Christopher Hufnagel, left, Ainslee Neitzel and Banks find the looser atmosphere in the Lighthouse to be more conducive to innovation and collaboration. Photo by Michael Buck
(As seen on WZZM TV 13) Successful footwear brands will need speed to win in the increasingly fast-paced industry.
“It used to be the big ate the small; the future is going to be the fast will eat the slow,” said Christopher Hufnagel, senior vice president of strategy for Wolverine Worldwide.
Hufnagel said brands that will succeed are the ones that will be able to speed up their entire process, from development to manufacturing to shipping, ultimately getting new products into the hands of consumers faster.
Rockford-headquartered Wolverine Worldwide plans to be fast.
“We really are focused on accelerating innovation and accelerating getting closer to the consumer, and we are looking to accelerate that movement and to becoming a more consumer-centric organization,” Hufnagel said.
In its aim for speed, Wolverine recently completed its first innovation and consumer hub by converting a former warehouse space on its Rockford campus that had lain dormant for several years.
Dubbed the Lighthouse, the 15,000-square-foot space now houses the company’s strategy group, Merrell brand, learning and development center, advanced concepts team, materials library and its consumer focus group suite.
Approximately 80 employees are housed in the Lighthouse.
Hufnagel said the goal of the Lighthouse is twofold: first, to attract and retain talent and second, to spur innovation by having that talent located in a collaborative setting.
“We’ve always been striving to create an amazing place to work and good work environments,” he said. “And, obviously, with the war for talent, how do you create great environments to be able to recruit people to?”
The innovation and consumer hub has a modern feel with open workspaces that promote enhanced collaboration between the teams housed there. It also has private enclaves for employees who need privacy or quiet.
Hufnagel said the design is similar to other Wolverine offices, so it is consistent throughout the organization.
“The teams have loved moving here,” Hufnagel said. “They love the collaboration and cohabitation. It’s been a great success, and it’s only going to get better.”
One of the most exciting elements of the Lighthouse is the consumer focus group suite. The first floor space is separated by a one-way mirror, which allows teams to observe consumer groups as they view new products, displays and advertising.
Hufnagel said as Wolverine strives to get to know its customers better, it has increased its use of focus groups dramatically.
“The company really doubled down in consumer insights in 2015, and then again in 2016 and in 2017, and we’ve gotten a lot of rewards and benefit from being a more consumer-centric organization and working closely with our brands,” Hufnagel said.
He said, ultimately, Wolverine is focused on solving consumer problems.
“Innovation is one the most important things as an organization, and we think the Lighthouse and this effort is going to be a catalyst for that,” he said.
Hufnagel said the focus group space already is booked through April, pointing to the necessity of such a space.
The company’s advanced concepts team also has its own space for testing virtual reality tools, 3-D designs and prototypes, and other emerging technologies. It’s conveniently located near the materials library.
Hufnagel said digital disruption has been one of the most disruptive forces to hit retail and will continue to be as new technologies emerge, giving consumers even more power in buying.
He noted the advanced concepts team recently led a project testing virtual reality options — an area that many people believe will be the next big thing for shoppers.
“We’ve done tests where you put on the VR goggles and walk through a virtual store. You can walk up to a wall or table and pick up the product and examine it, and ultimately, it takes you to the website to make a purchase,” he said.
Hufnagel said while digital disruption presents a challenge, it’s also an opportunity for brands that can adapt quickly and present consumers with the shopping experiences they want.
Hufnagel said another big area of interest for brands is increasing data collection.
“Data collection and being able to manage that is one of the most important things that is happening right now,” he said.
Data collection allows brands to know their consumers better.
Hufnagel said Wolverine will be launching an integrated consumer database this summer to manage consumer data.
“At the end of the day, brands that will win are successful at solving consumer problems. How do we know more to solve more problems and be at the top of their list for shoes, apparel or bags?”
Wearable technology goes hand-in-hand with the opportunities for data collection.
Hufnagel said shoe manufacturers and apparel makers are looking for ways to embed technology into their products.
“Embedding the technology in your shoe or apparel — how many steps, heart rate, speed, calorie burn, how fast you are running — those are all important trends that are happening right now,” he said. “We have brands that are looking into that. The tech guys and the athletic players are really driving it right now. But we will see more of that. The trend is not going away.”
He expects more partnerships between brands and tech organizations will emerge in the shorter term as a result.
Hufnagel also talked about the coming year for Wolverine’s top three brands: Merrell, Sperry and Saucony.
“We are very bullish on Merrell, Sperry and Saucony; each of those brands are leaders in their own right,” he said.
He called Merrell a jewel in Wolverine’s portfolio, noting the brand was acquired in the 1990s and has grown to be one of the biggest brands in the industry.
“We think Merrell lines up really well to emerging consumer trends, the sort of outdoor, healthy lifestyle, wellness and community experiences,” Hufnagel said. “Those are great tenets within the Merrell brand.”
He said Merrell also is on the cutting edge of innovation, noting its recent awards for the Arctic Ice Grip, a proprietary sole that is activated by the cold and provides three times the traction on slippery surfaces.
The outlook for Sperry, Wolverine’s boat shoe brand, also is good, as long as it can diversify.
“We acquired Sperry in October 2012. It’s the leading causal brand domestically,” he said. “About 90 percent of its business is still done in North America.”
He said Sperry has over 60 percent of the domestic boat shoe market.
“Growth for Sperry will come by diversifying beyond the core boat shoe,” he said.
He noted Sperry’s duck boot is experiencing great success.
“In 2015, it was the No. 1 boot in its category in the United States,” he said.
Sperry also is anticipating big things from its recent Seven Seas collection.
“The biggest launch in Sperry history is going to be the Seven Seas collection, launching on Feb. 1,” Hufnagel said. “It is a modern interpretation on the boat shoe, and consumer and retailer response has been fantastic.”
He said Saucony also has a bright outlook, both for its technical running shoes and in the growing “athleisure” market, where the brand’s retro sneaker is seeing positive growth.
“Athleisure is one of the most dominant trends right now,” he said.
Hufnagel thinks there is good growth potential for Saucony outside of the United States, as well.
“Saucony’s business is about 60 percent domestic and 40 percent outside the United States, so it has good runway outside of the United States.”
Again, Hufnagel emphasized what it will take for all three brands, as well as the rest of the Wolverine Worldwide portfolio, to stay on top in the coming years.
“It’s innovative products, telling great stories and speed in everything we do,” he said.