STEVE MADDEN WORD COUNT: 2,024 HEATHER MCCORMAC 1709357
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STEVE
MADDEN
Word Count: 2,024
Heather McCormac
1709357
“Our main mission is to consistently deliver trend right designs to our
customers. To further build our business, we will leverage our
tremendous brand equity, dominant position in fashion-forward
footwear, and industry-leading design team and will work to ensure that
Steven Madden, Ltd. emerges as a global lifestyle branded company.”
-Steve Madden
INTRODUCTION
This report focuses on the brand Steve Madden, with specific detail on the role of a merchandiser.
Steve Madden was started in 1990 out of the trunk of a car and a $1100 investment. Today it is a
worldwide shoe company inspiring people to be daring and expressive through style by operating in a
business to consumer model. The headquarters are in Long Island City, New York, where Steve
Madden started the business. There are 129 full price stores and 52 outlet stores operating in the US,
Canada, and South Africa. Products can be bought in department stores and online in over 80
countries throughout the world (Reuters, 2017). They are considered a high-end fashion retailer, with
multiple diffusion brands, these include Madden Girl and Steven. They have also bought many
companies in the past years, such as Dolce Vita and Betsy Johnson. The main product sold is shoes,
but they offer a wide variety of accessories too. Revenue has continually grown year after year, the
estimated earnings for 2017 are expected to reach $1485 million (Retail Index, 2017). In 2016 they
controlled 2.4% of the US women’s footwear market (Seeking Alpha, 2017). Steve Madden is known for
their creative and unique take on making simple pieces part of statement and trendy outfits. They take
the trends of the season and turn them into pieces at a more affordable price. In today’s market, they
allow a wide variety of shoppers to purchase their items due to the different brand segmentation. They
also have been increasing their menswear options to provide new fashion choices for men.
PRODUCT SALES
Accessories 19%
Shoes 81%
PESTEL ANALYSIS
The macro environment ‘refers to the wider situation impacting on all businesses. The
macro environment is outside a company’s direct control’ (Posner, 2015, p. 66). To fully
evaluate the micro environment a PESTEL analysis is used, ‘the PESTEL analysis
ensures an organization is responsive to the political, legal, economic, social, cultural
and technological situation at any given time’ (Posner, 2015, p. 67).
• Producing and exporting goods while having the US as the
Political home country puts them subject to changing tax
regulations.
• After being charged for fraud, they must be careful to not
make the same mistake again. Certain relationships were
strained after being released from jail.
• Potential problems to arise within European stores and
Economic online sales after Brexit occurs.
• Competition continues to grow in a fast fashion market,
allowing other companies to compete with fast turnaround.
• Overall economic declines will result in less purchases.
• Edgy women wanting the runway looks at a fraction of the
Social cost turn to Steve Madden for fast but trendy fashion.
• Steve Madden spent time in jail hurting the image of the
brand, causing negative media coverage.
• Consumers have had an increasing demand for luxury
labels and are willing to splurge on higher priced items.
The PESTEL analysis focused on Steve Madden points out key macro factors affecting the brand. Politically,
taxes must be considered when exporting and importing products to different companies. After Steve
Madden was charged with fraud and stock manipulation in 2002, they have been under more pressure than
ever to abide by laws and regulations. While in jail, the brand used marketing tactics to gain a rebellious
following of Steve Madden, multiple ads were released with hidden messages to free Steve and mention
some of his jail mates. Economically, the current relationships with other countries economic states will
impact demand and currency exchanges. The implementation of Brexit will cause a shift in the consumer
preferences in Europe, potentially affecting the sale of Steve Madden shoes and accessories negatively.
Socially, the target edgy women supported these nods towards jail, whereas a more conservative group
may not have. The new demand for luxury items are causing consumers to buy one higher priced product
instead of multiple cheaper items (Lees, 2017). This could hurt Steve Madden since they carry mid-range
priced products, instead of buying five Steve Madden shoes people may choose to buy one luxury item.
• Steve Madden has capitalized on reaching a younger crowd
Technological through social media. By running contests, having fast
customer service, updating orders online and through
email, and creating new content other than shoes they
reach their target market in new ways (Knight, 2016).
• The Omni channel approach creates more ways to connect
with consumers, with online, in app, and through other
retailer purchase options.
• High ROI email allows the customers to be more accurately
advertised to (Cascone, 2017).
• The large factories that the products are made in can often
Environmental have a harmful effect on the environment, it is important
they stay up to date on their factories and the pollution they
cause.
• Many fashion companies have gone 100% faux fur, Steve
Madden has yet to join. This could cause backlash and
boycotting soon.
• Relationships with other countries can determine the
Legal custom laws and importation law.
• Safety laws for large manufacturing factories can cause
bad brand image if not followed by the company.
• Multiple lawsuits have taken place against Steve Madden
for copying designer shoes and accessories.
Steve Madden has used technology to their advantage in many different aspects. They reach customers through
numerous platforms including Instagram, twitter, Facebook, and Pinterest (Knight, 2016). Customers can buy products
from Instagram, their app, or on the online store. They also use an email program sending specific emails to their
customers based off their recent purchases and what they view on the website (Cascone, 2017). The environmental impact
large companies have on the environment has been a growing concern over the last few years. It can be assumed the
shoes are produced in non-environmentally friendly factories since they will not disclose any information about their
factories other than being in China (Made in China, 2012). They also still use real fur, which has been a large media
concern lately. Following in brands footsteps such as Michael Kors and Stella McCartney would help both the environment
and the brand image. Finally, the main legal issues effecting Steve Madden are related to laws with labour and
regulations. Outsourcing production to third world companies can often result in cruel treatment of employees.
Importation laws to other countries can affect the ability of sales as well. Steve Madden has also been accused multiple
times for copying the work of luxury designers, multiple law suits have occurred over the years for shoes and handbags.
SWOT ANALYSIS
The micro environment refers to ‘factors that impact more directly on an organization and affect its
ability to operate within its specific market’ (Posner, 2015, p. 70). A SWOT analysis is used to ‘audit
the internal strengths and weaknesses of a business enterprise and identify external factors that
might provide potential opportunities within the marketplace and business environment (Posner,
2015, p. 101).
Strengths Weaknesses Opportunities Threats
• Omni-Channel • Replication • World Expansion • Competition
• Fast Market Speed • Low International • Asia • Young Market
• Retail Channels Presence • Celebrity Publicity • Secondary Retailers
• Diffusion Brands • Brand Image • Menswear
Steve Madden has multiple strengths that have helped it become a successful shoe company. Their
omni-channel presence allows a greater audience to be reached. This is particularly helpful when
reaching new countries. Although there are only physical stores in 4 countries, they can ship to over
30 and continue to expand. The promotions they advertise are often fun and innovative, reaching
their target audience of young edgy women effectively. Steve Madden as an individual is also great
at making connections with young artists of today, creating connections through both business and
shoes. To keep their customer’s satisfaction high, they have a fast speed to market ability. Often test
runs are done on shoes in Brooklyn stores before they are placed in stores. By having shoes in
Steve Madden stores, department stores and other retailers they can reach a broader audience that
might not have access to the products otherwise. Finally, the large number of diffusion brands and
other brands they have acquired help them to reach different markets than the normal brand. Such
as Freebird reaching a wealthier and more western crowd, while Madden Girl allows people with a
less disposable income to buy products.
They currently have a weak international presence with physical store in only 4 countries. This
gives them the opportunity to expand into different areas. Asia is a particularly good place to be
exploring because of their booming economy and new interest in fashion. Steve Madden also faces
heavy criticism for replicating luxury items at a fraction of the cost. Multiple law suits have
occurred for this copying, the latest being from Valentino over a handbag (Allure, 2017). This, as
well as the young target audience, can cheapen the image of products. An opportunity to fix this
would come from targeting an older and wealthier crowd instead of just young and edgy women.
Diving into the menswear market would help Steve Madden reach a new market, as well as change
their brand image. While they do already have a menswear sector, if more effort was focused on it
they could increase profit and be known for more than women’s shoes. Both their men’s and
women’s shoes can usually be found in secondary retailers such as Ross or Marshals, hurting the
perception of the brand and the product.
ANSOFF MATRIX
• SM Pass is a loyalty program that was introduced in 2016, allowing an accumulation of points to earn you rewards and coupons. Making
purchases and interacting with Steve Madden on different social media platforms earns points. This gives current customers an incentive to
continually come back (Steve Madden, 2017)
• Employee discounts are given, varying in percentage based on the product and brand being bought. Steve Madden also partners with 1-800
Flowers, Plum Benefits and New York Sports Club to allow employees to obtain a happy and healthy lifestyle.
Market Penetration • Acquiring and buying other companies gives their current customers more options within the same product categories. Betsy Johnson and Dolce
Vita are similar in price range to Steve Madden, providing current customers with alternatives while still giving Steve Madden profit from the
purchases.
• Continuous expansion has been done through expanding their online channel. This allows current customers shopping in store to have even more
options online and more likely to purchase items they don’t have access to in their geographic areas.
• Expansion in Asia, Europe, and Dubai would expand the market Steve Madden can reach. In these markets consumers are interested in the
Market Development products being sold, making this an easy growth option.
• Men’s fashion is currently the fastest growing sector in the industry. Providing more trendy options for men would result in an increased revenue.
Changing the brand image from almost exclusively women, to gender neutral would give them an advantage.
• Originally Steve Madden was just a shoe brand, but they dove into the accessory world to produce new products. They now offer purses,
Product Development backpacks, sunglasses, socks, belts, and jewellery. Their existing market was already interested in these products, but now can purchase them
from Steve Madden instead of competitors.
• The brand owner, Steve Madden, has taken an interest to the entertainment industry. On the website, there is now a section labelled SM World,
with tabs to music, magazine, and events. The magazine is a free online link containing lookbooks, fashion advice, upcoming artists, and other
lifestyle articles. The music tab gives details about their concert series that took place in Brooklyn NY, featuring primarily female bands. There are
Diversification
also videos streaming the performances, and information about each group. Under the events tab dates are given to store openings, meetups with
Steve Madden, VIP collection releases, and the dates for concerts.
• The Wolf of Wall Street featured a character representing Steve Madden, highlighting the events of fraud that sent him to prison. A documentary
was also made staring Madden called Maddman, telling the story of his life and his company. While he did spend 31 months in prison, his
company has still seen substantial growth since then.
The Ansoff matrix explains how Steve Madden has reacted to the different macro factors affecting their environment. As
shown in the matrix, Steve Madden has taken advantage of their current market and customers by constantly developing
ways to please them. By having both customer and employee incentives they can give more options within their realm
and compete in the shoe market. Market development helped Steve Madden gain popularity, in the beginning they started
selling shoes to the grunge scene, which was very popular in the 90’s. The Mary Lou was the turning point in their
journey, reaching new scenes while keeping the integrity of the company. By beginning to conduct business in parts of
Asia and Europe they expand their market and increase revenue. Holding such a large overall share of the women’s shoe
market, they tend not to develop new products, but have found success in making accessories and jewelry that
complement their existing products. Steve Madden has is focusing on creating value for his customers through
integrating concerts, events, and magazines; they can capture the attention of the customer for longer than just in the
store. This creates a competitive advantage for the brand by becoming more than just shoes, but instead an experience.
He has also started a program called “Self Made” helping young entrepreneurs, and assists with the program “Doe Fund”,
helping ex-convicts find work after jail.
“I get my inspiration from pounding
the pavement all over the world”
-Steve Madden
JOB ROLE
A merchandiser works to create a plan that will provide financial and target information for the company
they work for. ‘One of the primary responsibilities of the merchandiser is to develop a merchandise line
plan by month and by piece count or by stock-keeping unit (SKU), a type of identification for a single
product.’ (Granger, 2012, p. 57). When designing a range plan, the goal is to ensure that ‘the range plan
checks that the right number of lines, in the right quantities, at the right price is delivered at the right time’
(Jackson and Shaw, 2001, p. 193).
Merchandising is shifting due to the fast-changing technology. Drapers (2017) suggests that in the future a
merchandiser will work alongside a data specialist to create detailed forecasted results for a range plan.
Another change occurring is the complexity of channels the merchandiser must account for. Instead of just
instore numbers, a merchandiser must be increasingly aware of the online overtake occurring. The role
has become one of responsiveness, now catering to customer wants and trying to keep up with the
constant fast pace change of trends.
Specific Skills Transferable Skills
• Determine volume drivers • Good communication
• Shop the market and competition • Attention to detail
• Design a merchandising strategy • Ability to meet deadlines
• Make purchase sheets • Conceptualize problems
• Make recommendations for financials • Work in teams
• Identify product opportunities • Leadership
• Analyze current opportunities • Presenting to groups
(Granger, 2012, p. 58.
Steve Madden’s company culture creates a fun environment for employees. They are constantly seeking
employees with a balance of professionalism and energy for their corporate office in Long Island, New
York. For the merchandising role, they are allowed creativity within the creation of a range plan to meet the
company needs of innovative and edgy style. Working at Steve Madden is a fulltime job, sometimes
requiring strange hours or coming in at a moment notice. Often a team of people from different
departments, such as merchandising, designing, buying, and Steve Madden himself, will work together to
produce a shoe within 4 hours, immediately putting it into a store and evaluating the success the very next
day. After the evaluation, it will either be put into mass production, undergo minor changes, or be cut all
together (Maddman, 2017). When applying, a bachelor’s degree, 1-3 years of experience, and knowledge
in all Microsoft Office programs is required (Steve Madden, 2017). With these requirements, the job would
be suitable for a driven individual who can combine creative and analytical skills. In the future, it will be
crucial to be able to use technology to learn the true desires of the customer for Steve Madden’s success.
Conclusion After completing this course, my knowledge of the role of a merchandiser and the business of fashion has greatly increased. As shown on my LinkedIn page (Appendix A), although I had previous experience in the retail field (working as a cashier at Target) I had little knowledge about the different levels of fashion brands and the large range of jobs that the industry offers. Examining the difference between fast fashion and luxury was particularly interesting to me, pointing out the difference between care and efficiency. The way technology is changing fashion was also relevant to the future career I could have. After completing this report my interest in becoming a merchandiser has peaked, I have applied for a summer internship as a merchandiser using my CV (Appendix B) created for this course. I have many of the transferable skills required for the job, but will continue to work on my specific skills while completing my degree. Some of the most important skills I need to improve on include creating merchandising strategies, making purchase sheets, and learning more about the financials considered when designing a range plan. After completing the personal development plan (Appendix C), I identified networking as my weakest quality, but I have already been working on reaching out to people by sending my resume and general interest to multiple bloggers and companies.
References Cascone, S. (2017) From catalogs to e-commerce. Blue Core. Available at: https://www.bluecore.com/blog/steve-madden- approaches-ecommerce-marketing/. [Accessed 15 January 2018]. Granger, M. (2012) Fashion the industry and its careers. 2nd edition. US: Fairchild Publications. Knight, T. (2016) How Steve Madden markets to millennials. Target Marketing. Available at: http://www.targetmarketingmag.com/article/how-steve-madden-markets-to-millennials/. [Accessed 3 January 2018]. Lees, T. (2017) How luxury brands are responding to increasing consumer demand. Mumbrella Asia. Available at: https://www.mumbrella.asia/2017/01/luxury-brands-responding-increasing-consumer-demand. [Accessed 3 January 2018]. Maddman (2017) Directed by Ben Patterson [Film] (US). Made in China (2012) One young man’s attempt to live for a year without anything made in China. Available at: https://madeinchinaproject.wordpress.com/2012/02/12/shoes/. [Accessed 3 January 2018]. Posner, H. (2015) Marketing Fashion. 2nd edition. London: Lawrence King Publishing. Reuters (2017) Steven Madden Ltd. Available at: https://www.reuters.com/finance/stocks/companyProfile/SHOO.O. [Accessed 1 November 2017]. Seeking Alpha (2017) Steven Madden presents at 2017 ICR conference. Available at: https://seekingalpha.com/article/4036423-steven-madden-shoo-presents-2017-icr-conference. [Accessed 4 November 2017].
Appendix A. LinkedIn Profile
Appendix B. CV My CV currently lacks real world experience in my desired field. It will be crucial for me to find an internship pertaining to fashion for me to pursue my career of choice. Developing skills in InDesign and illustrator would also help me in any design oriented job. Another area of improvement is specific skills related to merchandising. While my Excel abilities are very strong, translating them into a merchandiser setting may be challenging for me compared to my strictly business usage of excel.
Appendix C. PDP
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