Vans Preparing For 100% Growth

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Photo by Sean O’Brien
Vans owns the rights to the Triple Crown of Surfing — including the most famous surf contest of all, the Pipe Masters.

Much of Vans’ success can be attributed to its agressive expansion of the Vans Skateparks to locations across the United States.
Photo by Sean O’Brien
Jay Wilson

People Get Ready: Vans is preparing for 100-percent growth. Are you?

Posted 10.01.2001
Jay Wilson, vice president of global marketing for Vans, stares across the desk of his small windowless office with the fervor of a born-again minister. “Are you ready for 100-percent growth?” he asks. “There are 78-million kids coming up. Are you ready?”The weight of his conviction is evident — you can almost see the swelling ranks of teenagers crowding the streets around the corporate offices of Vans, hungry for skate shoes, skateparks — anything action-sports related. One on one, it’s hard to argue with Wilson’s belief that the entire action-sports market represents the single biggest opportunity anyone will see in the next ten years.

It’s a heady view — and one not easy to discount. After all, Wilson was one of the people who orchestrated the resurgence of Vans. After nearly fading into irrelevancy, after ownership changes and brand-identity problems, Vans has returned to the forefront of the action-sports market not on the strength of its product, but largely through its marketing-driven event programs.

Vans owns the Triple Crown of Surfing, Skateboarding, Snowboarding, Wakeboarding, Supercross, BMX, and Freestyle Motocross — events that will air coast to coast through a recently announced television deal with NBC. Vans currently operates eight skateparks across the country and runs the High Cascade snowboard camp. It’s the title sponsor of the Warped Tour and produced the critically lauded Dog Town movie. The Vans Air Show has pushed aerial surfing to new heights, and the brand is one of the sponsors of the PSTA tour.

With such a swirl of events and marketing efforts, it’s easy to forget that Vans is still primarily a footwear company, with its revenue model rooted in manufacturing. Since 1995, revenues have grown from 88.1-million dollars to 273.5-million dollars in 2000. The brand operates 131 Vans retail stores, which account for 50 percent of its annual sales in the U.S.

So how did Vans succeed in staying fresh while other brands have faded, what’s the company’s philosophy about growing the market, and are the rumors about a Vans wave pool really true? Wilson sits down with TransWorld SURF Business and explains.

TransWorld SURF Business: Not too long ago, Vans seemed on the verge of irrelevancy. How did you guys turn it around on a marketing level?

Jay Wilson: Five years ago when I arrived at Vans, you had surf companies, skate companies, snowboarding companies, and BMX companies — and none of them ever talked to each other. Vans was the only company involved in BMX, skateboarding, and surf, but we were also floundering around with an image problem.

I saw this as a huge opportunity for the entire industry — especially when you considered the huge demographic boom we’re going to have in the number of teens. I began formulating a “sport building” market strategy.

Each of the action sports overlaps with at least one other sport: surfing with skateboarding, skateboarding with snowboarding, snowboarding with wakeboarding, and so on. For example, there was a 23-percent overflow between surfing and skating, so why were we trying to keep the markets separate when the market was already merging?

Around that time I was approached by ESPN, who wanted Vans to sponsor the X-Games for a couple of million dollars. Then I bumped into Fred Williamson at a trade show and he asked for 50-thousand dollars from Vans to sponsor the Triple Crown of Surfing — which he owned at the time. I told him, “Are you out of your mind? For 50-grand? Of course I will.”

He then laid out his story about how he almost got bought out and how he wanted to sell out and I asked him, “Why don’t you just sell it to me?” He told me the price and we bought it.

That was the beginning. Soon after we bought the Triple Crown of Skateboarding from Fran Richards TransWorld Media and The Hard Rock Cafe.

The point is, how do you protect all these individual sports from the ups and downs and from the way the market works? You do it by building up cruddy little events into world championship showcases, working with the sanctioning bodies and athletes, and then opening these events up to the entire industry. We didn’t have the kind of money it would take to build the Triple Crown up as big as the X-Games on our own. We needed the entire industry involved. Plus, now these sports have an infrastructure they never would’ve achieved on their own.

TransWorld SURF Business: At this point, did the company see itself turning from more of a manufacturing company into a sport’s marketing/entertainment company?

Jay Wilson: We saw ourselves becoming a brand-building company. The newest thing in my business is brand building. What does that mean? I’ll give you an example: you have two cans of paint, one says Levi’s on it and one says Ralph Lauren. Which one are you going to buy?

TransWorld SURF Business: Uh, Ralph Lauren?

Jay Wilson: Right, because its brand stands for quality. So the reality is, what does your brand stand for? What’s the image and how can you expand on that through product extensions like events.

TransWorld SURF Business: So are all these events and deals with NBC changing the way Vans makes money?

Jay Wilson: Well, these events aren’t moneymakers. A lot of people think, “Oh NBC is involved, Vans must be making a lot of money.” But these events cost a lot to put on. Our prize money for all the Triple Crown events alone is more than two-million dollars — that’s more than the X-Games and Gravity Games combined. Some of it is money from the various associations, some of it is our money, some of it is our sponsor’s money.

The Vans revenue model is still based around making shoes, but it’s absolutely worthwhile for us to spend the time, money, and effort to put on the Triple Crown series. There are 78-million kids coming up, and we’re going to be a part of building this market for the future of all the industry. I don’t look at anybody in our industry as a competitor.

TransWorld SURF Business: Come on, you’re pulling my leg.

Jay Wilson: No. Not Etnies, not Quiksilver, not anyone in our market. We need every single one of them healthy, strong, putting out ads, and gathering the new generation. We need them to participate in our sports and not go off to soccer or basketball. We’re the biggest guys in the action-sports footwear industry, so we should act like a leader. We should put our money where our mouth is.

My objective is take another billion away from Nike, and I need everybody to do it. I need Quiksilver. I need Billabong. I need Etnies. As an industry, we need to support each other, promote ourselves, build our image, and bring in the new kids who are coming up. By growing the pie, we all win.

TransWorld SURF Business: Plus, this gives Vans instant credibility by doing partnerships with these other respected brands.

Jay Wilson: Right. It also brings the mainstream guys to the table. After all, who’s going to build a ten-million-dollar infrastructure on events? Quiksilver’s whole marketing budget is ten-million dollars. So we had to go out and get other sponsors who believed in us and who wanted to reach this new generation.

Our industries can’t be so close minded. We can’t have the mind set of, “Well, these guys don’t surf, so what can they teach me?” Take surfing involvement with the skate market. A few years ago it was, “We’re surfers and we don’t trust you.” Now they’re going out and buying skate companies!

In the last five years we shared our plan with everybody, so now you’ve got footwear companies advertising in the surf mags, surf brands advertising in the skate mags, and all the barriers are beginning to fall. Everybody is winning.

TransWorld SURF Business: So will Vans get involved with any other sports?

Jay Wilson: No, at this point we want to explore the opportunities down to the amateur level, and support amateur surfing, snowboarding, and skating. We created some new tours for amateur skateboarding. We’ve always had the Warped Tour and the World Championship, now we’re involved with the PSTA and, of course, our Vans air shows.

TransWorld SURF Business: How do you balance staying relevant to the hardcore market while marketing to the mainstream?

Jay Wilson: We’ll get better and better at it. There will always be points of friction between the hardcore and mainstream, but the market is changing. The same “sport building” model we used inside Vans is happening across the country at the retail level right now. Surf shops are carrying skate shoes. You have skate shops carrying surf and snowboards. A lot of people are saying, “Hey, wait a minute, this works pretty well. It’s the same customer, let’s give them what they want.”

What we know and what the surf companies know is, Quiksilver sells mainstream. Billabong sells mainstream. The trick is to use the money you’re making in the broad channels to support the core of the sport — whether it’s by supporting athletes, sponsoring competitions, or grassroots events.

TransWorld SURF Business: Yet the surf-industry highway is littered with brands who tried to go broad and couldn’t keep the soul of the brand intact.

Jay Wilson: There’s a delicate line you have to watch — yes. If you go big, you run the risk of your brand deteriorating because of overexposure. So you have to do something new.

Hey, our brand is 30 years old, so how come it’s hot again? I think part of the reason is this a result of this model we’ve built. Individual sports will expand and contract in popularity. With our model, however, each of the sports can fluctuate, but overall we’re on a steady growth curve. And when you take these fluctuation to a worldwide level over all the different hemispheres it really begins to balance out. When it’s summer here, it’s winter in South America. If surf falls off here a bit, it’s still super strong in France.

Like Quiksilver, many brands are becoming experts at global marketing — and it will benefit us all in the long run.

So you can see, there’s opportunity here to manage a brand properly, give back, work with your athletes, listen to your audience, and grow the action-sports culture. It all starts by hiring culture-connected people.

TransWorld SURF Business: How do you fight the war for shelf space — especially when there are so many young, small, fresh brands out there?

Jay Wilson: We’re continually looking at our strategy. In some areas our shelf space has diminished in the last five years. In other places, we’ve grown. We’ll open a skatepark and all of the sudden two or three skate shops open with us. For example, in Cleveland 30 to 40 percent of the skaters are wearing Vans.

California is different and it’s very tough. We have 80 stores in California, so how are we going to beat against the local guys for more shelf space here? We don’t have 80 stores in Cleveland — you have to drive 100 miles to get to a Vans store. So in Cleveland, there’s an opportunity to increase our presence at retail. We may never be top two in California board shops, but hopefully we’ll be in the top five. I’m fine with that.

I’ve talked to a million retailers around the country and told them what we’re trying to accomplish to build the entire market. The retailers who own three or five stores and who are doing a 1,000 dollars per square foot in sales a year get it. They understand. They don’t look at us and say, “Oh, you’re mainstream.” What they’ve said is, “How do we team with you guys? Can we get passes to the skateparks for our customers?”

Really, I’m not too worried about shelf space at this point. I’m more worried about getting that billion dollars from Nike.

TransWorld SURF Business: You guys have had success with your skateparks and snowboard camps. Can we expect Vans to do something similar with surfing?

Jay Wilson: That’s tough. We’ve certainly looked into it, but we haven’t formulated a good model that makes sense. I’m sure it’s coming. I’m sure that we’ll do it, but there’s nothing pending at this point.

It certainly makes sense to try, though. The skateparks are bringing in a very young customer — anywhere from four years old to eight on up — who will start in the sport with us and will be loyal customers for all of us. Mall retailers also like our skateparks. We just read a study that at one mall our skateparks retain shoppers far better than the AMC movie theater does.

TransWorld SURF Business: So are you talking about a Vans wave pool attached to a shopping mall?

Jay Wilson: We looked at wave pools, but I think an important part of surfing is being outdoors and out in the water around nature — most of our sports are about that.

TransWorld SURF Business: How would you compare and contrast the surf industry to some of the other industries you deal with?

Jay Wilson: Surfing is a very closed industry that’s just starting to open up. My goal is to have it all work together and to bring new kids to surfing on a worldwide basis. Face it, our industry is small compared to Nike, compared to adidas. We’ve got our work cut out for us, but don’t fool anybody that surfing is bad. Surfing’s doing great. Just open up, be inclusionary, and more open to new ideas.

TransWorld SURF Business: Do you think the surf industry should view the success of skateboarding as a threat?

Jay Wilson: Surfing had an industry that went mainstream and made shitloads of money at a time when the skate industry was very resistant to new ideas — they were even more closed than surfing. Then all of the sudden they looked at surf and went, “Hey, if they can do it, why can’t we?” They started testing the waters and sales shot up like rocket ships.

So surf brands are worried: “Oh my god, what happens if skateboarding comes out to mainstream and cannibalizes all my sales?” So what did surf do? They’re all doing the right thing. They’re just going to buy skate brands. Every sport advances and recedes. Nothing is going to replace surfing. It’s been around for 50 years, so stop worrying. Everything is going to be all right.

TransWorld SURF Business: Are we seeing a paradigm shift away from team sports and toward action sports?

Jay Wilson: What we’re seeing is that not everybody makes the team. All our sports are done outside, you just compete against yourself and hang with your friends. A lot of our surfers and skaters are small. They’re not eight feet tall and they don’t weigh 230 pounds. So we give everyone a chance to play.

I ask retailers all the time, “Are you ready for 100-percent growth?” And they’re scratching their ass like, “What do you mean?” There are 78-million kids coming. That’s double or triple the number we’re seeing now. So, what are you doing about it? And are you looking at the people who are going to support you long term, the people who are going to spend eight-million dollars on advertising, pushing new kids into it? Are you with the company who’s spent hundreds of millions of dollars on skateparks and bringing new kids into the sports?

For the next ten years, the action-sports market will be the greatest opportunity anybody has ever had, so quit your bickering, quit your whining, quit your little, “Oh, I’m this and you’re that.” Focus on the big one: we’re going to take a billion dollars in sales away from Nike and grow all our sports. Ask yourself, “Am I ready for 100-percent growth?”

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