Shoe SkinsCustomer-Driven Feasibility Study

Bristol, Cuozzo, Holz, Lyman, Patibandla, Sexton

• Research Performed and Customer Pain.• Shoe Skin System, Benefits, Target Market• Macro-Market analysis• Macro-Industry analysis• Key Lessons and Conclusion

Executive Summary:Shoe Skins

Shoe Skins is a unique system that makes footwear fun by allowing children to easily change the look of their shoes any

time they want.

“Being different makes me feel good.”

Colin (age 8)

“At school, you don’t like to be the same. You want to stand out.” Vika (age 11)

“I like clothes and styles that nobody else has. “

Phoebe (Age 7)

Child and Parent Interviews

Children’s Shoe Buying Survey

• 90% of parents said kids influence their shoe buying decision.

• 95% of parents said they buy kids shoes because kids outgrow the old ones.

• Sneakers are the most popular shoes.

Who are the customers?

• Boys and Girls• Ages 5-12 yrs• Friends important• Very active (sports, dance,

etc.)

• Companies• Access to a large target market

to extend their brands.• Promotional opportunities

such as give-aways.

• Parents / Extended Family• Want their kids to be happy• Save money on multiple shoe

purchases• As a gift or treat (Skins especially)

• Organizations• Marching Bands• Cheerleading Teams• Sports Teams

Who is seeking the benefit?

Who else would buy?

Customer Pain

Parents: Having to buy multiple shoes for kids.

Kids: More choices and styles with their shoes.

Benefits of the Shoe Skin Solution

Variety of colors

and styles

Offers individuality and

self-expression

Ability

to share,

collect, and

trade skins

Cost effective – less need for other shoe purchases.

Benefits

The Shoe Skin System

High “cool” factor

with something new

and innovativeGreen: less shoes,

recyclable skinsOnline socialnetworkFun online

games and activities

Related Offerings and Expansion Possibilities

Licensing potential

Unique designs,match with outfit

Accessories (matchingLaces, pin)

Color, and pattern options truly endless.

Limited Editions from artists

Add-ons suchas noises, LEDs

Fitness tracking:GPS, Pedometer

Potential Pricing

SECONDARY SOURCESPricing of existing novelty shoe

offerings:• Customizable Converse

sneakers: $58 - $95• Heelys: $43 - $80• Crocs: $20 - $40; Jibbitz (clip-

on decorations) $3 - $6• Sneakart stickers: $12-$14

PRIMARY SOURCES• All parents interviewed would

pay $30 for the shoe skin system.

• 40 parents surveyed on typical price paid for a pair of children's shoes:

• < $25 35.9%• $25-$35 43.6%• $35-$50 17.9%• > $50 2.6%

These data support a price of about $30 for the Shoe Skins system.

• Target Market: 5-12 YO• Est. 36M age 5-12 in 2008 *• 68% of the total $6.2B

children’s footwear market • $4.2B in 2009 for this age• Benchmarks:

– Heely’s: $186M US sales in 06’– Croc’s: $366M US sales in 08’

Target Market

• Benchmark shoe accessories• Jibbitz **

• Feb 06 sales: $212K• Aug 06 $2.2M

** Oct 06 sold to Crocs for $20M * US Census

Market Segmentation

Market A Market B

5-8 years 9-12 years

Macro Market SizeChildren’s Footwear

Market Size in Value Sales: $6.2 Billion*

• Expected to grow at 1.9% during year 2006-11

• Children’s market represents 13% of overall US footwear market

• Both Children’s and Women’s footwear market is expected to grow at a faster rate compared to Men’s market

Children’s AccessoriesMarket Size in Value Sales:

$2.6 Billion*

• Difficult to estimate kids’ shoe accessory segment

• Competing with all types of accessories

• Growing at roughly 3% per year

*2009, Euromonitor International *2006, Euromonitor International

Trend Description Favorable Unfavorable

Political Regulatory Environment

√

Economic Economic Down Turn

√ √

Social Going Green √Technological Online Shopping √Technological Online Social

Networking√

Macro Trend Analysis Summary

Overall Assessment: Moderately Favorable • Footwear is a necessity• Must be replaced often• Large customer base• Slow but steady growth• Opportunity for focused online marketing • Favorable social trends towards re-usable

products

Macro Market Summary

SUPPLIERSLow

RIVALSHigh

BUYERSLarge Chains: HighSmall Retailers: ModerateOnline: Low

SUBSTITUTESHigh

NEW ENTRANTSModerate

BARRIERS TO ENTRYModerate

?

Industry Attractiveness

Industry Trends

Summary Assessment: Low Attractiveness• Consolidation among wholesalers and retailers• Discount stores surpassing specialty footwear outlets• Retailers beginning to bypass wholesalers

ImplicationsInnovative products can find success (e.g., Crocs, Heelys)

• Must be even more thoughtful about strategy• Design strategy (IP)• Channel strategy

In summary…• Kids want variety; parents want value• Appetite for customization• Market is moderately attractive• Industry is unattractive• Will continue to research micro market to

strengthen our value proposition• Business model development will be crucial to

overcome industry unattractiveness

Conclusion

Appendix

CROCJibbets

CustomConverse SNEAKART

• Strong word-of-mouth.• Loyal customer base

• Break easy• Warm weather only,

limited activities

• Many activities• Any season, any

weather.

• Established brand.

• Difficult online setup• Limited to colors.

• Many styles, accessories• Share and swap.• Online social network

• Cool styles, make your own styles.

• Use with any shoe.

• Hard to Adhere• Fall off easy

• Easy to attach, remove• Durable

PROS

CONS

SS B

ENBenefits over other solutions

Shoe SkinsShoe Skins is a unique system that makes footwear fun by allowing children to easily change the look of the their shoes any time they want.

The Shoe Skin System Web site mock-up

The System• The Shoe Skins system comprises a base model casual shoe

(or line of shoes) plus a removable “skin,” such as those available for laptops and cell phones.

• The skin will affix to a special surface on the shoe.• Shoe Skins will be sold separately in many different colors and

patterns and contain robust potential for licensing opportunities.