The Tanning of America (26 page)

Even before any of this rolled out, I had thrown a private viewing of the RBK line for Foot Locker buyers and other retailers to place their orders. Instead of a hotel ballroom or retail setting, I used the conference room at Universal Music's New York City offices and set up displays of the shoes mounted on pedestals in between gold and platinum records. For these buyers who were used to the conventional trade show booths—seen one, seen 'em all—the cultural immersion in the music business was like nothing anyone had experienced before. It was flying to the moon. The conclusion wasn't just that RBK had resurrected Reebok but that by taking on elements of music marketing, it was elevating the whole sneaker business with it.

With all the advance work, when the new line landed in stores, it was like the arrival of a much anticipated blockbuster movie. Throughout urban America, on billboards near basketball courts and on buses and inside subways, RBK beckoned. Now that we had set the stage with mirrors connecting the real lives of consumers with authentic brand values, it was time to bring in the velvet rope—literally. For anyone who has ever lined up on the “by invitation only” side of a velvet rope, whether standing on the red carpet of a Broadway opening or a limited run of a special museum exhibit or waiting in line just hoping and praying the bouncer will let you into the nightclub, you know that the experience taps something primal in most of us. It is more than aspiration, I would say. The feeling of being special, a VIP, I believe, is a need that is universal.

With that in mind, we made a deal for the RBK campaign with a retail chain that wasn't in the footwear category at all. Instead of marketing in the obvious venues, we created this once-in-a-marketing-lifetime arrangement with FYE, a music retail chain, and other big box music retailers, to exhibit RBK sneakers in more than 1,500 stores across the United States.
Record
stores. The locations were selected for their proximity to footwear stores that were specifically “authorized RBK sneaker dealers”—where consumers could easily find them to go purchase shoes, or, because they were being issued in limited amounts, they could go order them in advance so as not to miss out. At each of the FYE and other authorized stores we placed a single, gleaming RBK sneaker in a protective Plexiglas box high atop a pedestal—with lights—as you would display priceless, untouchable gems. And then for the final detail, we cordoned off each display with a velvet rope.

The code could be read in any neighborhood. RBK, because it merged values of sports and music, found its way into distribution channels that had previously been unthinkable. The satellite brand was such a smash out of the box that when the dust finally settled, Reebok overall found itself not just off life support but on its way to regaining enough market share to take away gains from Adidas and to start to eat into Nike strongholds.

We had only just begun. For true radical disruption, there were still some really out-from-left-field strategies in the works for the campaign's phase II.

There is an unwritten law in the hip-hop code of ethics, woven into the belief system—the urban/suburban religion being spread worldwide through tanning. And that is the rule that always and forever you gotta represent what you love. And the truth is that I, as a consumer, as grown-up urban kid Steve Stoute, and as a marketing expert, happen to really love Nike.

And the love of a brand, as often as not, can be tied to experiences that happen when we're young and the most impressionable. So whenever I think of Nike from those days of growing up—when your sneakers defined your cool or destroyed it—the image that comes to mind is that of the Air Force 1 that was on the market so briefly, back when I was twelve years old. Then, in the early '00s, a miracle occurred. Nike released the Air Force 1 in all-white. In the record business, where I was still working at the time, for artists and executives alike, the return of “the 1s” in all-white was like a religious revival. Clean, understated, with a thick sole and low cut, the sneaker was mandatory. And with a pair of jeans and a white T-shirt, the Air Force 1 was part of the ubiquitous uniform for cool.

More variations in colors and materials and updates would come each year but what made the white sneakers especially powerful was that they belonged to the hip-hop generation, to the architects of the culture who never forgot them. They were like collector's items. Definitely not common. All the care that we regularly took of our sneakers had to be intensified to make sure our 1s didn't incur even the hint of a wrinkle or the suggestion of a smudge. We would not only put tissue in the toes when we weren't wearing them but some of us actually left tissue in the sneakers when we wore them. Nope, it wasn't comfortable but it was what you did to care for sneakers that might be tough to replace. Because if there was a wrinkle or the shoes looked dingy in the least, you had to replace them. Well, the solution to that was to buy multiple pairs.

Here's where it got really crazy. With Nike's keen understanding of the marketplace, they intensified demand for the Air Force 1s by putting them out in a limited release. As the proverbial eight-hundred-pound gorilla of the sneaker business, Nike had the retail relationships at Foot Locker and elsewhere to institute “only one pair per customer” rules. The only recourse for those of us who needed to stock up was to become very good friends with our local Foot Locker sales staff—making sure that we had tickets to concerts and sporting events to show our appreciation for being allowed to purchase twelve pairs at a time. That was the culture.

All of that said, over its history, though Nike had paid attention to the influence of hip-hop music and culture, it had kept almost at an arm's length from it marketing-wise. So it was not a problem as time went on to love Reebok/RBK a little bit more for a few reasons, especially for its willingness to go all the way in its embrace of the consumers who were changing the brand's fortunes. How Nike was reacting to Reebok's resurgence was hard to read at first. Eventually, however, a showdown was inevitable.

One of the issues Nike could not have been happy about was the news in 2002 that Paul Fireman had ended up taking a page out of his own playbook to score the seriously lucrative contract to outfit all twenty-nine teams in the NFL with uniforms—and to be lead licensee for selling official team apparel and merchandise to the public. Two years earlier, just back on the job after watching the Reebok stock price plummet, Paul had gotten the NFL contract in an unusual way. In those days, several brands had NFL contracts. In some cases, teams like the New York Giants might have deals with four different top brand apparel companies—causing overlap, confusion, price gouging, and falling profits for everyone, including the football teams. If you went to a sports apparel store for a Giants jersey, there might be four different shades of blue for that same team, none more official than the other. Nobody was winning that contest.

When Paul was informed that everyone's contract was up for review and renewal and that a visit was going to be paid to Reebok headquarters, he told them all he wasn't interested. The only way he would throw his hat in the ring is if the commissioner, coaches, and owners would come see him last—after they had met with the other manufacturers.

When the NFL brass arrived, Paul Fireman welcomed them—as he reported the story to me—and then told them up front, “Before I begin, I'm going to tell you something, and you can leave, if you wish. You can leave any time you want. You can get up and be outraged with me. But I have to tell you that you've abused manufacturers for years.” He went on to detail how the NFL had taken advantage of brands and lost people their jobs and gotten away with it because—well, because they could. What's more, he believed that the product line was terrible and he asked for a show of hands to see who disagreed. Not one hand went up. Then Paul held up those four different colors of blue Giants jerseys to emphasize his point. He proceeded to tell them he could fix it and that if they wanted him to give them a proposal, he would.

Because he had gotten their attention in such a blunt fashion, Paul explained to me later, “they now knew they had to listen to the next chapter.” In making the proposal, his ultimate recommendation was that for every football franchise, all the teams together, the business needed to be overseen by one licensee—one leadership, one set of business systems—which would mean consolidating everything into a relationship with one manufacturer. Otherwise, with brands working at cross-purposes, everyone was being dragged down in the process. Initially, owners and commissioners decided they would like to split the business, with Reebok overseeing the American Football Conference and Nike the National Football Conference. Or the other way around.

Fireman said, “Give it all to Nike. Let them run it.” Even though they worried that might change the brand they wanted, he told them, “They'll still run it better.” In a very short turnaround, they came back and asked Reebok to run it all. Amid much back and forth, a ten-year contract was scored.

Incredible. When I first got the account, I was rolling in football jerseys. The Philadelphia Eagles made a jersey for me that said “Stoute” on the back. How he could have told them to go with Nike was beyond me. It was just brilliant.

Paul Fireman said, “I knew that they'd resist if I said they should give it all to me.” Suggesting they give all the business to a competitor was “very simple math,” per Fireman. “It's called a gamble.”

Before Reebok consolidated the business, the NFL's merchandise revenues had fallen from $700 million to $300 million annually. Paul's recollection was that after taking over he was able to drive revenues up to about $750 million per year. And unlike before, the revenues were split evenly between all participants.

Not surprisingly, when it came time for the NBA teams to review their contracts for uniforms and licensing, they sought out Reebok's core competencies and made a similar deal to begin as soon as the other brands' contracts expired.

With RBK's success on top of that growth, brand revenues had been raised $100 million for 2002. The Sneakers Wars had heated up again, especially when RBK put out a limited edition of an all-white shoe we called the I3 Pressure, as part of the Iverson lineage. Though the toe was different, it was a similar price and looked so much like the all-white Air Force 1 that sparks really began to fly.

The commercial we did with Fabolous and DJ Clue had a guy eating a jelly doughnut and watching the dripping jelly fall slowly in an overdramatic way to accentuate the message: Don't get any mess on your white shoe! Not the smartest spot ever but it appealed to the mass of kids who wanted the look of the all-white sneaker but could never get their hands on the Air Force 1s. Now they could without a barrier—and with Allen Iverson's stamp of approval promoting an all-white shoe that was clean and fit the cool uniform. Was this stealing Nike's thunder? Absolutely. And because of the command and control that Nike had been exerting over Foot Locker and other retail stores with their limited editions and their only-one-pair-per-customer rule for the 1s, the opportunity for the I3 Pressure to gain momentum in its limited run was huge.

The launch was at Foot Locker. As Paul reminded me, they sold a million pairs immediately. Nike went ballistic, as he recalled. After all, he noted, RBK was “eating up the market, coming on like a freight train.”

And what did the power player in this matchup do? They told Foot Locker that if the retail chain didn't stop selling the I3 Nike wouldn't sell them any more Jordans. Foot Locker, caught between a rock and a hard place, couldn't lose their Nike business. They proposed to Reebok that they would drop the I3 but put those dollars into another sneaker. Paul Fireman refused to budge at first but Foot Locker kept upping the ante, promising an additional $50 million and twice that if only they could get out of the Sneaker Wars diplomatically.

We even went through a period when Paul Fireman wanted to get into mobile retail, actually to rent RBK trucks and pull them into parks so we could sell the sneakers that had been banned by Nike and Foot Locker. After everything was said and done, as Paul would say, he blinked and agreed to pull his I3 business from Foot Locker. As he himself had said before in other ways, “You can't win them all.”

Thankfully, given what I had in the works for phase II of “The Sound and Rhythm of Sports,” the relationship between Reebok and Foot Locker was preserved. But there was another concern having to do with Nike that I had to approach very carefully.

My vision for consummating the marriage of RBK and hip-hop—and for the grand finale of the total disruption strategy—was, again, to do marketing in product development. But this time, I wanted to have the sneaker line be for a hip-hop artist. The story that had begun with the tanning moment back in 1986 at Madison Square Garden and Run-DMC being given an endorsement opportunity with Adidas had never truly realized its potential. It was time to follow through on the opportunity to impact culture even more powerfully—to explore the possibilities of having the first nonathlete receive an endorsement deal on par with superstar sports heroes, a signature line of sneakers, and the fervent marketing support that one of the top global brands could provide.

This was just the next logical step in the lineage that had begun with Michael Jordan and Allen Iverson pushing culture on the court, coming at the premise that all rappers want to be basketball players from that angle. The momentum of music, hip-hop culture, and a sport that was going global like never before was creating a harmonic convergence energy. To make an impact worldwide, of course the basketball players had to be great athletes and the rappers had to be great poets and musicians. Not everyone could be that. But the attitude of coming from nothing and turning it into something, as well as having an antiestablishment mentality, was accessible to all. The possibilities for me, when you could get all those elements working in tandem, were incredible. There were three artists I had in mind for fulfilling all the possibilities. But nobody could rise to the occasion to hit that first home run better than Jay-Z.