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Sneaker wars are shifting to the smaller sizes
Sneaker makers are seeing big dollars in little feet.
New Balance Athletic Show Inc., which has shied away from paying star athletes to shill its shoes, is rolling out a lineup of celebrity endorsers: Elmo, Cookie Monster, and Oscar the Grouch. The Sesame Street collection of infant and preschool sneakers debuts next month,[link widoczny dla zalogowanych], the first of four lines New Balance is planning as part of its largest children's initiative. The undertaking is projected to bring in $10 million over the next two years.
Rival Reebok International recently launched a line of toddler and children's shoes featuring the Incredible Hulk and Iron Man. Payless ShoeSource,[link widoczny dla zalogowanych], meanwhile, unveiled an infant-only collection this spring from designer Lela Rose known as Teeny Toes, and a new deal will soon expand the line to toddlers.
Once an afterthought, toddler sneakers are now a major focus for brands. Sneakers for infants and toddlers are the fastest growing segment in athletic footwear,[link widoczny dla zalogowanych], with sales over the past three years soaring 34 percent to $1.35 billion in 2007, according to market research firm NPD Group. Sales for adults grew just 3.5 percent over the same period.
The shift has accelerated as teen demand for basketball shoes - once the cash cows of the industry - has waned and discounters have taken a growing share of the adult sneaker market. The toddler segment is more profitable because more sneakers can be sold at full price, unlike those sold in more competitive markets aimed at adults and teens.
The race to lace up toddlers makes sense because they need new shoes more often for their growing feet and parents are willing to spend more on children than on themselves, retail analysts say. Moreover, brand loyalty can begin at the earliest of ages.
Meredith Armbrust, of Waltham,[link widoczny dla zalogowanych], buys sneakers every three to four months for her toddler, the latest a $40 pair purchased last month at Stride Rite. Over the past year, she has spent twice as much on sneakers for 2-year-old Luke as on herself.
"Toddlers can spontaneously decide they don't like shoes and aren't going to wear them," Armbrust said. "And I would rather pay a little more and get a shoe that I know fits him well."
But some critics raise questions about the brands' marketing tactics to lure very young consumers.
"Pulling young children into the 'must have' shoe market is one more way to turn tykes into hyperconsumers, creating an entirely new generation of overspenders," said Lisa Wise, executive director of the nonprofit Center for a New American Dream.
New Balance said its campaign is geared toward mothers. The Sesame sneakers - designed on New Balance's heritage running shoe the 574 - feature a furry tongue lining, peeking eyeballs, and vibrant colors. The 30-second commercials hawking the shoes,[link widoczny dla zalogowanych], developed with Kids Footlocker,[link widoczny dla zalogowanych], will air on Nickelodeon during Nick Jr. programming which skews younger viewers like the demographic of the Sesame collection.
New Balance, which struck a multimillion dollar sponsorship deal with Sesame Street in 2006, already has a spot during the Sesame Street episodes promoting its sponsorship, but it cannot display products because of program restrictions. The Nickelodeon ads will feature shots of Sesame Street characters' feet with a voice-over singing about the different feet and ending three times in a shot of a child's foot in the New Balance shoes. Ads will also run in two parenting magazines.
The co-branding of kids sneakers - a first both for New Balance and Sesame Street - is aimed at jumpstarting New Balance's US kids business, which had been growing at a rate of about 2 percent for several years until staying flat last year. At the same time, the licensing deal will help the private business make inroads into lucrative emerging markets in Asia,[link widoczny dla zalogowanych], Latin America, and the Middle East.
"You're seeing a lot of brands coming into this space more aggressively because it is a profitable business. Because people are having fewer kids and they're spending more on each child, the average selling price is going up,[link widoczny dla zalogowanych]," said John Shanley, an analyst with Susquehanna Financial Group.
New Balance's Sesame Street line will start at $43 for infants and $53 for preschool, some of the highest price points in the segment, said Brad Miller,[link widoczny dla zalogowanych], New Balance's strategic business unit for kids manager. New Balance's infant shoes have typically sold for about $30, while New Balance's 574 shoe for adults retails for $60. The average infant/toddler shoe retailed for about $16.89 at the end of December,[link widoczny dla zalogowanych], according to NPD.
"We felt this was a unique opportunity to bring two of the most trusted brands by moms together and position this as more of a premium product in the kids business,[link widoczny dla zalogowanych]," Miller said of the Sesame Street partnership.
Reebok, meanwhile, recently launched its exclusive line of children's footwear at Kid's Footlocker as part of a licensing deal with Marvel Entertainment that features two of the most renowned superheroes in the Marvel Universe. The shoes retail for $45 to $65.
"For the most part, the mother is still making the buying decision,[link widoczny dla zalogowanych], but she's more influenced by her children than ever before," said Neil Hernberg,[link widoczny dla zalogowanych], head of Reebok's kids division.
Even designers like Guess are getting into the toddler game,[link widoczny dla zalogowanych], unveiling a tiny sneaker last fall that featured soft leopard print lining, cushioned collar,[link widoczny dla zalogowanych], and heart and gem-like accenting that cost about $60.
"People tend to throw out the frugal button when they buy products for their adorable little toddlers. They tend to communicate their taste level, their status level and their image even more so by how they dress their toddlers," said Marshal Cohen, NPD's chief retail analyst.
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