314384dccfe3fbf6715a445e0e2b

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