Stalking The Youth Market

None dare call them sneakers. Sneakers is the kind of completely uncool word that parents use when they just refuse to understand. Little kids wear sneakers. Today's teenager wears what the trade calls "athletic shoes" or "fashion/casual footwear"--terms that you can stick a $150 price tag on. They are expressions of lifestyle. Tokens.

Nike understands this better than anyone. The Oregon-based company sold $1.7 billion worth of shoes and apparel last year, much of that scooped from the $56 billion teens spend annually. Nike is so good at getting kids to lust after their shoes--with sly, witty campaigns and popular pitchmen like basketball star Michael Jordan--that it has even been accused of exploiting them. So let's take a look at the launch of a new Nike line, sort of a case study. As we'll see it's still far from an exact science. And a misstep can cost millions.

Nike is tough, but not omnipotent: it doesn't dominate every market. Some 80 percent of the company's sales are for men. How, then, to match Nike's successful track record with girls? Women bought roughly $200 million worth of Nike athletic shoes last year, but when it came to the lucrative-but-risky market for so-called fashion shoes, the ladies turned to companies like Reebok. (Annual sales: $1.8 billion.) Nike knew that taking a share of the fashion/casual market would be an uphill run--but an essential one.

From the beginning, the company took risks. Nike formed a team to design shoes that looked good and stood up to Nike's standards--in the words of Deb Johnson, who now heads up the effort, to come up with shoes that "look good and you can work out in as well." The company's designers went wild. The dozen styles ranged from the deck shoe type to unnervingly unfamiliar slip-one that might go well with a spacesuit. Then the company took an even bigger risk: the new shoes shouldn't carry the Nike label. Using it would mean instant name recognition, but there was a danger. "Nike appreciates having a word mean something to the consumer," says analyst Heidi Steinberg of Salomon Brothers. "Nike means performance." The toughest workout these new shoes were intended for is walking the mall. Nike feared stretching the Nike name too far. Solution: Side 1, as in the hit side of a record.

Of course, Nike did not throw caution completely to the wind. The company buried itself in market studies, as any big company does before launching a new venture. Along with its own research teams, Nike relies on other firms. Some, like Rand Youth Poll and Teen Research Unlimited, tell them how much cash burns a hole in a 13- to 15-year-old girl's purse each week ($33.95) and that she is most likely to spend it on clothing. (Boys at that age have about three bucks less and buy snacks first.) This time-honored quantitative approach is popular, usually reliable--but no more profound than the average teen's exasperated dad. Market expert Lester Rand, for example, has this startling observation: "Teen girls are far greater impulse buyers than young men, visit stores more often, are more socially involved, have less sales resistance (especially when it comes to sales), and have a high-fashion and fad consciousness, all of which contribute to their spending propensity."

Companies that want a little more subtlety and insight to go with all those numbers turn to somebody like Irma Zandl, head of New York-based Xtreme Inc. She makes her money--and stakes her reputation--on 1,000 teenage guinea pigs, whom she studies with polls and "focus group" bull sessions. Zandl hangs out with the in crowd and lets corporate America, in on what she learns. She treats teens as some market research firms see ethnic groups: as a different culture whose nuances must be understood, at least in part, on their own terms. Zandl says: "Most adults aren't around kids much. They're a lot smarter than most adults ever want to give them credit for."

Nike was now ready to work up its advertising campaign. Nike's ads often startle--film director Spike Lee's team-up with Michael Jordan is a milestone of quirkiness. For Side 1, Nike decided to keep the startle but to change the tone. Enter the agency of Weiden and Kennedy, a Nike favorite. Geoff McGann, the writer for the ads, set the target buyer as "a woman with an attitude . . . somebody who's confident enough maybe to do something a little risque, but by no means sleazy." In less global terms, that means the sort of teen who is willing to take a chance on a shoe that her friends haven't bought yet.

The agency came up with ads that were startling precisely because they weren't splashy. W&K chose director David Fincher, whose work includes Madonna videos. The 30-second commercials had lugubrious pacing, with rich colors and no dialogue--"a kind of European, hip feel," says Side 1 art director Susan Hoffman. What words there are in the commercials appear as text on the screen and are ambiguous and somewhat titillating: a frame reads "Ben wasn't being gentlemanly," after an insulted young lady turns on her fashionable heel and walks quickly away. Ben slumps against the wall with a stupefied, "Whaaat did I say?" expression on his face. The audience can't help but wonder, either. "Everything's left up in the air a little," says Hoffman.

Once the ads were made, there was one obvious place to show them: MTV, the 24-hour televised mall. The forum for music videos created in part by media wunderkind Robert Pittman (box) reaches, by its estimate, 20 million people each week--mostly 11- to 24-year-olds--and has become the ad venue of choice for anyone trying to break into the teen market.

The print-ad campaign, also by W&K, features the shoes and the slogan: "Shoes for Situations." Nike spread them out over a wide range of publications that appeal to the teenage girls' market, including Seventeen, Mademoiselle and Wile. Of all the magazines, there is one essential buy: Sassy. Others, like Seventeen, might be bigger, but Sassy is hotter, growing by 100,000 readers last year alone. Publisher Bobbie Helfin attributes her magazine's success to the "candid, frank, honest, personal, best-friend style." The magazine boasted a paid circulation of 450,0D0 last year, yet received 461,944 letters--more than one per person.

By fall 1989, shoes hit the stores, the ads went out over the airwaves and into the magazines, and the Nike sales force awaited the stampede. There's only one problem with this beautifully conceived campaign: it's not working yet. Side 1 isn't selling. The label-conscious market was apparently unwilling to take the fashion risk of a new brand. So Nike, a company that has shown that it has the patience to wait for success, has gone back to the drawing board with a narrower line of shoes and a new ad campaign that should begin airing this fall--still a Nike secret. "We're real optimistic," says Side 1's Johnson. "We've got to get the formula right." For all the talk of formulas, the Side 1 story so far shows that for all the market experts do know, this is still not an exact science. So the American teen can't be taken apart like a watch. Whew.

Girls go for makeup;

boys spend more on


Boys                  Spending

                      per week

Food, snacks          $ 10.10

Clothing                $6.19

Entertainment           $4.35

Records/tapes           $1.55

Grooming                $1.10

Girls                 Spending

                      per week

Clothing               $10.65

Food, snacks            $6.50

Entertainment           $3.45

Cosmetics               $3.35

Records/tapes           $1.80