Bob Mullaney, president of U.S. sales and operations for The Rockport Company, discusses how the brand is regaining its premium leadership position in the comfort space and how the best is yet to come.
By Greg Dutter
A rich product history and managerial pedigree are two of the aspects that stand out most when you think of Rockport. The brand's 40-year legacy of product innovation, which includes a closet-full of iconic styles (think Dressports and World Tour collections as two examples), has made it as a comfort staple and category anchor for decades. Equally notable, from an industry insider's perspective, is the long line of talented managers who have put their stamp on the brand, beginning with founder Bruce Katz, who arguably introduced Americans to the modern-day lightweight and technology-infused comfort shoe concept, followed by Bob Infantino (former head of Clarks and now running DryDock Footwear); Angel Martinez (CEO of Deckers Outdoor); Tony Post (who used to run marathons wearing Dressports and is now CEO of Vibram USA, makers of FiveFingers); Rick Paterno (president of wholesale brands at Nine West); Diane Sullivan (president of Brown Shoe); and Terry Pillow (who headed up the Ralph Lauren footwear license after his Rockport stint). It's a footwear executive all-star team and one of the reasons that, when the opportunity came about, Mullaney, a career industry veteran with managerial positions at Timberland, Vida Shoes (where he launched the Baby Phat and Pastry brands) and Brown Shoe, couldn't pass it up.
"I have always admired the Rockport brand," says Mullaney, who took over the helm of U.S. operations last April. "It's the gold standard. It has been one of the best in the industry and still is." In fact, the managerial talent of his predecessors serves as a daily incentive for Mullaney to build onto that legacy. "There's an amazing amount of talent that has worked on the brand and added to it," he says. "We owe it to the brand to continue that legacy and bring Rockport forward." Mullaney is confident that his new management team has already made strides in that regard with the successful launch of TruWalk Zero this spring, with this fall's debut of RocSports Lite and with next spring's Business Lite collections. "I believe there will be a period when we look back at some of these launches as iconic shoes introduced by the brand," Mullaney says, adding that it's just the beginning. "We will be coming out with even more great-looking and comfortable styles to fill out the closet."
Mullaney believes now is the time for Rockport to re-stake its position as a comfort category innovator and leader. While the brand fell off track a bit during the previous few years, losing some of its innovative product edge and being promoted too heavily, it still has good bones and its reputation among its loyal consumers remains solid. And Mullaney believes it's open season on winning over a new generation. It starts with great product. "We need to recapture our marketshare in men's, but we need to do it through innovation, incorporating sport technologies and creating compelling product stories so we go back to what made Rockport great—offering a great consumer experience," he says. Beyond that, there remains the elusive (yet enormously enticing) goal of capturing greater women's marketshare. It is a lucrative segment that Rockport has never really sunk its teeth into. Call it the brand's white whale. "We have had a nice little women's business of late—it's been better distribution and more limited—but we believe there is a huge white space in the marketplace, which is style made comfortable," Mullaney offers. "We shouldn't have to compromise that a shoe can only be one or the other."
Mullaney says the brand's design team, using the tremendous resources of its parent company Adidas and sister brand Reebok, is hard at work on delivering that one-two comfort and style punch. An element of surprise, Mullaney surmises, works in the brand's favor in attracting women: "Customers often say, ‘Oh, that's a Rockport shoe.' The great part about that is they are also saying that they know it will be comfortable because it's made by Rockport." Mullaney is fully aware of previous attempts made by the brand to achieve the Holy Grail of women's footwear design—as have hundreds of brands who have tried in vain. "It's a cliché to say we are going to make fashionable shoes comfortable because it's rarely executed," he admits. "But we are dedicated to that effort. It has to be a part of who we are and what we do as a brand every day." The technology quotient, Mullaney adds, is the difference maker: "A lot of fashion brands can't avail themselves to our types of technologies. That's one of the beautiful aspects to being associated with Adidas; there's a lot of innovation going on."
In addition to introducing great products, another focus of Mullaney's has been to clean up Rockport's distribution and make sure its existing partners back off on promotion. Discounting Rockport might have been a great way to lure customers into stores, but over the long term it damages the brand. "We need to build back brand equity," Mullaney says. "We have to get back to what made Rockport great, and that's the product and not the sales price." And while distribution will span from department stores to independents—what Mullaney describes as a fact of retail life today—there's plenty of opportunity for all partners to prosper with the brand in their respective mixes. "We are going to continue to grow with better distribution—with the retailers that can best tell our story," he says. "Those retailers spend a lot of time with their customers, where it's not always about price or discounting, but about offering outstanding value to the customer."
Then there's the timing aspect that may be in Rockport's favor. Competitors might have slipped. Fashion is cyclical and a sound game plan can revive brands with a great heritage. And maybe the stars will align, too. "We are getting a lot of feedback that it's all lining up and that it's Rockport's time," Mullaney says, noting the first quarter of this year saw double-digit sales gains. "It's nice to hear because it means confidence is building in the marketplace." However, he is not naïve or complacent. "I don't want to get caught up in that and think it's just going to happen," he says. "We still need to execute. We have a huge opportunity in front of us and we are in a good spot to make it happen." For Rockport, the best is yet to come: "You will really see the brand take off over the next 12 to 24 months."
How damaging has the recent emphasis on price promotion been to the brand?
Thankfully, our customers who have an affinity for the brand—and even those who don't—don't have a negative perception. That presents real opportunity for us and proves the brand is as strong as ever. In addition, a lot of retailers have a good history with Rockport so the opportunity exists for us to move forward and leave the promotional aspect behind.
What is it about the brand that has kept its reputation intact?
At the end of the day, we have, and continue to make, wonderful products that the customer knows are of quality at an unbelievable value. And that's what the consumer demands today. Sometimes we can overcomplicate how we think about the business, but I believe Rockport has always strove to be a brand that delivered unparalleled quality, innovation, comfort and value in serving the needs of its consumers. We believe greatly in the mantra: "Do more. Be More. Live more." And that's our proposition: delivering products that allow our customers to do just that.
What are you doing to expand the reach to include a younger customer—beyond the World Tour guy?
First, let me say that we love our World Tour guy and certainly continue to embrace him. But we do feel strongly that we can execute against multiple consumer segments. To that end, we need to address style and comfort in all of our collections, but our newer collections lend themselves to a younger consumer base. Our style quotient has already significantly increased in our last few lines and we have been encouraged by the results, particularly with anyone who is under 30 years old. Also encouraging is that those under 30 who don't have any prior experience with the brand or preconceived notions have responded well. The fact that all of our shoes feature Adiprene cushioning—offering a product association with a brand that they are familiar with in their youth—is obviously a nice connection to Rockport. We believe once we are given that shot we will do a good job of bringing them back because we will deliver on our promise of making a quality shoe at an unbelievable value.
There's been talk about a younger generation of men that, while unwilling to give up the comfort of sneakers, they realize they need to clean it up a bit. Are you seeing that?
Absolutely. The customer now has more demands. They want instant comfort and they want to look good right away. We believe we are one of the companies that pioneered that approach back with our Dressports. And that story continues with the launch of our RocSports Lite collection this fall where you will look cleaned up and not, to your point, too relaxed.
While we may not be reverting back exactly to the dress code of Alex P. Keaton [Family Ties], do you see more dressing up going forward?
I do, but I think it's going to be more mix and match. You are going to see a lot more blazers and statements made with accessories, particularly with footwear. There's going to be more classic silhouettes but with an edge and paired with jeans. It won't be Alex P. Keaton in a three-piece suit, but you will see smarter decisions being made by men.
Might this shift be economic-related or just cyclical?
I'm not so sure the weak economy is the main motivation behind the shift; it's probably more that it's just a good look. Fashions change and lot of it is just cyclical.
Nonetheless, we may see some men cycle out of wearing cargo shorts and flip-flops to the office soon?
Yes (laughs). There is always going to be a new twist to it. So now we might be moving back into a clean-it-up stage, but there's more flavor and fashion involved than ever before. It's not nearly as homogenous as it has been in the past. Men want to stand out more; they are much more confident in being fashionable. They are making statements with their fashion decisions. And that's due to the easy and immediate access to information: They can pull out their iPad and log on to see what went on at the European runway shows. That access influences men, whereas before it was a much more controlled environment. More people are encouraged to, if you will, be their own stylist. The cat's out of the bag—guys are a bunch of fashion dandies?
I won't go on record saying just that (laughs). I still think guys enjoy service in terms of retailers providing opinions and recommendations. Actually, I think men are willing to pay a lot more money for it.
In appealing to a younger audience, how do you not alienate the World Tour customer in the process? Or is he evolving too?
We need to make sure we have innovations and product offerings that appeal to that customer base as well. It's about product, marketing and distribution strategies to make sure we put the right product in the right place and have the right marketing to compel the respective target audiences to buy. Athletic companies approach this process the best as they have broad distribution strategies involving many categories that reach a wide range of consumers. For example, Adidas has a walking shoe that appeals to a 45-year-old woman and a basketball shoe that appeals to a 15-year-old guy. I think we need to break out of the narrow mindset that we can only stand for one category or consumer segment.
Brands like Adidas and Nike appeal to an age range spanning 2 to 75, yet seem to suffer little confusion.
Correct. The 15 year old wearing an AdiZero basketball shoe is not affected by the 45-year-old woman wearing the walking shoe because Adidas delivered on each product to those consumers in the respective channels that they are comfortable shopping in. The brown shoe side of the business also needs to break through the preconceived notions of what channels and categories it can play in. Fortunately, it's one of the strengths of Rockport, where we can take up a large portion of a man or woman's closet share, as we are known for casual, dress and active styles. I don't believe there are too many brands that can go from a leather sole shoe to an active casual one. That puts us at the forefront.
How would you describe the TruWalk Zero collection?
It's our pinnacle collection in walking. It's the lightest shoe we have ever made and, when weighed against the competition, it has been lighter than almost every single one. The collection has gotten a great response so far and, to be clear, it's not about just cutting things out of the shoes to make them lighter that could compromise on the quality. Same for our RockSports Lite shoes, which will feature a triple-density bottom with a stitch to sole construction so there is no tuck board and 25 percent less glue used. It's extremely lightweight but also durable. We are not taking anything out of our shoes yet they will still hold up. And that's what Rockport has always strived to do: solve problems through innovation and provide value to the consumer. It also should be noted that while lightweight might be back in vogue, Rockport pretty much introduced the concept years ago.
Might TruWalk Zero be the brand's take on minimalist footwear?
Mnimalism is a running design that pertains to forefoot strike as opposed to heel strike, which has nothing to do with TruWalk. Having said that, it is absolutely our solution to offering consumers a lightweight shoe that enables them to do more while creating less fatigue. Who wants to carry around the extra weight all day? As a result, a person is going to feel a lot more refreshed and energized to do more.
Amid all this guy talk, where do women stand with Rockport?
We have done a nice job and there's been some good growth of late, but it's a much smaller penetration of the overall business, so there's obviously still a much larger opportunity for us. We believe that the white space is style made comfortable where she shouldn't have to sacrifice comfort to look fashionable.
You and just about everyone else is in this pursuit, right?
Agreed. If we are going to have a long, sustainable women's business we need to satisfy what she wants—and she wants to look good. Women of all ages are upping their desire in this regard—they have raised the standards in what they are going to buy in terms of a comfort shoe design. To that end, we are upping the ante on our style quotient. But in doing so by introducing different heel heights, shapes and constructions, it takes a lot of time and investment. We believe there will be a tipping point eventually—I can't tell you exactly when it will be—when women understand that they do not have to sacrifice on style.
Retailers have to help in reaching that tipping point.
That's the other big piece to the equation. We have to move forward together on this effort.
What is your current take on the overall comfort category? Is it as European-brand dominated or is it more open season?
This isn't the comfort from 10 or 15 years ago and that's thanks to advances in technology where brands can deliver yet consumers don't have to spend $300 on "comfortable" shoes. I think consumers are smart enough to know that now.
What is Rockport's biggest opportunity over the next 12 months?
The biggest opportunity in the immediate future is getting our shoes on people's feet. We believe the new technologies that we have recently introduced will convert consumers one at a time, particularly the younger guys who grew up wearing athletic shoes and have been trained since they were young to expect such levels of comfort and performance.
Ironically, women have been conditioned to believe the opposite— they have to sacrifice comfort for a good-looking shoe.
It's funny you mention that. Recently, I attended a conference where I saw a woman wearing a pair of Louboutins as she made her way to and from the podium. She absolutely ran to sit down and take off her shoes. I said to myself: That is exactly the problem we need to solve.
Yet women salivate over those shoes, willing to spend whatever it takes for a few minutes of painful style.
We believe shoes should be able to be worn all day—and comfortably.
Any thoughts on how the economy may impact Rockport or the market as a whole in the coming months?
Well, I'm not qualified to speculate on the future of the economy, but I do know that the customer has greater expectations than before and that is due to the difficult economy. They have become smarter and more informed, because they are more discernable than they have ever been. I think this favors good brands that deliver intrinsic value, and I believe Rockport falls into that category. We feel well positioned now that the age of over-consumption has gone away and consumers are more likely to buy quality over quantity.
How has the economy impacted where consumers are shopping?
Certainly, the statistics tells you that there are more people shopping online. But I do think that there are aspects of brick-and-mortar that are hard to duplicate online, like a tactile experience and a certain level of service. So I think there is still a huge opportunity in that tier. And I believe there will be a lot of magic for those retailers that can deliver both formats well. I don't know what exactly is going to happen next, but I believe the next innovation in retail will come out of the independent base. And I think online will inspire some creative and new distribution in the next three to five years. A hybrid is the easiest one to imagine, but I don't know just yet if that's what it will be.
A hybrid that can offer the event-like experience of a brick-and-mortar store with the convenience and immediacy of social media would seem promising.
In whatever form it takes on, I think that the customer wants to be inspired. And, to your point, they want to feel emotionally connected on many levels. Maybe online will be a place that serves a person who seeks ease in their day. But that's not for everybody. There's just something exciting about going to a store and having an experience. I mean, you can go to a runway show in person or watch it on your iPad. Where would you rather be? I think we have to remind ourselves of that aspect.
Interacting through technology and not as much through human contact: It may be convenient, but is it better?
A balance is better. Right now, it's all about that chase—the consumer's desire to be smarter. There's a huge desire for everyone to want to be in the know. That's why kids are texting all of the time—because they feel like they are connected and getting information. Tapping into that in some form is one of the things Rockport needs to do more. We need to examine it from a consumer behavior standpoint, because the popularity of it can't be denied.
Is there any presidential election year fallout to be expected?
The only thing I can say that might be election-related is that, compared to four years ago, the consumer has changed. They have much greater expectations and we have to work every day to exceed them in order to move forward. Beyond that, guessing what impact the election may have on our business is kind of like speculating on the weather: You can work yourself into buying a tremendous amount of sandals or not buying any sandals and the weather will still do what it wants.
Is the nation better off than it was four years ago? Are we, at least, heading in the right direction?
I don't think we are floundering as a country. There were some economic issues that were a little too far or fast and we had to become more pragmatic. I think it humbled us as a nation and got us to reexamine what the fundamentals are to driving an economy. Regardless, if we can inspire the customer he or she will come back to Rockport. And that's what we need to focus on. What I can impact is their experience with our brand in providing solutions and having a great experience. If we achieve that, then I'm convinced they will be inspired to buy more shoes from us. The good thing for our industry in general is that when he or she is inspired, they still buy shoes. If someone says it's not as good as it was four years ago, I don't look at it that way. I see it as it's just not coming easier. People are more demanding of us all.
True. But overall there are more feet in America and consumers are not opting to go barefoot. So what's there really to complain about?
Correct. We need to compel them to buy our brand. I know we are headed in the right direction to grow back our men's business and do it through better distribution. We are regaining our share through a new consumer, in addition to our old consumers. And I believe Rockport will also be at the forefront of that white space in women's, where style and comfort don't have to be mutually exclusive. We have a strategy in place through 2015 to realize more opportunity than we have seized in recent years. I feel pretty good about it. And we have some substance behind that; it's not just a wish. While the fourth quarter last year was difficult for most everyone in the industry, we fared pretty well and, in the first quarter of this year, we experienced double-digit growth and expect that to continue for the rest of this year.
So life is good, so to speak, for Rockport?
Yes. We have had an outstanding brand and we also have a lot of good retail partners that are rooting for us. But it's about hard work and not just getting lucky. There are a lot of things that we have been and will continue to keep doing that will pay off. But none of this just happens overnight. You don't just build one shoe and solve all of your problems. It has to be part of your brand's DNA, culture and organization that must continually be worked on and refined. We have a great team working on all of those aspects and they are coming together to provide opportunity.
What, specifically, do you love about the footwear business?
What isn't there to love? On the women's side, it changes continually so you always have to be on the hunt. You don't know where it's going to come from next, and it can come from all over the world. On the men's side, it's all about the details and doing it in creative, new ways.
What do you love most about your job?
The brand is No. 1, for sure. The opportunity and the people—internally and externally— and the passion they have for Rockport are close seconds. I have the privilege to work with a lot of great people. And I also love the new and innovative product; it's inspiring and makes me love coming to work each day. Lastly, I love having been given the opportunity to add to Rockport's legacy. We have a tremendous opportunity and we are on our way. The brand has been growing worldwide for the last four or five years and it's just a matter of making it happen here, too. What a wonderful thing to be able to do.