Mike Hofman

Upstarts: Tapping Generation Y

 
Clothing 34%
Entertainment (including computers) 22%
Food 15%
Cosmetics and personal-care products 8%
Sporting goods and clothing 6%
Reading material 3%
Other 11%

Source: React magazine.
Note: Percentages do not add up to 100% because of rounding.

Still awesome after all these years

Keeping a brand teen relevant is truly an art form. And the makers of Vans sneakers are the Picassos of their breed. The company has thrived in this tricky marketplace for most of the past 30 years. Vans CEO and president Gary Schoenfeld says he can describe his brand in two words: "Jeff Spicoli." That's the name of the stoned-yet-affable surfer dude portrayed by a young Sean Penn in the seminal 1982 teen movie Fast Times at Ridgemont High. Back then Spicoli's trademark Vans checkerboard slip-ons became must-haves for cool dudes across the country. Today the Spicoli character is something of a metaphor for the Vans brand. "His Southern California attitude and image endures," Schoenfeld explains. "Kids can get it quickly."

And kids do get Vans. The business racked up $205 million in sales in fiscal 1999. What's more impressive, it enjoyed a striking 11% surge in same-store sales in 1998. How has the company captivated a new generation of teens? By ripping apart its business and starting fresh. Schoenfeld explained the makeover to Inc. staff writer Mike Hofman:

Inc. : You became CEO of Vans in 1995 and promptly overhauled the business. What was wrong with it?

Schoenfeld: Vans had evolved into a family-shoe manufacturer -- its advertising was all over the place, appearing in everything from GQ to Mademoiselle. The company made 100% of its footwear in two U.S. factories, which was a problem because the tooling in those two factories limited the styles we could make. The company couldn't react with the market, because it was very expensive to change the tooling on short notice.

Inc. : So how did you change the company?

Schoenfeld: I wanted to get everyone inside the company thinking about Vans as a global brand aimed at consumers aged 10 to 24. Vans really thought of itself as a manufacturer, but I wanted the company to be much more product and customer driven.

We decided to close the U.S. factories and source the shoes in Asia. With manufacturing outsourced, marketing became the company's focus. You have to strategically commit to the teen market and then tactically find the things that are relevant to teens and cost-effective for the company. Kids don't relate to direct hard-sell advertising. They see through a company that's just spending a lot of money to attract their attention. Our strategy is to ingratiate ourselves more into their lifestyle. Rather than pour money into advertising, we invest in sports and music and entertainment, sponsoring music festivals and events in our core sports -- surfing, skateboarding, BMX biking, and snowboarding -- all closely related to the Southern California lifestyle.

Inc. : How do you keep up with trends?

Schoenfeld: By staying close to the consumer. We've designed and built three huge skateboard parks in Southern California -- one of them is the largest in the world. Thousands of kids visit them every month. Our designers and product people spend a lot of time at the parks. We do some focus groups there, but we've found that we get the best insights when our people hang out with teens more informally. We also learn by watching them skate. As they push things in their sports and find ways to do new tricks, we can incorporate design changes into our footwear.

Inc. : Will you move into more traditional team sports?

Schoenfeld: You have to start with the customers and the things they relate to in your brand. We don't put up banners at Dodgers games trying to appeal to the whole family. We look to see if we can create a leadership position in a sport. If we can't, then it's outside our realm. We look to see where our customers cross over. Snowboarders don't tend to play soccer, so that's not something we're going to incorporate into our brand.

Inc. : Do you ever flirt with expanding your target audience?

Schoenfeld: No. You have to be comfortable with not retaining a customer for his or her entire life. We won't try to reach that same customer 20 years from now. Our focus will be on a new batch of young consumers. That's where we've been successful. If you really want to reach the teen market, you have to focus on them specifically.

Baby bump

Talk about your sweet target market. Although from 1972 to 1976 Americans produced nearly one million fewer babies per year than they had a decade earlier, maternity-ward traffic later rebounded to pre-Vietnam, pre-Watergate, pre-disco levels, peaking in 1990. Children born in 1990, most of whom are now in the fifth grade, are just entering their key consumer years.

 PREV  1 | 2 

Mike Hofman was previously editor of Inc.com and a deputy editor at Inc. magazine, which he joined in 1996. The site was nominated for a National Magazine Award for Digital Media in 2010, and was named the best business website by Folio Magazine. In 2006, Hofman was part of a team of writers nominated for a Webby Award for best business blog. He lives in New York City. @mikehofman