Getting Skecherized

Marketers at Skechers USA have pretty lofty goals of trying to "skecherize" the world. (A skecher is a "wildly energetic person who is always looking for the latest rage.") But the seven-year-old shoe manufacturer has come a long way in a short time, from a start-up in 1992 to becoming a public company in June. The company has excelled by targeting a core market of 12- to 24-year-olds -- the customers who are setting fashion trends -- with a heavy artillery of P-O-P in an attempt, as one executive says, to "P-O-P the world." By maintaining an unusually strong in-store presence, Skechers has become a household word within the youth culture and a powerful force in the footwear industry ($372 million in sales) with distribution in 110 countries and territories around the world.A Storied PastIn 1992, Robert Greenberg, chairman, and Michael Greenberg, president, envisioned a lifestyle footwear company for the 1990s. With a history in the footwear industry -- Robert founded the athletic shoe company L.A. Gear in the 1980s -- the father and son duo created the new company.The Manhattan Beach, Calif.-based company shipped its first shoe that same year. "We started out with a sport utility workboot and from there the company has grown," says Kelly O'Connor, director of public relations. "Originally we had one line of shoes built around that one boot, which is the sport utility line of footwear that has now evolved into Skechers basics." The Skechers Sport line was then introduced in 1996, which is the athletic-inspired shoe, followed by Skechers Collection (Fall '98) and most recently, Skechers Sity (Fall '99). The company's full product line now includes sneakers, sandals, slides, club shoes, boots and casual dress shoes for men, women and children.Today the company boasts approximately 600 employees, including those in the corporate office as well as distribution centers, the salesforce and retail store employees. Skechers' shoes can be found in independently owned stores, footwear chains, sporting goods stores, department stores and Skechers' 38 company stores, including one in New York's Time Square.Making Strides with P-O-PBecause the company is constantly searching for the latest trend, new products are introduced on a continuous basis, rather than by season.With its wide distribution and myriad pieces of both permanent and temporary P-O-P, it is unusual to walk into a store that sells shoes today and not see the Skechers name displayed prominently. "We have very strict budgets," says Scott Greenberg, vice president, visual merchandising. "But the company is growing and that defends the P-O-P budget. The people that count, the hierarchy, are P-O-P-oriented." The team that is responsible for every keychain to floor display that carries the Skechers name includes Greenberg; Sheryl Goldfeder, sourcing director; Paulien Holtegaard, creative; and Shannon Evans, visual merchandising coordinator."Our customers are always looking for something new," says O'Connor. "We are constantly producing new shoes and redefining our image and the P-O-P has to mirror that, especially because we are marketing to a fast and fresh lifestyle."The visual merchandising department categorizes its P-O-P into three types: dedicated (for a certain store or chain); general stock (floorstands, countercards, etc., that are created, produced and distributed from a distribution center and can be sent out whenever a retailer requests); and field-service exclusive, which often gives Skechers' field service reps the edge to get in a door. "An account may contact us for a certain piece and we'll agree, but only if we can put it up," says Greenberg. "Once the field service rep goes in, they'll install that piece, but they're going to put a whole bunch of other stuff up at the same time. One-third of their job is to P-O-P the world."P-O-P's OriginsWhether the direction for a new display or program comes from the chairman or the product development team, Greenberg says he calls in his favored suppliers early in the process. "Fifty percent of our ideas come from our manufacturers and the other fifty percent from our department. Manufacturers in the P-O-P industry love to bring us ideas," he says. Those P-O-P producers and suppliers include: United Displaycraft, Des Plaines, Ill.; Cormark, Rosemont, Ill.; Benchmarc, Vernon Hills, Ill.; Abbey Manufacturing, Chicago; CDA Industries Inc., Toronto; Small Wonder Inflatables, El Cajon, Calif; Hippo Display, Anaheim, Calif.; Phoenix Display, West Deptford, N.J.; Mila Displays Inc., Hewlett, N.Y.; Mirro Products Co., High Point, N.C.; Pratt Corp., Indianapolis; and Nashville Display Manufacturing Co., Nashville, Tenn.The relationships Greenberg has fostered with his manufacturers have proven to be very valuable in keeping up with the latest trends in materials and manufacturing processes. For example, he notes, "I get all my acrylic samples from CDA Industries, an acrylic manufacturer. They make 4 by 8 sheets, but there is no way we want those landing here, so they advise us on who we should work with and what different capabilities they have. The minute they come out with something new, we get a box of it."Greenberg says he has an open-door policy for any manufacturers who want to show him their work, and sometimes will approach them. "Before the introduction of the Sity line, I gathered my samples and went out to certain suppliers, some of whom were new and were trying to get in the door. I said, 'Here's a lead, no one's on it yet so everyone has an equal chance.' In some cases, I told them some of the components that I was looking at, but some I gave no idea. Sometimes I'll drop a hint of which direction to take, but I try to be very low key because otherwise I plant a seed in the designer's head. I would rather tell a designer what we believe the line will be as a lifestyle and have him do what he does best."To keep their creative juices flowing, Greenberg and his team get ideas from a number of different sources ranging from the local AM/PM convenience store to a high-end furniture store in Europe. "We're travelling all around the world and to trade shows, packaging shows and materials shows to come up with different ideas. If we find something cool in the market, we'll bring it in and figure out how we can translate it for our purposes or sometimes we'll send it out to a supplier and they just start making things with it and then send us samples," says Greenberg.Just as the company's shoe designers rely on employees to test each new shoe design for comfort and durability by walking around in them for a day or two (or even taking a new kids' style home to their children), the visual merchandising department likes feedback from fellow employees. Greenberg says that his former office location was ideal because it was right near the kitchen. "Any of the 200 people down here had to come by my office each day sooner or later," he says. "When I had a new sample, I would put it out so they had to walk around it to get to the kitchen. The comments were incredible -- I lived and breathed waiting for them. If something received no comments," he says, "I would be dumb to pursue it, but I would keep the ones they liked."The sales and marketing department provides feedback as well. "I probably cycle through the whole salesforce in a given week. I try very hard not to be the final decision. Our first runs are always minimal, and if we get positive feedback, it goes back up for reconsideration as a general stock or larger reorder. With each reorder, we are constantly making improvements as well."The department also does informal random phone surveys to measure the P-O-P's effectiveness once it hits the stores. "We have question sheets that are updated all the time," says Greenberg. "We'll call and briefly talk to the manager and tell him we're asking about the newest P-O-P and how it is working. Then we ask if there is anything else they need and they always do, so we'll ship it out."The Logistics of DistributionAfter the creative process is complete, Greenberg says the second, and equally important, half of his job involves distributing the P-O-P. "Distribution is just as important as creation, otherwise I would be warehousing it -- and no one should be warehousing P-O-P," he says. "Before a production run is complete on an item, if we are working at 100% of perfection, the P-O-P will come into the distribution center and the orders for that item will be waiting. If 1,000 pieces are shipped in and we have 880 orders already, the run gets unloaded at one end, gets tagged and goes back out the other end and the leftovers are reserved for trade shows. This process is more cost-effective than drop-shipping continuously. We always want to maintain a fresh supply of general stock for when retailers call."

Getting Skecherized

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