Doug Palladini, Vans

At Vans, the bottom line may be about making a profit, but the top line is about being true to the brand’s cultural heritage while keeping its shoes, apparel, accessories—and marketing—real for consumers.

Thank you, Sean Penn, they say at Vans, for creating a memorable character in Jeff Spicoli, the iconic surfer dude from the 1982 cult flick, Fast Times at Ridgemont High, who wore Vans’ checkered slip-ons as a symbol of his slacker status and helped propel the company from regional to national fame.

Thank you, rap group The Pack, for recording the song “Vans” on your CD, Unknown (Jive Records, 2006). We really appreciate the video on MTV and BET, which is a shout-out about the virtues of our shoes and drives awareness of the company among urban consumers.

Thank you, flip-kickers at Vans Skate Parks, and guys and gals who compete in the Vans Triple Crown of Surfing. Thank you, music fans of the Vans Warped Tour and enthusiasts at the Dew Action Sports Tour, for supporting the events that are getting our name and products top of mind with kids and young adults. And thank you, Web surfers, who’ve made an interactive community by listening to our music, blogging and downloading our podcasts.

“In my 20 years of marketing, Vans is probably the closest I’ve seen to the true definition of a brand as it expresses an emotional connection between consumers and a product,” said Doug Palladini, vp-marketing at Vans, Santa Fe Springs, Calif., which was founded in 1966. “Despite some really awful business decisions over the 40 years, Vans has been able to maintain an amazing emotional connection with its consumers.”

Although Penn’s take on stoner-surfer Spicoli was a Hollywood caricature—”All I need are some tasty waves, a cool buzz, and I’m fine”—his love of Vans was the catalyst that turned a Southern California success story into a nationally recognized brand. Fast forward to 1996, when The Suicide Machines recorded “The Vans Song” on Destruction by Definition: “Get a pair of Chukas or some checkerboard slip-ons/Worship Jeff Spicoli not Chris Cornell/Get a pair of Vans or God will send you to Hell.” Fast forward again to The Pack’s rap: “I wear checkered Vans the same color as snow . . . Got my Vans on, but they look like sneakers . . . They slip in and out real easy, like blunts/U can get different colors, like rainbows/Since 1966, Vans had set a trend/I got a blue pair, yea, in a size 10.”

According to Vans, sales in urban markets have gone up since the song dropped in early summer. “The best thing about [this type of association] is that is that it’s been organic,” said Palladini. “We don’t endorse celebrities, they endorse us. We sponsor skateboarders, snowboarders, surfers. If celebrities call us and they love Vans and they ask us for shoes, we send them to them. And that has been great for us.”

Back in the day, Vans DNA began and ended with shoes. Now it includes 150 retail outlets and two company-owned skate parks in Orlando, Fla., and Orange, Calif. The brand promotes itself around what Palladini calls “the four pillars of Vans culture”: action sports, music, street culture and art. The Warped Tour began in 1995 and has recently ramped up to include more venues and hundreds of cutting-edge bands. The marketing partnership with the five-city Dew Action Sports Tour is now in its second season, with programming featured on NBC, USA and Fuel. This is anchored by sponsorship of the three-day Vans International event in August in Portland, Ore., featuring skateboarding, BMX and freestyle motocross. More than 232,000 attended the Tour in 2005; this season ends Oct. 17 in Orlando.

“Doug has been involved in action sports his whole life, and he understands the market as well as anyone,” said Wade Martin, general manager at the Dew Action Sports Tour, Aurora, Ill. “He has a very keen eye for the packaging and presentation of the tour, and we’ve trusted and utilized his guidance in our marketing and on-site.”

As for the brand, Martin added: “The credibility Vans has brought to the Dew Action Tour has been critical as the event establishes itself with consumers and action sports participants,” said Martin. “There is no other company with a deeper or richer heritage in action sports than Vans. The rub-off we receive through the association helps the tour with other corporate partners, the athletes and the consumers.”

In Fast Times, Spicoli scoffed at attempts by his teacher, Mr. Hand, to dole out history, but a lesson in Vans folklore is merited here. Vans began as the Van Doren Rubber Co., and made its mark by producing shoes that catered to young consumers whose lives revolved around SoCal surfing and skateboarding. In the early 1980s, Vans redirected its energies toward producing football and baseball shoes, which drove the nucleus of its action sports consumers elsewhere. In 1984, the company plunged into bankruptcy. In 1991, four years after emerging from Chapter 11 protection, Vans was acquired by McCown De Leeuw investment bankers, which took the company public. In 2004, Vans was acquired for about $400 million by VF Corp., Greensboro, N.C., also parent to Lee and Wrangler. Vans became part of VF’s Outdoor Coalition division, which now houses eight action sports brands, including Nautica and The North Face.

To further focus its efforts, Vans has in recent years brought all elements of the business in-house, including marketing, Web and product design, retail and distribution. “We have people here who live the life 24/7,” noted Palladini, who joined the company in 2003. Vans also enhanced its Web site to include more interactive and community-type elements (such as podcasts, blogs, and links to sites of bands and athletes) and expanded upon a strategy that saw the company move from producing one line of products for all consumers to segmenting its offerings.

A high-end line, Vault by Vans, for example, is sold only at boutiques such as Marc Jacobs, Barney’s and Fred Segal, with higher price points and limited availability. Another line, for the masses, is sold at such retailers as Kohl’s, J.C. Penney and Dick’s Sporting Goods. A Classics line targets core consumers and is sold only at skateboarding shops. About 90% of Vans sales come from shoes, the rest from apparel and accessories.

“Three years ago, you wouldn’t have seen Vans in a real boutique atmosphere, where the fashionistas shop,” observed Palladini. “Now we’re right there alongside Nike, with their high-end, collector-type product.”

All of this has translated into a strong financial performance. Though VF does not break out sales figures for individual companies, a Q1 report in April stated, “Vans and North Face were primary drivers behind a 59% increase in operating income for the Outdoor Coalition.” VF’s most recent report, for Q2 ending in July, showed revenues for the Coalition “grew 24% to $371 million, with Vans recording a healthy 20% growth rate.”

“Vans has invited consumers to play with the brand, and to showcase their creativity,” said Samantha Skey, svp-strategic marketing at Alloy Marketing & Media, New York, which tracks teen trends. “By providing strong customization opportunities, they are allowing consumers to really own the brand and express themselves via Vans.”

Palladini and Vans both turned 40 this year, but the brand’s core constituency of 10-25 year-olds shouldn’t hold his age against him. He has two kids, but likely won’t be mistaken for the typical middle-age dad.

His resume places him squarely at the forefront of action sports, including founding Snowboarder magazine in the 1980s and group publisher in the 1990s of Emap Peterson’s Action Sports Group (Snowboarder, Skateboarder, Surf, Gravity, Powder). Palladini was evp at surfing Web site from 2000-02, and, prior to joining Vans, was director at Cynic Youth, the youth marketing division of DGWB Advertising, Santa Ana, Calif. And, by the way, his dad introduced him to surfing when his family moved to Southern California when he was six, and he now takes his 10-year-old son and 7-year-old daughter surfing and snowboarding.

Vans does not spend much on TV and print advertising: $4 million in 2005 and $2 million the first six months of 2006, per Nielsen Monitor-Plus. It gets the real bang for its buck from experiential events such as the Warped and Dew Tours, sponsoring extreme athletes and local events, and organic marketing such as the “Vans” song and hits to its Web site. Vans said research shows its online destination is among the highest trafficked action sports sites on the Internet—more than three million unique users a month. Palladini said podcasts launched on the site earlier this year have already been seen by more consumers than the total number of impressions Vans received for its TV and print marketing in all of 2005.

“The way that young people consume media today is so driven around online access. For our audience, that’s been the single greatest dynamic change in the past decade,” said Palladini. “The biggest challenge now is to maintain the energy that we have. We want this to last for the long term, not ride the trend while it’s hot and then figure out what the next cool thing is. It’s about continually reinforcing who we are as a company, always going back to our action sports heritage and DNA to find new opportunities instead of trying to blow something out for the moment. I see granddads, dads and sons surfing together, wearing Vans. That’s cool.”

Perhaps Vans’ greatest accomplishment has been maintaining its aura of authenticity while ramping up its message to consumers through its active promotions and partnerships.

“Modern day relevance that’s backed by an unbreakable authenticity,” Palladini concluded. “That’s the power of the brand.

Photo by Vern Evans