Snowboarding has become the driving force behind Nike All Conditions Gear (ACG) brand of apparel and hardgoods.
According to ACG President Gordan McFadden, “The focus of ACG is all alternative sports. In marketing terms, the aspiring snowboard consumer is where ACG wants to be. For us, it's about psychographics, not demographics. Buyers of ACG product might be in their late twenties, but they still wish they were in their teens and early twenties. We know we're marketing to a much younger group than will be buying the products.
“With expected sales of 250-million dollars in three years, ACG will represent only about three percent of total Nike sales,” continues McFadden. “That still makes us the third-biggest outdoor-sport company in the world. But our brand awareness is nowhere close to sales.”
Three-year projections expect that snowboarding boots, bindings, and apparel will account for only ten percent of ACG sales (or 25-million dollars).
This is a reflection of just how small snowboarding sales actually are in comparison to other sports, but McFadden says snowboarding will represent up to 50 percent of the ACG marketing budget. Approximately 2.5-million dollars per year has been earmarked for marketing the snowboarding program.
Snowboarder Rob Kingwell has been selected as one of only four Nike athletes out of its long list of superstars to be the focus of a major advertising campaign in the coming year.
“We can't sell trail shoes using trail runners because no one has ever heard of them,” says McFadden. “But our snowboard athletes have an existing identity and are generally seen as more approachable and real.”
McFadden also points out that using snowboarding as a marketing vehicle is pointless unless the product stands up on its own in the snowboard marketplace.
“Making great snowboard boots and top-quality apparel is our core competence,” says McFadden. “The deep pockets and design resources we have give us a marketplace advantage. We can fund far more research than anyone else, plus we have far more experience in how to effectively work with athletes. We can draw on everything Nike has learned over the years.”
ACG also clearly has a number of other competitive advantages, says McFadden. For example, by using Nike's sales and marketing muscle, ACG already has centralized distribution in Europe–putting it ahead of all but a couple of United States brands. ACG is also a “preferred supplier” for InterSport, the retail sporting goods chain that claims up to 30 percent of the European snowboard product market.
Furthermore, a corporate reorganization that made ACG its own Nike business unit (similar to the Michael Jordan brand) now allows far more focused business practices.
For example, turnaround on designs have been cut from eighteen to twelve months and ACG's heads of design, Scott Hutsenpiller (apparel) and Damon Clegg (footwear), have final approval on design ideas.
On the marketing side, however, Nike's marketing gurus still have some oversight. But this is mostly because ACG–with its snowboard cachet–has something the rest of Nike wants, says McFadden.