SKETCHERS

A Brief History Of Skechers Shoes.

Robert Greenberg founded Skechers in 1992. At the time, L.A. Gear had a lock on the women’s athletic
market and Nike dominated the market for men’s athletic wear. But there were no industry giants who
controlled men’s and women’s street shoes. This provided Skechers an opportunity to champion a new
and expanding niche market in the U.S.A.

Before Greenberg went out on his own to create Skechers, he was one of the founders of L.A. Gear,
which within seven years of business was already grossing more than $900 million in sales—the yield of
neon tennis shoes that favored female preferences. By 1992, L.A. Gear saw a huge loss in market share
and the company forced out Robert and his son Michael.

It wasn’t the first taste of the unpredictable, significant shift in the retail trade for Greenberg. He began
his career in the 1960s and worked in various retailing roles: from selling wigs to beauty parlors to
importing designer jeans to founding a roller skate store. But his first major break happened after he
purchased the license to place the image of the film character E.T. on his shoelaces.

Skechers Today …

Skechers is now a global leader in footwear. A two-billion-dollar leader in thousands of stores to be

exact. With more than 3,000 styles designed, developed, and marketed for men, women, and children,
Skechers focuses on two distinct categories of footwear:

Lifestyle offers Memory Foam: Contours to the singularity of your foot for ultimate comfort.Performance
offers GOrun and GOwalkGOrun offers innovation in technology that facilitates a midfoot strike coupled
with cushioning and impact protection.GOwalk offers GOga Mat Technology boasting high-rebound
cushioning and other materials made specifically for athletic walking.
Executive Summary

Skechers has had recent success in the performance shoe category, entering the middle majority of the
product lifecycle.Skechers walking shoe category (specifically the mens Relaxed Fit line) has the most
room for growth.Positioning itself with strategies for each category can leverage existing resources and
grow new market share.There is also a large opportunity to grow social media presence and online sales.

Business Overview

Skechers is a multinational American lifestyle shoe brand founded in 1992 in Manhattan beach, CA with
$3.56 billion in revenue and 2,300 retail stores across 160 countries (skx.com 2017). Its retail stores fall
into three varieties: Recently, in 2015, Skechers overtook Adidas in US sales to become the number two
shoe brand by market share in the US with 5% market share(Low 2016). Skechers has many product lines
under these umbrella categories: mens, womens, boys, girls and performance. Within each of those
categories, there are seven or more distinct branded lines. Skechers has already developed diverse sales
channels including its own retail stores, major sporting goods retailers and specialty stores. They also use
several marketing, advertising and promotional channels to reach customers, primarily through
traditional media and with celebrity sponsors (Gould 2015).

Recent gains in market share were driven specifically by womens, boys and girls categories. These sales
are believed to be caused by the emerging athleisure trend and international expansion(Soni 2016). The
driving force behind the athleisure trend is an increased emphasis on comfortable, stylish footwear that
performs for the health-conscious and aging population. Skechers last major rebrand happened in 1998 ,
but individual product lines have developed their own branding and operated independently since then.
As a whole Skechers is growing rapidly, although sales in the mens category and specifically the Relaxed
Fit line are slowing.

The US and global market for shoes is a mature saturated market. In the athletic shoes market, where
Skechers has grown the most rapidly in recent years, the main competitors are: Nike, Adidas, Asics, New
Balance, Puma and Under Armour. However, the mens Relaxed Fit line is in the walking shoe category
with main competitors: New Balance, Avia, Nike and Deckers. Indirect competitors appear to be
supporting fitness and orthopedic brands such as Dr. Scholls and Lululemon Athletica. As demonstrated
in the market position maps (figure 1 & figure 2), Skechers has positioned itself as an affordable,
fashionable and functional shoe brand.
As an overall brand, Skechers target market spans boys, girls, women ages 18-40 and men 30-50 years
old. As mentioned, the kids and women categories are performing exceptionally, while the growth in
mens is limited. Skechers needs a strategic approach to understand this disparity and spur growth in the
mens category(Jenks 2015).

The Skechers Relaxed Fit product line specifically targets men between the ages of 30-50. The specific
attributes for Relaxed Fit are: comfort, affordability, casualwear, business and durability. This line is
positioned as walking shoe for active customers that value comfort.

With its unique market positioning, Skechers has developed distinct strengths, weaknesses,
opportunities and threats (figure 3). Their most prominent strengths being: high market share (2nd in
the US shoe market), diverse product offerings across many lines, diverse distribution channels and
patented memory foam insoles. Their biggest weaknesses are: an aging customer population (specifically
baby boomers), weak social media presence (only 196k followers vs. Adidas’ 17m and Nike’s 74m) and
an aging brand identity (Socialbakers 2017). However, there are opportunities in: growing walking shoe
sales (specifically the Relaxed Fit line), capitalizing on the athleisure trend, international expansion and
building a social media and ecommerce presence. Although, current threats are: market saturation in
athletic shoes, changing customer preferences, and a reputation as a copycat brand.

Marketing Plan

Since Skechers has a wide portfolio of product offerings, it can utilize different strategy variations for
performance shoes and walking shoes. For maximizing growth on all fronts, Skechers marketing
objectives should be to maintain demand for its performance lines and grow new demand for its walking
shoe lines.

PRODUCT STRATEGY

Skechers’ performance products are in the maturity stage of the product lifecycle. Appealing to the
middle majority, they are approaching peak sales. Skechers has continued to grow domestically and
internationally, but should be prepared to enter the decline phase due to the shape of the product
lifecycle curve (figure 5). Due to the saturation, Skechers should seek to minimize cost per sale and
maximize profit margins. Adding diversity to mature product lines can be achieved through customizable
options for consumers. Offering new limited edition colors, materials and finishes can maintain demand
and provide opportunities for increased marketing of existing product lines.

Since market share for mens walking shoes still has room to grow, they are in the early majority stage of
the product lifecycle. To rapidly grow market share, Skechers should push its Relaxed Fit product line as a
unique offering. This can also serve to counter its reputation as a copycat brand.

Both of these product lines can grow by developing new markets geographically and leveraging
international footholds with a sprinkler launch approach (launching simultaneously across multiple
countries) and breaking into ecommerce sales. Ecommerce especially has high potential to increase sales
with minimal expense. Partnering with more big box retailers can also grow sales without heavy capital
expenditures.

PRICING STRATEGY

As a developed industry, Skechers needs to utilize price skimming to maximize profit margins based on
customer willingness to pay and competitor pricing. The performance lines should be benchmarked with
competing performance shoes, while the walking lines should charge a maximum price based on
demand.

PROMOTION STRATEGY

Skechers’ currently has a stable product positioning between utility and ego-expression; This can be
pushed in marketing as providing functional benefits that contribute to lifestyle choices. To achieve this,
there needs to be an increase in traditional marketing and building a robust social media presence.

Since Skechers has operations in 160 countries worldwide, it’s in a position to leverage economies of
scales for traditional marketing channels, such as print, broadcast and web marketing. This enables it to
build awareness quickly with low cost per customer creating bandwagon appeal. Recently, Skechers has
had positive effects of utilizing celebrity endorsements across its product lines. Notable celebrities
include marathon winner Meb Keflezighi, Demi Lovato and Joe Montana that promote diverse product
lines. Given the past results, Skechers can continue to attract high profile celebrities to drive awareness
and sales unique to each product category. There are opportunities to take two separate strategic
marketing approaches between Skechers performance shoes and walking shoes, without the caveat of
maintaining balance between new and traditional audiences.

Primary focus of advertising and promotion for the performance lines should be on maintaining market
share and reminding existing customers to repeat-purchase. Staying consistent with existing branding,
while simultaneously updating styling keep customers familiar, but interested in new versions of
products.

For marketing the walking shoe lines, advertisements and promotions need to take a persuasion
approach to attract new customers. Refreshing the walking shoe branding (see Appendix A) will allow
the Relaxed Fit line to be introduced as a new offering.

For all of Skechers products, social media is a key point of opportunity to build social currency and
bolster existing customers. This type of advertisement and promotion can synergize with ecommerce
sales. In building social currency, Skechers can use athleisure, active lifestyles and comfort as triggers to
drive behavioral targeted advertisements(Digital Commerce 360 2008); Pushing an aspirational angle
with emotional appeal towards achieving and being comfortable at the same time. Platforms such as
Facebook, Instagram, Snapchat, Twitter, Google ads and affiliate web marketing should all be used to
maximize reach.