Reebok shoots from the hip-hop in sneaker wars

In the Eighties and early Nineties, the battle for market share in the $15bn (£9bn) North American athletic footwear sector was quite an interesting one, easily rivalling the cola and burger wars for attention. By the mid-Nineties, however, the race had become much less gripping, as Michael Jordan-powered Nike streaked ahead of its chief rival, the British-born Reebok.

A decade later, with Nike continuing to attract big-name sporting celebrities to endorse its products, Reebok has decided on a change of tack, signing up non-athletes to create their own signature collections – and early signs are that the strategy is working. Reebok seems to have decided that if it can’t tackle Nike head-on, it will look for an alternative route – and aligning itself with urban hip-hop artists could be the ticket to the street credibility that it desperately needs.

In many ways, Reebok’s decline in the mid-Nineties came as a result of its success with women in the Eighties. The company was the first to create a specific shoe for women, was the inventor of the Step Reebok exercise programme and became the biggest name in the aerobics shoe market. But being the shoe of choice for a generation of middle-aged women did little to endear Reebok to the teenage urban American male who is king of this category. Why? He buys seven to ten pairs of “sneakers” a year, many costing more than $80 (£50) a pair – and the last thing he wants is to be accused of dressing like his mom.

As it lost more and more credibility with the core market, Reebok even managed to lose the number two position in the category to Adidas. Reebok’s marketers realised that if the company was to succeed it had to compete for the attention of the teenage urban male. The first move came early last year, with the launch of Rbk – a brand extension that aimed to move away from the Reebok name and capture the urban male imagination.

The company then signed up NBA star and hip-hop fan Allen Iverson, ignoring his criminal past (he went to prison for his role in a 1993 bowling-alley brawl and was convicted on a concealed weapon charge in 1997) but playing up his attitude and style off the basketball court. The ads he starred in looked more like rap videos, as he lounged around with scantily clad women and they included just a single shot of him playing basketball. Iverson was all about street credibility for Reebok – and his own 13 Collection for Rbk became a top seller for the company.

Reebok’s most recent move is its boldest yet – signing a roster of non-athletes to promote the brand. It has rappers Jay-Z and 50 Cent on board to design “signature collections” for Rbk, aiming to tap into their huge popularity. Reebok is also sponsoring the nationwide “Rock the Mic” tour this summer, headlined by 50 Cent and Jay-Z and featuring Busta Rhymes and Snoop Dogg. Reebok’s co-sponsor is none other than Foot Locker, the top retailer of sports shoes in the US – and one that happens to have fallen out with Nike after it cut its inventory of Nike’s top range of shoes, causing Nike to move millions of dollars of business elsewhere. Also signed up to the Reebok brand are Shakira, Missy Elliot and Venus Williams.

Reebok at least deserves credit for getting the right names on board. 50 Cent (who has been shot and stabbed several times) is the hottest rapper in the business at the moment, having sold more than 5 million copies of his album, Get Rich or Die Tryin’, which was released in February and is still on the US Billboard Top Ten. In a statement, 50 Cent (aka Curtis Jackson) says: “Reebok’s Rbk Collection is the real thing when it comes to connecting with street and hip-hop culture.”

While some observers are asking whether Reebok is making a mistake by aligning its marketing so closely to the volatile rap industry, many see it as carrying no more risk than signing a sports personality – who can also say or do the wrong thing or get arrested from time to time.

A case in point came earlier this month, with the arrest of LA Lakers star Kobe Bryant on charges of indecently assaulting a 19-year-old woman. Bryant has multi-million-dollar endorsement deals with Coca-Cola and McDonald’s, and last month he signed a $45m (£28m), five-year deal with Nike and was famed for his clean-living image. Ads featuring him are on ice until the case is over. All very unsavoury, but with Nike continuing to dominate the sector – with 42 per cent market share – and still signing big-name sports stars, it’s hard to believe endorsement is wholly the wrong strategy.

While Reebok’s $3bn (£1.9bn) of sales is still way behind Nike’s $10bn (£6.2bn), its differentiation strategy looks to be a good one, precisely because it is not trying to “be like Nike”, as has arguably happened to Adidas. If Reebok can own the domain of urban music and sports gear, it will be doing well – as many shoes sold to urban males undoubtedly see very little athletic action.

The Jay-Z Rbk line has become the brand’s fastest-selling product ever, while very big things are also expected of 50 Cent’s “G-unit collection by Rbk”, which will be on limited distribution this autumn with a full launch in 2004. Reebok also said in its statement announcing the venture that: “The initial marketing launch may include a special 50 Cent CD single with the purchase of the shoe.” And it referred to the deal as a “long-term partnership”.

But, Reebok is betting on the longevity of the rap stars and of hip-hop’s popularity – certainly more risky than aligning with a popular sport. Furthermore, the move into street fashion could be perceived by some of its target market as nothing more than a cynical ploy – a shallow attempt by a “mom and pop” organisation to buy its way into the cool kids’ closets. Fashion is always a fickle business, but throw edgy, urban music into the mix and you really are playing a tricky ball game. Once again, the sneaker wars are worth watching.