The Tanning of America (24 page)

One of the many distinctions of the Reebok sneakers was that they were made with very expensive leather that was considered to be ladies' handbag leather or glove leather. As such it was thinner and softer than most athletic footwear and tended to wrinkle—like an elephant. Well, somebody in the company saw the wrinkling as a problem to solve and recommended the use of a thicker and smoother leather that cost less too. Made sense. But as soon as sneakers without the wrinkles started hitting the stores, sales began to slip. And Paul, being the smart entrepreneur that he is, insisted that he didn't care what it cost—they had to use handbag leather again. Companies miss these lessons all the time when they're so concerned about making money on the margins and trying to cut costs that they don't see the enchantment that consumers have with the product. In the case of Reebok, handbag leather, wrinkles and all, was a detail that authenticated the brand.

The affection that female consumers had for the Freestyle ran so deep that the shoe earned its own local colloquialism. In New York girls called them the “5411s.” Wonder why? Nope, it wasn't the model number on the box. That was exactly what a pair of Freestyles cost when you added tax: $54.11. Reebok 5411s were code for being in the know in the best sense of the word. And meanwhile, as that phenomenon was building an army of female consumers, Reebok also made significant inroads into marketing to male consumers—thanks to new technologies.

Paul tells a great story about something that happened at Reebok headquarters in Brockton one day when he found a pair of boots in the wastebasket. This was a situation when after all the conversation that had been going on about looking for new possibilities, he realized that sometimes your company isn't going to invent it but that someone else will. And in those cases, Paul stressed, “you have to see the product, recognize it, and then transform it into something that can work.”

The pair of boots had been jerry-rigged—as Paul Fireman put it—by an older gentleman, a World War II veteran turned inventor, so that the insoles provided added cushioning in the form of two “humps.” Apparently someone in the office had opened the mail and had no idea what to do, so they had chosen to dump the prototype for the “Pump” technology into the dustbin of history. Instead, Paul rescued the boots and met with the man, who described his invention as “energy air” that was not so much for high-performance sports but for good old-fashioned walking. In another twist of good timing, during the late 1980s one of the fastest-growing footwear categories was walking shoes. So Paul made a deal with the man to take the technology into a product that promptly sold seven million pairs a year.

That was only a glimmer of things to come. Similar technology, as it was, further developed for high-performance athletic sneakers—allowed you to apply pressure to a basketball-shaped pump on the shoe and customize how much air cushioning you had. The Pump was spectacular, as was its sequel, the Double Pump, which offered one of Reebok's most memorable slogans: “Life is short. Play hard.”

The Pump really was a phenomenon. Not only was the design hot and the concept fresh but it impacted the game of basketball—as witnessed during a famous televised dunk contest in 1991 when an unlikely contender, the Boston Celtics' Dee Brown, a kid from Jacksonville, Florida, wore his Reebok Pumps to the contest. When it came time for Dee's turn, he backed all the way up, and before he took off, he kneeled down and started pumping the shoes. And this blatant endorsement of Pump technology that was going to improve his dunking sent him flying into the air with a no-look dunk—that enabled him to come from nowhere and win the contest—and simultaneously put the shoe on absolute fire.

After that, Dee Brown used to joke that there were only two basketball players in the NBA with legendary sneakers—him and Michael Jordan.

True. During this period, Nike had definitely not been idle. And Reebok wasn't the only sneaker getting help from rarified air. One of the ironies in this whole saga is that in 1982 when the Freestyle was all anyone talked about, Nike's stunning original Air Force 1s had been overshadowed and overlooked by almost everyone—with the exception of a loyal urban following who felt personally dispirited when it was dropped and never stopped hoping for its return. The reason for dropping the Air Force 1 was to make way for bigger and better—the Air Jordan. The press suggested that not everyone at team Nike was sure that the sneaker would sell. When the five-year $2.5 million endorsement deal was made to bring in Michael Jordan—then a rookie first-round draft pick by the Chicago Bulls out of the University of North Carolina—there were out-clauses for the brand in the event that the Air Jordan failed to lift off. In the black and red team colors of the Bulls uniform, the sneaker sold an unbelievable $130 million in its second year on the market, transcending anything ever achieved by a mere athletic shoe before. The Air Jordan had magic in it. Perhaps it was a reflection of the brand that had been named for the Greek goddess of victory or that the sneaker embodied the energy of the Nike swoosh logo drawn to represent her wing. It also stood for the entrepreneurial genius of the brand's creator, Phil Knight, and the gravity-defying ability of an athlete destined to become one of basketball's greatest players of all time.

On top of that, Air Jordans were a cultural departure from the classic NBA uniform look, just as Michael himself was unlike the gold-standard heroes in the mold of Larry Bird and Magic Johnson. Jordan was frequently threatened with being fined for wearing his Nikes on the court because they weren't regulation. As Adam Silver, now the NBA's deputy commissioner, recently reminded me, the rule at the time was that sneakers had to be all one color. The fact that Jordan risked the fine and wore the sneakers anyway—bucking the system—made Air Jordans all the more desirable by mirroring the authentic, unapologetic attitude of the youth generation. This reveals an often overlooked yet pivotal role that Michael Jordan played in tanning. Not only did he have a great-looking sneaker—with a beautiful, new-to-market silhouette—but he embodied hip-hop culture's antiestablishment attitude at the same time that he was a baller who played out of the stratosphere.

Magic Johnson and Larry Bird were undoubtedly adored as athletes. But they didn't convey the same cultural codes as Jordan did, codes that were starting to resonate—the use of one-on-one moves, for example, or wearing a gold chain during dunk contests. Basketball fans who wished they could play like Magic or Bird but didn't have the height found aspiration through Jordan that came from sharing his against-the-grain attitude. With these attributes, he captured the values of the hip-hop cultural creed at a critical moment when a generation was redefining how it saw and experienced the world. If kids were wearing no shoelaces or fat laces, Jordan was in sync with them—by refusing to have his Air Jordans fit the definition of an acceptable NBA sneaker.

And so, by 1990, in spite of Reebok's sponsorship and licensing traction with the NFL and other major league men's sports teams, Nike was back in the lead as the top-selling brand across the boards. In some ways, the Sneaker Wars now resembled a battle of the sexes—with Reebok doing at least 50 percent of their business with women, while males overwhelmingly favored Nike in most categories, none more so than basketball.

Paul Fireman and Phil Knight had never made any pretense of being fond of each other. My impression was that Paul loved going up against the behemoth that was Nike, even if it meant not always winning. Paul's motto was “Nobody holds all the cards at any given time, and that's what makes the game so much fun.” Phil Knight didn't appear to see anything fun about the competition or any reason to have to like his rival. Nike was out not just to win but to crush all contenders for the throne. Phil's guiding philosophies included the saying that it's important to “play by the rules but be ferocious,” and “It's okay to be Goliath but always act like David.”

From the underdog's standpoint, Reebok probably figured that the reverse was just as true. In the role of David in the brand matchup they managed to sign a literal Goliath by the name of Shaquille O'Neal to an endorsement deal that really heated up the Sneaker Wars. Shaq's newness in the NBA—and even the looming question of whether he was ready to go up against the big boys or not—was smartly woven into a “Don't Fake the Funk” commercial campaign. Besides being funny, irreverent, and always comfortable in his off-the-court persona, Shaq gave Reebok credibility in its bid to become more of a hard-core athletic sneaker and in connecting to a younger generation of males. With a language and attitude that was hip-hop-infused, he brought some added cool to the mix in 1993 when his first rap album,
Shaq Diesel
, went platinum, and a year later the follow-up album went gold. Despite Reebok's success with Shaquille, Nike still kept its top-dog status—but with only a little breathing room. A 1995
Fortune
magazine feature about the Sneaker Wars reported, “The company regained the revenue lead from Reebok in 1990, $2.24 billion vs. $2.16 billion.” In 1994 Nike's earnings were $299 million on $3.79 billion while Reebok's numbers were $254 million on $3.28 billion in revenues.
Fortune
noted, “Together the two companies sell more than half the athletic footwear in the U.S. and they control over 40% of the global market. Only Adidas, with about 10% of global sales, remains a significant competitor.” Other indicators had suggested that Nike was overextended and that sales were actually slumping—enough so there was a significant restructuring warranted.

That was basically where things stood around '95 when Paul Fireman decided he needed to free himself up from the day-to-day activities of running the sneaker business to take over the direction of other companies that were in Reebok's expanding portfolio such as Rockport, Boston Whaler, Avia, and a line of footwear designed by Ralph Lauren. In addition to new opportunities in the booming global athletic footwear and apparel business (plus an interest in investing in health and fitness clubs), there was also philanthropy to run and, who knows, a memoir he was thinking about writing. No doubt, Paul had stepped aside with the assurance that younger ideas and hopefully the more culturally attuned leadership he left in place would keep Reebok right at the top.

Five years later, after watching the stock price plummet and the brand lose its former sparkle, Fireman couldn't take it anymore. While he had been on the sidelines, instead of sustaining and building momentum, Reebok had suffered a stunning and thorough reversal of fortunes. By 2000, not only had Nike conquered the global market as well as the U.S. sneaker business, but Adidas was back in action. After almost facing bankruptcy in 1993, they were now Adidas-Salomon (after being merged with a ski gear maker), ranked second globally, and in the U.S. controlled 17 percent of the sneaker business. In short, Adidas had outmaneuvered Reebok on two fronts—in high-performance sports shoes and in delivering style in terms of newness and cool to the young urban/suburban consumer.

In Paul's absence, Reebok's executives had not lived up to the brand's values. On the one hand they hadn't kept in tune with their base of women consumers who had made Reebok a phenomenon and helped it change the industry. On the other hand, like many corporations run by directors that rarely leave the boardroom, the brand had no connection to the one make-or-break consumer segment for marketing sneakers—young adult males and teens, this polyethnic group whose tastes, as we've seen, were now driving urban as well as mainstream culture. There was a paralysis, understandably so, from not wanting to do anything that might turn off the traditional Reebok consumer or hurt the legacy of a global corporation doing $4 billion a year in business with ten thousand employees worldwide. Another issue was that instead of investing in new ideas, research, and development, the company was being run by the numbers—with efforts to save money, for example, by ending deals with inventors and trying to copy designs or retrofit older technologies. No originality, no creativity. That assessment, along with the other concerns, had been enough for Paul to return to his post as CEO and take back the reins—and to come to us.

So the challenge was straightforward: to define a strategic position by which the brand would connect to the lives of young adult males and to increase Reebok's overall profile, product alignment, purchasing consideration, and urgency within the retail environment. Translation? The brand needed more than cosmetic surgery. It needed to be reborn, as Paul Fireman agreed, through a total disruption marketing strategy, different from anything tried before. Paul also agreed with my reasoning for why, as in this case, marketing is sometimes best done in product creation. And finally, because of the background that he had provided us, when I explained the importance of mirrors that we would be using to reflect real lives and consumer cues—along with the intention to employ the velvet rope to bring back aspiration—Paul Fireman was game.

During my initiation into the field of marketing it had been my observation that a lot of the men and women working in creative positions in advertising were frustrated screenwriters. Their interest had nothing to do with solving companies' problems but more with crafting flashy commercials to put on their reels so they could break into the movie business or win awards. Yet I also knew there were younger and/or less conventional creative people who actually wanted to be in marketing and had proximity to pop culture but weren't being tapped. Since I had always seen my role at Translation as keeping us focused on being a solution agency in service of clients, regardless of whether we were doing product development, brand design, strategic insight, or traditional media, those were the creative people I wanted to bring on my team. Whatever the solutions, I was determined to find the way to fix my clients' business concerns. And doing that is the only way, in my view, to say you've been successful.