By Thomas J. Ryan

“Is Vans a trend?,” Doug Palladini, global brand president, Vans, rhetorically asked at VF Corp’s 2019 Investor Day last week. He answered, “Yes, it’s a trend. The trend started when VF acquired us in June of 2004, and it continues today. So, if you believe in 15-year trends that will continue, you can believe that Vans is a trend.”

Vans expanded at an 18 percent CAGR since VF acquired the brand, and VF officials at the event predicted Vans’ CAGR growth would increase in the range of 12-to-13 percent over the next five years.

While skeptics have been wondering when Vans’ momentum will taper off, Palladini noted that Vans has continued to far exceed internal targets. In 2017, VF set a goal for Vans to achieve sales of $3.3 billion by 2021, a target beat by two years. Last year, a goal was set for $5 billion by fiscal 2023, and that goal is expected to be reached by 2022. At the event, a goal for 2024 was set at $6 billion.

Broadly, Vans is just reaching more global consumers. Said Palladini, “And we’re not doing this by trying to be more things to more people. We are doing this by continuing to be focused on who we are and who we were not, and to share the daily inspiration around our commitment to what we stand for, and this is allowing us to resonate more broadly to more consumers. So, more consumers, bigger business, tighter focus, and more discipline is the relationship that is driving Vans.”

Other broader growth drivers include the authenticity the brand gains with its roots in skateboarding and the expanding addressable market for the “expressive creator consumer” that Vans targets. Said Palladini, “The white spaces remain very meaningful for Vans if you consider the size of our biggest competitors in this marketplace versus where we are today. Sure, we’re proud that we’ve grown as we have, but we have a long runway ahead of us.”

Palladini spent much of his presentation discussing four unique growth drivers for Vans over the next few years: Deep Consumer Connectivity, Icons and Innovation, Expanding Next-Generation Direct-To-Consumer, and Inspire Asian Expressive Creators.

Deep Consumer Connectivity 

“Everything that we do we build around the concept of brand love,” said Palladini, who cited “brand love” as the primary reason Vans is finding success extending into apparel, backpacks and other accessories.

“Once you have an emotional connection to our brand, once you believe that wearing our brand on you says something about who you are and what you stand for, then you move very quickly from awareness to being a loyal consumer, and you will consider us for anything that we make. We find that to be true with all consumer types all over the world,” said Palladini.

However, engaging consumers “is at the very core of what we do.” And a “core competitive advantage” has been its decision to spend more on grassroots “activations” than traditional advertising.

Examples include the ComfyCush High School program that launched its ComfyCush family of footwear, as well as House of Vans and Vans Custom Culture, that encourage fans to participate with, or creates, content with the brand. Taking it up a notch, Vans on November 21 will hold its first Checkerboard Day to champion creative expression. As part of the effort, a donation of $1million will go to, which fosters creativity and entrepreneurship with children.

“We encourage our consumers to express themselves through our brand,” said Palladini. “That is what drives that emotional connectivity that we believe says so much about who we are. Being very clear about what we stand for is what is resonating with youth culture today.”

Icons and Innovation

Icons and innovation are about diversifying across categories and silhouettes to drive long-term sustainable. Said Palladini, “This diversification means that Vans is less dependent on any one product than at any time in the 53-year history of our brand. Today, we are more diversified than we have ever been as we broaden our opportunity in the marketplace.”

The primary focus is on protecting the company’s five heritage silhouettes – Slip-On, Era, Old School, Authentic, and Sk8-Hi – while also balancing demands for newness and innovation.

Palladini noted that Icon management could be implemented proactively. For example, the Era silhouette was featured with the launch of the popular ComfyCush platform, and that resulted in triple-digit growth currently for Era. On the other hand, Icon management may involve limiting supply in a defensive move when a style gets too popular. Said Palladini, “We don’t want the peaks to get too peaky. We don’t want the valleys to get too deep.”

ComfyCush was the brand’s most successful global launch to date. Built on Van’s current iconic silhouettes, the style added more functionality to create more user occasions and drove a higher price point. Vans intend to make ComfyCush a franchise. Palladini said, “ComfyCush is not a one-shot deal. And this is not a couple of shoes we put out at a high point of the year. These are things we build an entire family around as we move forward.”

Apparel, also part of the diversification strategy, is tracking toward $1 billion in sales, and Palladini estimates about 20-to-25 percent of Vans business could represent apparel and accessories. Palladini said, “Once you love Vans, you move from awareness to loyalty very quickly. You’ll consider anything from us.”

Expanding Next-Generation Direct-To-Consumer

Vans had a store outside Paul Van Doren’s factory when he founded the brand in 1966, and retail has always been a significant part of Vans’ out-reach approach. With more than 2,000 mono-brand locations globally as well as online, direct-to-consumer currently represents more than 50 percent of Vans’ sales. Said Palladini, “These are the forerunners of what our brand stands for. They allow us to tell our brand’s story, and that’s both in the physical and digital environments.”

At physical retail, Vans is expanding its format to offer a wider variety of experiences and support product segmentation. Newer forms range from the Vault aspirational boutique that opened earlier this year on the Bowery in downtown New York with more planned. An example of a Brand Showcase store is the Vans location in New York City’s Herald Square with two more planned this year in Gangnam and on Oxford Street in London. These outlets complement Vans’ traditional stores in malls and at factory outlets. Said Palladini, “That same hierarchy we’ve created in wholesale that allows us to reach different types of consumers, from the most aspirational to the most value-oriented, is now mirrored on the direct-to-consumer side of our business as well.”

Online, the goal is about creating compelling brand experiences through engagement around launches and other events as well as through customization. Also available in-store through QR codes, customization is expanding to another level with the ramp-up over the last year in user-generated content where fans upload their art or photography. Said Palladini, “It’s evident to people that part of enabling creative expression is allowing you to express yourself through the product that we make, both literally and figuratively.”

Palladini also talked about the success of the Vans Family rewards program that’s tied to access and experiences rather than discounts in typical loyalty programs. He said, “It’s resonating. It’s working. In the United States, we are tracking toward 11 million fans by the end of this year.”

Inspire Asian Expressive Creators 

Finally, the fourth growth driver for the brand is “distort to Asia,” accelerating growth in China.

As it does in all regions, the goal is to inspire Asian expressive creators through activations such as skate parks, House of Vans and Vans Custom Culture. However, those activations are being amplified through partnerships with platforms such as Alibaba, Tmall, WeChat, and Tencent. Said Palladini, “The House of Vans event that reaches a few thousand people in Shanghai, is amplified to tens of millions of people through the way the stories are told through these platforms.”

As far as messaging, the key is “global consistency with local relevancy,” according to Palladini. For the global launch of ComfyCush, for example, local slang was used in Shanghai, and local ambassadors were used in other parts of Asia to get the word out. Added Palladini, “It is really that balance, that combination of global consistency with local relevancy that serves as proof to those consumers that this is the real thing, but still we understand who these people are. It doesn’t matter if you’re in Toronto or Singapore, you’re going to get that same message that we understand who you are.”

Vans’ growth potential in Asia was underscored by a chart showing two primary competitors, presumably Nike and Adidas, having significantly more stores across the region. One has 17 times more stores, and the other ten times more. The chart also showed that Vans has only 50 percent aided brand awareness across Asia versus about 90 percent each for its two largest competitors. Said Palladini about China, “We are nowhere close to our biggest competitors in awareness in this must-win country, and we will get there. All of that white space is future growth for our brand.”

The five-year outlook for Vans includes:

Overall: The new 2024 global revenue target for Vans is 12-to-13 percent CAGR from 2019. A double-digit CAGR is expected every year.

Region: The fastest growth is expected to come from the APAC region, at a 19-to-20 percent CAGR over the next five years, followed by the U.S., up 11-to-12 percent and EMEA, 9-to-10 percent. Non-U.S. Americas is expected to see CAGR growth from 5-to-6 percent with the slower growth tied to a change in the business model in South America. By 2024, the U.S. region is expected to remain at 58 percent of Vans’ sales; EMEA to shrink to 18 percent from 20 percent in 2019; APAC to increase to 18 percent from 13 percent; and non-U.S. Americas to decline to 6 percent from 9 percent.

Channel: The fastest growth is expected to come from DTC Digital, expanding at a 30-to-31 percent CAGR pace through fiscal 2024. DTC Store is expected to grow at a 9-to-10 percent CAGR boosted by a 5-to-6 percent increase in store count. Wholesale is expected to expand at a 7-to-8 percent CAGR. By fiscal 2024, DTC digital is likely to jump to 23 percent of Vans’ sales from 11 percent in fiscal 2019, and DTC stores to shrink to 37 percent from 42 percent. Wholesale is projected to be 40 percent of sales in fiscal 2024, down from 47 percent in fiscal 2019.

Category: Heritage footwear silhouettes are expected to expand at a 10-to-11 percent CAGR over the next five years, Progression footwear silhouettes, 15-to-16 percent and Apparel/Other, 14-to-15 percent. By fiscal 2024, Heritage styles are projected to shrink as a percent of sales to 64 percent from 69 percent in fiscal 2019, Progression is expected to grow to 15 percent from 13 percent and Apparel/Other to reach 21 percent of sales from 18 percent.

Photo courtesy Vans