You might be wondering why I would ever consider writing about such a staid product like socks. Walk around any school yard these days and you’ll quickly realize that the days of the basic white tube socks are gone. As a father of two 9 year olds, we are seeing first-hand the craze of the Nike Elite basketball sock. (Disclaimer: as the former GM of Nike’s Equipment division, socks was one of my largest product categories. Yet, I can take little credit for this recent success). Selling for a whopping $16/pair, my kids must have an equivalent of 1-2 pairs of shoes worth of socks in their drawer, in all colors imaginable. While Nike created this newest craze, many other brands in the sporting goods industry are capitalizing on the trend and achieving 25% – 40% sales growth. So, what’s behind this phenomenen?
This week’s Wall Street Journal has run a great series on the decline of Japan’s consumer electronic brands like Sony, Toshiba, Sharp, etc. While the electronics industry is extremely competitive with frequently changing technology, no one would have predicted 10 -15 years ago that Sony would be surpassed by it’s Korean competitor, Samsung. For those who grew up in the 80’s, the Sony Walkman was our generations version of the iPod. No longer did we have to carry around a transistor radio or “boom box”. We could cruise around with our Walkman in our back pocket and listen to cassette tapes or the radio.
What Sony and many other consumer brands get wrong is to assume that their consumers will be happy with improved versions of their existing products. Naturally, continual improvement is an important part of any business but is not the key to long term success. It’s been said that Steve Jobs didn’t believe in consumer research because most consumers could only tell them what their needs are today. Part of this is true yet I would argue that the best brands are able to interpret what consumers are saying to not only understand what issues they face and but also understand how those needs are going to evolve. Continue reading