Vans' Vice President, General Manager, North America Doug Palladini Breaks Down The Business Strategy Behind the 2014 US Open
With Vans entering its second year as title sponsor of The US Open of Surfing, we had a chance to get a tour of the venue and hear more about the event from Vans Vice President, General Manager, North America Doug Palladini.
How significant of an investment is this for Vans compared to your overall marketing budget?
It's not as much of a budget issue as it is a man-power issue. We have a very DIY brand culture. We don't have a bunch of agencies working for us that could come do an activation. When we commit to do something like this, it's us. It's the people who work full-time at Vans who come out here. We have literally the majority of our office down here working every day. We have our retail staff in the store. We have our webcast crew working on webcasts, we have our brand people working on the brand stuff. So it takes a huge personal investment from our team to make something like this happen.
We want to bring our brand to life on the beach, that means we have to do it ourselves. So that's really what the investment is about. It's the time and the energy. You're planning for an event like this 12 months out of the year. This is not a summer activity. The scale of this dictates that you're working on it year-round.
So it's not just "put up banners" and let IMG [event owner and producer] run everything else?
It could be. And for some of the event sponsors I'm sure that's how they look at it. But not us. We wouldn't do something like this if we didn't get to be deeply embedded. So at the end of the day IMG owns the event, but to their credit, they've given us the creative space to build what we want to build here. James [IMG Senior VP James Leitz] has given our team all the license in the world to help make our vision of the US Open what it should be for us. Which is great. It's really, really cool to have it that way. It's not plug and play.
Now when it's about the guts of the event, and it comes to the structures, the security, the scaffolding, the bleachers, the signage, all that stuff, it's great to have IMG's support. But at the end of the day, the only way to yield the results and get the return that we want to get on this event is through our own sweat equity. That's where the partnership really begins to make sense for us.
What are some of the standout learnings from last year's event that you've applied to this year?
There's a huge difference from last year. Go back and look at an aerial view of that set-up and compare it to this year. You'll see that it's like the street sweeper came through. There's been a cleanse. The approach this year for both Vans and IMG has been to return to our action sports roots and really make surfing, skateboarding, and BMX the focus of what we do here. So we've cleared out a lot of the ancillary activations, and you physically see that when you walk around. It's a lot cleaner. And I think that's an important reset for us.
What happened in town after the event was over last year was really unfortunate, but it was also a good wake up call. It was a good opportunity for us to really reset what The US Open should be. It's gone through these peaks and valleys, where it ratchets up to being 4,000 different things and then it comes back down to being first and foremost an action sports event. So we want to level that out now, make action sports the core focus of what happens here, then selectively add in some other key values.
How does this event fit into Vans' overall brand strategy?
First and foremost, one of the mantras that we have at Vans is "Defend and Extend." We're trying to create that balance between defending our own backyard and being a global brand.
The other thing that I think strategically is super, super important about the US Open to us is that for the vast majority of our almost 50 years in business we've been a footwear brand. We've been trying very, very hard to be an apparel and accessories brand as well. Not a footwear brand that makes apparel, but truly an apparel and accessories brand in addition to being a footwear brand. This is a great platform for that. It's so merch driven. The hats and T-shirts and sandals that go onto people's backs and onto people's feet here help drive that message. That we can be more than just a footwear brand. People wear that stuff all year round. It reminds them, "oh yeah, Vans makes more than just shoes."
That's super important here where we have our most loyal and longest following. The people here are the ones who have been wearing Vans their entire lives. And for us, that's the hardest thing to crack, because that's where we're most known as a footwear brand. Having the platform here to get more T-shirts and hats out there helps change people's perception of what Vans can be. That's an important part of our strategy. That's why we invest this much time and energy, and money, into the US Open.
Can you explain how your partnership with IMG extends beyond the US Open, especially in terms of content distribution?
We made a fundamental shift to our marketing strategy several years ago to become more of a story-telling brand than an advertising brand. That's where Off The Wall TV came from. We've been generating a lot of our own content and building a lot of our own platforms to do that, and creating more of a direct connection between our brand and our audience because we have the fan base and the muscle to do that. Our deal with IMG on content distribution is just an extension of that. The more content we generate, the more of an opportunity we have to share that everywhere in the world.
When you look at 10 years ago, the vast majority of our business still came from California. Today we're sold in over 170 countries around the world. We have a huge business in China that wasn't there 5 years ago. So we have a responsibility to build platforms to tell those stories around the world. And IMG has the legs, the tentacles, to get out there and help us do that. It's great. All of the content we generate here: webisodes, television, webcasts, social media, all that. They help us extend that all over the world. When you get out of our Southern California bubble, the more hunger there is and less availability there is for that kind of content. So we want to make sure that our business is all over the world. And our fans, and potential fans, have an opportunity to see that content, just as much as the people who see it here every day.
How do you gauge the success of an event like this?
Sales is kind of the obvious benefit. I would say that's also a very short-term benefit. We're looking at that daily as a part of our business. But that said, we're doing this for very long-term reasons. We're not trying to build brand awareness at this point, we're trying to build brand loyalty. And things like this represent our opportunity to build loyalty with fans. Not just have consumers, but fans of our brand.
We look at the short, the mid-term, and the long-term implications of an event like this. And it checks all three boxes for us. We get the short-term benefit of selling all the stuff out of there [Vans on-site retail store]. Go up the street and talk to Jack's and HSS about how much Vans stuff they're selling right now. It's quite good on a day-to-day basis. Mid-term, year-over-year, you start to really build equity. Defend our backyard. And then long-term, we seek to be a permanent leader in action sports. You can't rest on that stuff. You can't just say “hey, we're the number one footwear brand in the action sports space it's all good. High five. Let's go home." It puts you in a different position where you're fighting to maintain that every day. And so this is part of our effort to never rest on our laurels. We need to always be aware of how important it is to defend our space right here outside of our building.
What specific goal do you have for the US Open this year?
The specific goal this year is to recast the event. From the moment we bought in last year, we've been trying to deliver the message that this is a family event. That when you're here you're part of our family. Vans is a family brand. That's really what this is about. We want to kind of set aside some of the things that have happened in the past and really focus on welcoming kids, having parents feel good about their kids being here, having parents feel good about being here. So we have to restart that initiative every time we come down here. Putting the emphasis back on surfing, back on skating, back on BMX allows us to do that.