Slowing growth, or a decline in year over year sales if thatswhat your company is experiencing, was inevitable in skateboarding.Sure, we would rather it didnt happen. But since we all knew it wasgoing to happen, it might as well be sooner rather than later so itsless painful.
What I didnt see in San Diego, happily, was what I saw atthe Vegas snowboard industry show in 1995. Or was it 1996?Whatever. Vegas that year was the biggest snowboard party Ive everseen with lots of hype and lots of new brands. And then thesnowboard consolidation wiped out most of those brands.
Skateboarding doesnt seem to be doing that to itself. Thenumber of brands isnt expanding dramatically. Were resisting, sofar, “net never” dating, and there isnt a Japan around thats goingto yank the financing many companies need to survive as there wasin snowboarding.
Still, this setback has wonderfully focused the mind onsome significant business issues. Here are some of the ones mine isfocused on.
We need less hype. Between network television,Investors Business Daily, The Wall Street Journal, The New YorkTimes, and more bad ads featuring skateboarding than I caneven begin to count, its just too much. Maybe what I mean is weneed the right kind of hype. At least part of skateboardings successhas been its ability to be underground, a little dark and urban, andmaybe somewhat unintelligible in its humor and attitude towardnon-participants. That kind of hypethe kind that makespeople curious about skateboarding is a good thing.
Ill go a step further. The kind of hype we want encouragespeople to skate or learn to skate betternot just to buy a T-shirt. Irecognize that we cant do much about the people who just want tocreate an association between their brand and skating for the sakeof selling a product and dont really give a damn aboutskateboarding. I hope the skate-industry companies will look at alltheir advertisements and promotions through that filterdoes itencourage people to skate? I think that for the most part they do.
Two people I respect have pointed out that the slowing ofskateboard growth may be related to demographics. As they put it,weve got a lot of sixteen-year-old boys who are discovering girlsand cars to the detriment of skating. Weve also got a lot of seven,eight, and nine year olds who are discovering skating, but theirdisposable income is limited and their purchases largely controlledby their parents, who tend to favor spending less rather than moreand buying pricepoint decks. The suggestion is that ourslowdown/decline may be caused by the loss of older kids beforethe younger ones, although they are coming up, are ready to replacethem. In this scenario, everything will be fine in a couple of years.
I havent checked out the census data recently, but if thenumbers bear it out, I can see some validity to this scenario. Thecaveat, and this is where we get back to hype, is that it wont matterhow many kids there are if too many of them think skateboarding islame because of how ubiquitous its become.
Meanwhile, cheap decks from China are happening, andthe quality is getting better. Ive written enough about that and thepotential (probable?) impact in previous articles. Whats the typicalstrategic response in any industry to lower-cost foreigncompetition? Technology and product improvement that cant bematched, at least not immediately.
Of course, the skateboard industry has spent some yearsnow explaining that a seven-ply Canadian maple deck is what askateboard is, and nothing else is a skateboard. Nevertheless, ifyoure a factory making skateboards and you want to compete withChinese labor costs, youd better figure out a better skateboardtechnology that gives you a competitive advantage.
Over at PS Stix, to nobodys surprise, Paul Schmidt hastaken a shot at that. His Featherlight technology results in askateboard he describes as lighter and stronger. It contains a layerof new material that results in a stronger, more consistent pop backwhen you flex it. The new material doesnt go all the way to the tips,and the deck will still wear out.
The good news is it looks just like a traditional skateboard.The bad news is that it looks just like a traditional skateboard. Howdo you sell something nobody can see when they inspect theproduct?
PS Stixs answer is to have a display for the retailer thatshows the cross sections of the deck. An awful lot of people triedthis in snowboarding to differentiate their constructions, and itnever seemed to work. Maybe the differences werent significantenough and maybe there were too many of them. Probably both. PSStix seems to have first-mover advantage on this, and there wont, atleast at first, be 100 guys using cross sections to explain why theirconstruction is better and their decks perform better.
PS Stixs Featherlight deck will sell for about ten percentmore than a traditional deck. Thats what you expect from a productwith a competitive advantage. If it catches on and the volumejustifies the effort, eventually the low-cost producers will figure outhow to make it for less. Then PS Stix and the other manufacturerswill have to move on to another new technology. Sounds to me likeit could be good for the consumer. Oh yeah, I guess thats whatcompetitive pressure is supposed to accomplish.
How do we get notoriously conservative skateboarders toaccept these new technologies as they come along? Weve createdthe form of rock star known as the teamrider. Were more or lessconvinced that what they ride influences what other kids buy. Itspretty clear, then, that we have to get our teamriders to ride deckswith the new technologies.
That shouldnt be so hard. The company says, “Hey, youneed to ride this new technology from now on and love it.” The ridersays, “I dont want to!” The company says, “Do you want to get acheck every month?” The rider says, “Yes!” The company says,”Given the number of blanks being sold and the margin pressurewell be under if this new technology doesnt work out, you wontget that check unless you ride and love this new technology.” Therider suddenly feels love for the new deck welling up in his heart.People with agents should be able to see the business necessity.
Over at the International Coup DEtat SkateboardingExposition, sponsored by Alien Workshop and FoundationSkateboards and supported by others who showed some productand paid for some of the festivities, companies had a good time andgot some business done. Tum Yetos Tod Swank says he spent lesscash than he would have spent exhibiting at ASR and was able tomake, because of the involvement of his and other companies, acontribution of at least 10,000 dollars to the Childrens Museumwhere the event was held. Nice.
Powell, Nixon, and Gravis were upstairs in rooms at theconvention center. Bet they saved a few bucks with no loss ofbusiness. I thought the atmosphere up there was more conducive todoing business than it was on the floor of the show.
Meanwhile, various companies were spending well over100,000 dollars to attend ASR, not counting lost business andmanagement time. Under current business conditions, I think theyhave to look themselves in the mirror and ask, “If I didnt come tothe show or cut my presence way back, would I actually lose muchbusiness?” They might consider spending some or all of the moneythey spend at ASR on other ways of meeting their customers needs.If you havent seen it, you might check out my article (“Trade ShowsAgain”) in the July 2002 issue of TransWorld SNOWboardingBusiness. It suggests an alternative trade-show strategy used bysome snowboard companies that might be appropriate for someskate companies. (If you e-mail me, I can send you a copy.)
Then there was the “secret” meeting called by ASR toaddress issues that the skate companies have with ASR. Im toldabout 25 skate-company heads were invited. I didnt go. Couldntfind the secret room. Dont even know the secret handshake.
The skate companies are unhappy because of the cos
t ofASR and the pressure from ASR to participate in other kinds ofadvertising and promotion as part of the perceived price for gettingthe booth you want in the location you want regardless of how longyouve been coming to the show. They also dont feel its right thatASR pays SIMA a bunch of money to support the show but dont paya dollar to skateboarding now that skate is arguably more importantto the show than surf.
I guess there was also some frustration expressed with thefact that theres no beer allowed in the booth. You know, that onebothers me, tooespecially after waiting in a long line to pay fourdollars for a small beer when I could have gotten a big one for freesomewhere.
I think these concerns are justified, although Im not soworried about the beer as the other issues. Its getting harder andharder to justify the expense of the shows. I imagine ASR recognizesthese issues as being legitimate. But they can justifiably ask, “Who,exactly, should we negotiate with?” Theres no skateboardingequivalent of SIMA, and unless IASC gets more industry support andJim Fitzpatrick is ready to quit his day job, we cant really pointthere.
Theres an old Chinese curse that says, “May you live ininteresting times.” For a lot of reasons, including those discussedabove, this would be a good time for the skateboard industry tocooperate in ways it never has before. The industrys history is suchthat I wont hold my breath. Still, imagine if we could.
Jeff Harbaugh is president of Jeff Harbaugh &Associates. His company works with action-sportscompanies to help manage issues of transition and identifyand bring focus to critical management issues. Reach himat (206) 232-3138 or at email@example.com.