Shoe Skins

1. Shoe Skins Customer-Driven Feasibility Study Bristol, Cuozzo, Holz, Lyman, Patibandla, Sexton

2. Executive Summary: Shoe Skins • Research Performed and Customer Pain. • Shoe Skin System, Benefits, Target Market • Macro-Market information • Macro-Industry information • Key Learning’s and Conclusion Shoe 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.

3. Research Data Child and parent interviews Parent Survey • “I like clothes and styles that nobody else has. “ Phoebe (Age 7) 90% of parents said kids Influenced their shoe buying decision • “At school, you don’t like to be the same. You want to stand out.” Vika (age 11) 80% of the time parents will buy at a retail store • “Being different makes me feel good.” • Colin (age 8) Sneakers the most Popular shoe… • “Shoes that could change colors would be cool.” Allison (Age 8) 4) Characters 1) Sneakers 2) Sandals 3) Crocs

4. Customer Pain Kids: More choices and styles with their shoes. Parents: Having to buy multiple shoes for kids.

5. Benefits of the Shoe Skin Solution Benefits High “cool” factor with something new and innovative Offers individuality and self-expression The Shoe Skin System Variety of colors and styles Green: less shoes, recyclable skins Online social network Ability to share, collect, and trade skins Fun online games and activities Cost effective – less need for other shoe purchases.

6. Related Offerings and Expansion Possibilities Color, and pattern options truly endless. Fitness tracking: GPS, Pedometer Unique designs, match with outfit Licensing potential Limited Editions from artists Accessories (matching Laces, pins, jibbets even) Add-ons such as noises, LEDs

7. SECONDARY SOURCES Pricing 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 27.6% 35.9% $25-$35 44.8% 43.6% $35-$50 24.1% 17.9% > $50 3.4% 2.6% Potential Pricing This data supports a pricing range of $20 to $30 for the Shoe Skins system.

8. Target Market • Target Market: 5-12 age group • US Census: Estimated 36M 5-12 YO in 2008 • Composes 68% of the total $ 6.2M children’s footwear market • 5-12 YO market: $4.2M in 2009

9. Macro Market Size Macro trends indicate a huge potential for Shoe Skins beyond Children’s Shoes Market size in Volume Sales: • Growing at CAGR of 5.1% during year 2001-06 & expected to grow at 6.4% during year 2006-11 • Children’s market represents 22% of overall US footwear market • Volume sales are growing at a higher rate than value sales • Both Children’s and Women’s footwear market is expected to grow at a faster rate compared to Men’s market

10. Macro Trend Analysis Summary

11. Macro Market Summary Overall Assessment: Favorable • Easy access to large customer base • Opportunity for effective/focused marketing • Favorable social trends to re-usable and fitness related products

12. Industry Attractiveness SUPPLIERS Low NEW ENTRANTS Moderate SUBSTITUTES All Shoes: ModerateCustomizable Shoes: Low BARRIERS TO ENTRY Moderate RIVALS Moderate BUYERS Large Chains: High Small Retailers: Moderate Online: Low ?

13. Industry Trends: Our Response Summary Assessment: Moderately Attractive • Not a sure bet • Niche products • Thoughtful about strategy • Design strategy (IP) • Channel strategy • Crocs and Heelys are recent examples of specialized footwear breakthroughs.

14. Conclusion • Tell them what you told them. • What did we learn about our original idea. Bring this up here. • What is potentially the critical flaw • What is potentially the critical strength. • Questions we still have…more questions than answers?

15. Appendix

16. Who are the customers? Who is seeking the benefit? • Parents • Want durable shoes that are comfortable for the kids • Want their kids to be happy • Save money on multiple shoe purchases • Boys and Girls • Ages 7-12 yrs • Friends important • Very active (sports, dance, etc.) Who else would buy? • Companies • Access to a large target market to extend their brands. • Grandparents/Aunts/Uncle • Want their kids to have something to remember them by and like them. • Want their kids to have best, latest things.

17. Benefits over other solutions CROC Jibbets Custom Converse SNEAKART • Cool styles, make your own styles. • Use with any shoe. • Strong word-of-mouth. • Loyal customer base • Established brand. PROS • Break easy • Warm weather only, limited activities • Hard to Adhere • Fall off easy • Difficult online setup • Limited to colors. CONS • Many styles, accessories • Share and swap. • Online social network • Many activities • Any season, any weather. • Easy to attach, remove • Durable SS BEN

18. Other ideas we’re considering • Other ideas that came up during interviews. • Shoes that click, make noise • Skins that match your outfit for the day. • Theme shoes (elf shoes, princess slippers, etc.) • Shoes that bounce • chameleon shoes • Track your swapped style on the web. What are your shoes doing now? • Track fitness (How far you walked/ran today) • Others as well (see notes)

19. Current Challenges • Do we want to take on the full shoe manufacturing? Should we just stick with skins for any shoe? • Will it stay on with excessive activity?

20. Shoe Skins Shoe 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

21. 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.