Converse 6 Month Buying Plan

[Alex Greeley, Alyssa Rodemsky, Nicole Guion, Annie Catania]

Table of Contents

1

Company profile & Analysis

2

Competitive Marketplace Analysis

-Mission -Identity -Size -All Star Facts -Values -Profiles -Star Insigna -History -Scope -Customer Base

3

The 6 month buying plan

-Distribution -SWOT Analysis -The Buying Plan -The Future -Collabs & Reasonings

-The Rise of Sneakers -External Trends of the Business Environment -Total Market Size

-key competitors

1 Company profile & Analysis

Mission CONVERSE HAS A CLEAR IMAGE OF WHAT THEY WANT: -THEY WANT THEIR CONSUMER TO DEFINE THEIR OWN JOURNEY. -THEY WANT TO CULTIVATE AND FOSTER A TRIBE THAT CELEBRATES INDIVIDUALITY AND SELF-EXPRESSION. -CUSTOMER STYLE IS THE ONLY STYLE THAT MATTERS. -NO MATTER THE SHOE DESIGN, THEY WANT THEIR BRAND TO MAKE A STATEMENT. -THE STATEMENT IS DEPENDENT UPON THE CUSTOMER. -THEY ARE MEANT TO BE LIVED IN, WORN, AND LOVED.

Values THEIR COMPANY STRUCTURE IS VIEWED THROUGH A CUSTOMER-CENTRIC LENS.

-THEY ARE PROUD OF THEIR SUCCESS, BUT KNOW THEY ARE NOT ENTITLED TO IT. -FAILURE IS VIEWED AS A LESSON, FOR THEY RESPECT THE PAST AND USE IT TO MOVE FORWARD. -HOWEVER, THIS DOES NOT MEAN THEY DON’T PLAY TO WIN. -RICH HERITAGE AND BRAND CONSISTENCY -POWER WORDS: APPROACHABILITY, FREEDOM, AUTHENTIC, LONGEVITY, MULTIFARIOUS

History -Founded in 1908 by Marquis Mills Converse in Malden, Massachusetts -First All Star Athletic shoe created in 1917 -Chuck Taylor, namesake, convinced the company to let him work there as a ambassador and salesman -Converse renamed the shoe after Taylor in 1932 -Official shoe of the 1936 US Olympic Basketball Team, first time debuting the classic white high top design

-Most prominent in pop culture throughout the 1950’s and 60’s, used for EVERY athletic activity -Had a revival in the late 80’s and early 90’s with Kurt Cobain frequenting the shoe -Filed for bankruptcy in 2001 -Nike purchased the brand in 2003 for $305 million -Focused now on the creative expression of the brand as opposed to sporting aspects

History

Identity THREE KEY PLAYERS

Sport: -ATHLETIC DESIGN TO THE SHOE. ORIGINALLY USED FOR BASKETBALL PERFORMANCE, MADE FAMOUS BY CHUCK TAYLOR. -THE MOST FAMOUS SELLING BASKETBALL SHOE IN HISTORY: THE ALL STAR SNEAKER. -THE PHYSICAL CONSTRUCTION IS A COMFORTABLE CANVAS AND RUBBER DUO.

Identity THREE KEY PLAYERS

Street: -THE TIMELESS AND EFFORTLESS DESIGN OF THE BRAND PROMPTS PEOPLE OF ALL BACKGROUNDS, CULTURES, AND INTERESTS TO IMPLEMENT THESE ELEMENTS OF DISPOSITION IN TO THEIR STYLE, WHATEVER THAT MAY BE. -COOL GUY /GAL / AMERICANA VIBES

Identity THREE KEY PLAYERS

creative culture: -MEDIA HAS ENABLED THE BRAND ELEVATION AND REPUTATION. -MADE FAMOUS BY: WILT CHAMBERLAIN, BACK TO THE FUTURE, THE RAMONES, THE OUTSIDERS, HARRY POTTER, STRAIGHT OUTTA COMPTON, STRANGER THINGS, WORKAHOLICS, GREASE, WEST SIDE STORY,BREAKFAST CLUB AND WAYNE’S WORLD. (JUST TO NAME A FEW)

tyler the creator

Miley Cyrus -For Pride Month this past year, Cyrus partnered with Converse to create a collection of 22 limited edition styles -The theme being “YES TO ALL” in support of LGBTQ and Youth -All profits from the collection were donated to The It Gets Better Foundation as well as the Happy Hippie Foundation, founded by Cyrus

-The rapper is currently collaborating with the brand releasing at least 2 pairs set to drop this month -The collection is entitled, Golf Le Fleur, Golf referring to both his own clothing line and his rapper collective, Odd Future or “OFWGKTA”

scope Geographic Reach: Retailers in more than 10 countries, about 85 company-owned retail stores nationwide and half a dozen international retail stores

Sales and Marketing: Footlocker is Converse largest customer.

They account for a fifth of the company’s sales. Converse sells their product to retailers through distributors locally and regionally.

Financial Performance: The company accounted for 6% of Nike’s total revenue in 2016.

Strategy: A key strategy is to build on the culture the sneaker already has. Converse is a top contributor among the Nike’s brands.

Operations: They design, distribute and license the sneaker, apparel and other merchandise under their existing trademarks (Converse, Chuck Taylor, All Star, One Star, Star Chevron)

size Number of Employees- 2,658 (in U.S) [Number of Employees at Nike- 62,600]

star insignia

Customer Base Demographics Age Range: 17-35 Millennials and Gen Z Male and Female

Words to describe the Converse customer: Hip Independent Nostalgic Rebellious Classic

Customer Base Who wears them: Skaters Musicians High schoolers College kids Celebrities Artists Athletes

Customer Base Possible professions: Influencer Self-employed Digital/Web related Retail and Food industry Entry level job at start up company

Customer Base Lifestyle: Reminiscent about the oldies, artistic, style conscious, tech savvy, social media users

Buying behaviors: -Semi-price conscious -Buys for use/purpose/preference over trends -Aware of style trends but not dependent on them

All Star Facts -Chuck Taylor never received a commission -During World War II, american soldiers trained in All-Stars -The Converse All-Star was originally designed for Soccer and netball -There’s a pair of Chuck Taylors purchased every 43 seconds

-The basic design of the Chuck Taylor All-Star hasn’t changed since 1949

2 Competitive Marketplace Analysis

The rise of sneakers: The future of America’s shoe obsession is male Sneakers are a seasonless product; we are in transition all year so why not let out footwear be an easy decision.

While this is a strength for this market it proves to be a challenge for retailers who count on seasonal lines/products to drive sales.

The rise of sneakers: -The desire for style, comfort, and versatility is in high demand. With this in mind, Converse is committed to staying true to the brand and its customers, always evolving and staying one step ahead of their competitors.

-Men’s shoes could soon outsell women’s. Quickly catching up, the surge is heavily influenced by social media, footwear trends of younger generation, and artists.

“

Men in the United States spent about $26.2 billion on shoes last year, up from $23.8 billion in 2014. If that growth continues at its current rate, sales of men’s shoes could top those of women’s, which have hovered near $30 billion in recent years, according to the market research firm NPD Group Inc.

”

bostonglobe.com/business

total market

ANNUAL HOUSEHOLD INCOME OF $125,000 Per Year 45.00% 40.00%

40.30%

35.00% 30.00%

LEADING APPAREL COMPANIES IN US

BY MARKET SHARE %

32.30%

25.00% 20.00% 16.70%

15.00% 10.00%

L.Brands, 2.30% Gap, 4%

5.00% 0.00%

Hanesbrands, 2.50%

0.10% S P E N D N O M O NE Y

U N D E R $ 2 5 0

S P E N D $ 2 50 - $4 99

S P E N D $ 1 5, 00 0

ANNUAL HOUSEHOLD INCOME OF $200,000 PER YEAR 35.00%

Wal-Mart, 3.50%

30.00%

32.60%

Nike, 2.70% 25.00%

https://goo.gl/nCWRt7

20.00% 17.60%

15.00%

In the Spring of 2017: • 79.38 million people bought men’s shoes.

10.00%

5.00% 4.40% 0.00%

S P E N D N O M O NE Y

S P E N D $ 2 50 - $4 99

S P E N D $ 1 ,0 00 - $1 ,9 9 9

https://goo.gl/DZe3xH

Market Segmentation How often sports apparel, shoes, and equipment are purchased Less than once a year

Skechers 14% 21.44%

Once every 3 months

18.70%

Once every month

0.00%

Converse 12%

15.38%

Once every 6 months

More than once a month

Adidas 22%

21.69%

Once every year

SHOE BRAND PREFERENCE BY %

New Balance 19%

13.70% 9.08% 5.00%

10.00%

15.00%

20.00%

25.00%

-This is a survey of how often people buy sports apparel, shoes and equipment in 2016 -1,237 people, respondents 18-69 ofage who buy sportswear and are interested in brands https://goo.gl/wDJErB

Nike 33%

-Sports shoe company preference in 2016.

-Survey of 1,216 people from ages 18-69 who buy sporting goods and are interested in buying popular brands https://goo.gl/Q4UkC6

Market Segmentation

Brand Prefernce for Men's Athletic Shoes Asics

3.70% 2%

Champion

1.50% 2.90%

Under Armour Converse 361

4.30% 3.20% 2% 3.40%

New Balance Jordan

Men’s Athletic Shoe Brand Rreference:

5.10% 3.20%

6.60% 2.70%

Blue Line: African American Respondents

11.40%

13.20% 23.60% 24.40%

Adidas 20%

Nike 0.00%

5.00%

10.00%

15.00%

Non-African American Respondents

26.40%

20.00%

25.00%

30.00%

African Americans Respondents

Black Line: Non-African American respondents

https://goo.gl/jPPx3X

Sporting Goods Brand Awareness 61%

Company

Sketchers Converse

64%

Under Armour

64% 68.00%

New Balance

74.00%

Puma

76%

Reebok

87.00%

Adidas

93.00%

Nike 0.00%

64% of men were aware of the Converse brand in 2014, compared to the 93% who knew of Nike or 87% who knew of Adidas.

20.00%

40.00%

60.00%

80.00%

100.00%

Percent of Brand Awareness Series1

https://goo.gl/5nWtbL

External Trends of the Business Environment I. True Directional Marketing: -Cause Messaging -Mind Stimulation II. Customer Engagement: Artificial Intelligence III. Cultural Relevance: -Reverse Engineering Collaboration -Product Development / Sustainability Patched

Trend #1 True Directional Marketing: Cause Messaging We are so excited and grateful to have been, and continue to be trailblazers of inclusivity for athletes, creatives, and badasses alike. We are enablers‌ encouraging our customers to live life, their way. In 2018, we will continue and build upon the mission of placing the cause of our brand at the heart of our marketing messaging and media deliverables.

True Directional Marketing: Cause Messaging Forever Chuck Ad Campaign: 100 years of symbolic youth culture We are showing our customer the character of Converse through modern day creators. These are ambassadors who love the brand, love the product, and want to celebrate the longevity of what it means to be Forever Chuck. https://www.youtube.com/watch?v=CVKXmwGM-1A

True Directional Marketing: Mind Stimulation We recognize that our customer is a creative soul that values and enjoys qualitative advertising. Our customer responds to experiential cinematography, unique styling, and evoking of the senses. As buyers and marketers, we will continue to consider this fact, and apply such tactics to our allocation of budget.

Forever Chuck

https://www.youtube.com/watch?v=NHFjTjxXqqM

Trend #2 Customer Engagement: Artificial Intelligence Our mission & application of A.I. to Converse is to not only understand how our customers think, but also how to build intelligent self-run technological entities that can seamlessly operate alongside our employees and offer product to the retail environment and marketplace.

Customer Engagement: Artificial Intelligence • Our vision for this application of this trend is to changing the retail experience • Goal= Drive customers into our stores>Meet & Greet With Forever Chuck Ambassadors • A self customization process to our in-store “Machines with Minds” for people of all ages to enjoy.

Customers will be able to choose their stitching, color, size, and style of canvas and watch the machines go to work on the beginning stages of their initial shoe before it goes off to be assembled and packaged Necessary components of this form of A.I.: -Computer vision to perceive objects, space, and volume requests -Robotics to manipulate objects and move about within a confined space

Trend #3 Cultural Relevance: Reverse Engineering Collaboration We have understood the strength of design within our Chuck Taylor sneaker over decades of success, and have adapted relevance throughout the years to the surrounding culture and what our customers enjoy.

Instead of changing our design to fit aninfluence, we adapt influence to fit our design.

Such collaborations include: -Nintendo, July 2011 -The Simpsons, June 2013 -Comme des Garรงons, June 2015 -Andy Warhol, June 2015 -Miley Cyrus 2017 -Tyler the Creator 2018 -Vince Staples 2018

Cultural Relevance: Product Development / Sustainability Patched A sustainability initiative to reinvent and integrate the different journeys and life experiences that all Converse lovers have had across the globe. Every owner and pair of shoes has a story. The donated shoes will be upcycled into a new exclusive collection called: Just One.

Cultural Relevance: Product Development / Sustainability Patched Just One When a customer donates a pair of old high/low top Chucks, they will receive a $20 credit toward a new pair of Chucks. Upon donation, the customer will tell us how they live their life in Chucks and that information will be entered into a database. We imagine a story-based collection that offers unique, one of a kind, and never been-done-before Chucks that can connect us all to be, Just One.

key competitors:

REEBOOK: -Founded in 1979 in Canton, MA -9,102 employees -Subsidiary of Adidas -Purpose: To inspire people everywhere to be their absolute best-physically, mentally, and socially -Offer extensive lifestyle selection as well as athletic selection -Brand valued at 1.2 billion

REEBOOK: Where Do They Beat Us? -They have a more athletic focus on a majority of their sneakers, but continue to have a fast selection of lifestyle shoes as well Where Do We Beat Them?

-Longer company history -More recognizable signature sneaker

ADIDAS: -Founded in 1949 in Herzogenaurach, Germany -62,000 employees -Purpose: We are innovation and design leaders who seek to help athletes of all skill levels achieve peak performance with every product we bring to market -Owns brands including: Reebok, TaylorMade and Runtastic -Brand valued at 7.9 billion

ADIDAS: Where Do They Beat Us? -Scope, Size and Sales are all significantly greater -Brand Awareness, especially in relation to European sports,soccer being the most recognizable Where Do We Beat Them?

-Greater history -Larger relationship with American sports

vans: -Founded in 1966 in Anaheim, CA, currently headquarter in Costa Mesa, CA -“Off the Wall” is the signature slogan -Subsidiary of VF Corporation -Purpose: To embody and represent the creativity and self expression at the core of action sports and youth culture -Shoes are still created with the purpose of being used for skateboarding, but have shifted to a large focus on the “youth culture” aspect of the brand -Brand valued at approximately 3 billion

vans: Where Do They Beat Us? -Have a very strong brand identification that has held true for over 50 years, especially within skateboarding -Currently valued at almost 1 billion more than Converse -Classic Slip-on and High Top style have wider width

Where Do We Beat Them?

-Stigma surrounding Vans that they should only be used for skateboarding, Converse is multi-faceted -Classic Low Top and High Top style have narrower width

3 The 6 month buying plan

swot analysis

Strengths • Diverse clientele • Long, meaningful history • Untapered, multi-faceted design • Strong collaborative efforts • Competitive price points • World-wide recognition • Unisex styles available • Vast range of sizes available • Loyal customer base

weaknesses • Narrow fit design • Multiple competitors • Oversaturated in niche markets • Limited to current,involved Converse customers

Opportunities • Expand the skateboard styles • Grow in technological advancements • Expand collaboration efforts further to reach different markets • Expand on the “Just One” idea

threats • Competitors gaining market advantage • Lack of versatility could infringe on the ability to grow • Too many collaborations could prevent ultimate goal of maximum profit

The Buying Plan

converse Planned sales FW 2018 = 38.5 million 6% increase Last year sales = 28.8 million Turn of 2.91 (Round up to 3) 7.6 million in reductions (MarkDowns+PROMOS)

Top Products: chuck taylor Low Top White

High Top White

Low Top Black

High Top Black

Low Top Red

High Top Red

Collabs & Reasonings:

“

As a brand, Converse owes a lot to music.

We wanted to give something back to the next generation of musicians and artists.

- Jed Lewis, Converse Global Music Marketing Director

�

Jaden Smith: An American rapper, actor, singer and songwriter Jaden is the face of youth independence, as he received emancipation at the age of 15 as a birthday present. He has successfully branded his individuality and expressed it through music, strong social opinion, film, spring water company and a fashion line.

Why we chose Jaden: He is a fearless individual that chases dreams and encompasses what it means to be Forever Chuck.

Greta Van Fleet: An American hard rock blues band that represents the historical relationship Converse has had with musicians, through current popularity. The unique pairing of this group supports the lifestyle and grit necessary to endure late nights and thrive on stage all at the utilization of the durable design of Chuck Taylor.

Why we chose GVF: There is a magnetism between Rock & Roll/Converse which has always existed, but can be revitalized. GVF is the emerging iconic identity we want to pair with a new launch in 2018, because of their authentic nature and shock appeal that deserves to be celebrated.

Frank Ocean: An American independent hip hop connoisseur that is noted for his signature idiosyncratic sound that has moved audiences since the early 2000s. He is one of the main contributors to the collective Los Angeles hip hop group, Odd Future, that has a wide reach of fans that range from creative artists, music and media celebrities and social influences.

Why we chose Frank Ocean: The essence and confidence he carries within this pioneer-like disposition has shifted the music industry. The level of intricacy Frank Ocean places on his work has moved individuals of all sexual orientations to admire his crafted sound and the influence it has.

Sales Distribution for Total Period 28%

22%

15% 13% 11%

AUG

SEPT

11%

OCT

NOV

DEC

JAN

All Stores- Style Distribution All Stores - Style Distribution

5%

2%

Chuck Taylor Low Top

6%

Chuck Taylor High Top

4% 5%

40%

Chuck 70 Jack Purcell Classic's One Star

38%

Forever Chuck - Jaden Smith New collection: Just One

Chuck Taylor - High Top - Core Colors chuck taylor-high top-core colors 15%

Black 30%

White

10%

Red 15%

Navy 30%

Charcoal

High Top - Fashion Colors chuck Chuck Taylor taylor-high top-fashion colors Tan/Natural 18%

20%

Pink

Light Blue 18%

15%

Light Yellow

Frank Ocean (artist) 12%

17%

Greta Van Fleet (band)

Chuck Taylor - Low Top - Core Colors

Chuck taylor-low top-core colors Charcoal 15%

Black Black 30%

White

Navy 10%

Red Red 15%

Navy White 30%

Charcoal

Chuck Taylor - Low Top - Fashion Colors Chuck taylor-low top-fashion colors Tan/Natural 18%

20%

Pink Light Blue 18%

15%

Light Yellow

12%

17%

Frank Ocean (artist) Greta Van Fleet (band)

Forever Chuck - Jaden Smith forever chuck-jaden smith

Purcell Classic jackJack purcell classic

High Top color 1 15%

20%

High Top color 2

High Top color 3

15% 15%

20%

white Low Top color 1

Low top color 2 15%

Low Top color 3

Chuck 70 Core Colors

chuck 70 core colors

25%

25%

Low top Parchment

Low top Black

Low top White 50%

black

BIG - UNITS bigVS. SMALL vs. small STORE store-units

BOSTON - 1 9 0 , 1 1 9

SANTA MONI C A - 6 6 , 7 9 9

BIG VS. SMALL $ RECEIPTS big vs. smallSTORE store-$-receipts

B O S T O N - $ 1 1 , 2 3 1, 38 9

S A N T A M O N I C A - $ 3 , 9 4 6 ,1 64

Santa monica vs boston Converse only has four Ink Star stores. Due to this, we are not segmenting based off of demographics, instead we are offering a unified product mix with differences in quantity depending on the store size.

What are we bringing to the table?

We are emphasizing Forever Chuck as an investment-worthy running advertisement to carry into F/W. Through our allocation of budget, our buying decision invests in the influencers who make up Forever Chuck.

We are using a two-lane approach toward financial gain through our consideration and implementation of our buying plan into a marketing conscious calendar.

Sources: https://www.kickz.com/2015converse-all-star-origin https://www.sneakerfreaker.com/articles http://www.bbc.com/culture/-art-on-canvas-converse-shoes https://www.wsj.com/articles https://youtube http://www.breakcontent.com/converse http://www.vault.com/company-profiles http://www.complex.com/sneakers/2013 http://www.xxlmag.com/lifestyle/2018/tyler-the-creator https://www.billboard.com/articles http://wwd.com/accessories-news/footwear https://www.google.com/culturalinstitute http://www.stoleninspiration.com https://140charactersatmother.tumblr.com https://www.instagram.com http://hypebeast.com/2016/reebok-club https://www.nssmag.com/fashion/yes-to-all-miley-cyrus https://www.intelligencemagazine.com/converse-celebrates-vince-staples http://4.bp.blogspot.com https://n.nordstrommedia.com/store/product https://www.kicksusa.com https://hypb.imgix.net/image/2014/the-simpsons-conversehttps://news.artnet.com https://www.converse.com https://www.vans.com http://www.reebok.com/ https://mms.businesswire.com/media/2013 https://www.google.com/maps https://jasonrmsmith.files.wordpress.com/2012 https://0.soompi.io/wp-content/uploads/2017/jaden-smith.jpg https://s.yimg.com/ny http://assets.blabbermouth.net/media/gretavanfleet2017 https://www.highsnobiety.com/2017 https://static.highsnobiety.com/2017 https://static.highsnobiety.com/2017 https://static1.squarespace.com https://en.wikipedia.org/wiki/Frank_Ocean https://en.wikipedia.org//Greta_Van_Fleet https://en.wikipedia.org/Jaden_Smith http://www.thefader.com/2015