Nike’s War With Adidas Goes To The Street

The rivalry between Nike and Adidas has been growing more intense over the past several years. This trend was first observable amongst the Sneakerhead culture as collectors slowly moved towards the offerings of Adidas over Nike. With time, this became readily apparent with the overstocked shelves and steep discounting of Nike products.
Both companies are innovative in their own right, investing heavily in technology to drive their product lines. Additionally, both have been connected to their customer base and leverage that passion for marketing and releases. So where is the divergence?
As a collector, Adidas has seemingly won on a few fronts:
- Collaborations — Adidas has had a standing business collaborating with 3rd parties. As of late, they have outperformed Nike by far. From its long-standing Y3 partnership to stealing away Kanye from Nike for his Yeezy line, through a number of local, connected collaborations with curators and fashion brands around the world, Adidas does not disappoint its customers with innovative, creative new products.
- Capacity — Every sneaker manufacturer must understand supply and deliver the right amount of product to the market to both drive sales and sustain speculation and interest. While collectors hate both equally for their challenging systems for acquiring new goods, Adidas has lately been priming its position by striking balance without striking a chord.
- Comfort — for anyone who has worn the latest line of Adidas products, they are often credited by customers of both brands as the most comfortable. This isn’t enough, alone, of course, as most people wear sneakers for purposes beyond their design and will sacrifice for style. Given the first 2 considerations, this is just icing on the cake.
Meanwhile, Nike, has been falling behind for a 2 main reasons:
- Complacency — Nike has an amazing product line with great depth. Week to week, however, this serves as a predictable platform upon which the product iterates. With more than 13 Jordan lines alone, we can see that remixes on materials and color ways are the norm, not the exception.
- Choice — Nike has tremendous product breadth lending itself to hundreds of product choices at any given time. Given all these choices, customers can either find themselves unable to choose or opting to wait as more options will be available in the near term.
Not just collectors and customers are noticing, however. Yesterday, the Street made it known as well:
The competition between Nike and Adidas is getting crazier.
The largest sportswear maker was downgraded from “buy” to “hold” by Jefferies analysts in light of “intensifying US competition” from main competitor Adidas.
“The athletic footwear cycle and Nike brand power are strong, but the competitive landscape should make share gains and margin expansion elusive,” CNBC reports, citing Jefferies research.
Adidas has successfully avoided downward trends in the athletic shoe and apparel markets. The brand’s innovation and redesign efforts are now hurting Nike.
“Adidas has been successful in leveraging the spark from its fashion retro footwear resurgence into other categories like running and athletic apparel,” the note reads.
Source: “Nike’s intense rivalry with Adidas just escalated”, Business Insider
Naturally, this battle is far from over and neither party has a lasting advantage. Consumers are fickle and it is even easier to over-extend any specific tactic. For example, Adidas fans are already complaining about saturation on some of their product lines.
Nike and Adidas must continue their strong innovative practices and leverage the strong communities of customers and collectors that surround their brand to spot new trends for the future and paths to sustainability.
