Will Adidas Finally Pass Nike?
by ArvindVig
After reading the blog post by Alec Banks on The Hundreds, I was intrigued by the what he was saying and I wanted to dig deeper into the war between Nike and Adidas.
For decades Adidas has been thought of as a second tier brand when compared next to Nike. Almost all of the best athletes across all sports are endorsed by Nike, and the Nike Swoosh is more recognizable than the signature 3 stripes from Adidas. However, that is slowly changing in favour of Adidas.
After dominating for so many years, Nike’s hubris has clouded their judgement and has led them to make mistakes which could see Adidas overtake the sneaker industry in the coming years. One of which was thinking that only athlete collaborations could encourage consumers to buy their products.
Kanye West has led the charge for Adidas, after having a very public departure from Nike, as they weren’t willing to compensate him with royalties from the shoes he designed. Their explanation to West was that only athletes can receive royalties from shoe sales, not rappers. Nike believed that they would be able to sustain their competitive advantage by continuing to do what had been working for so long.
While they continued to parade their athletes in front of consumers, Adidas revamped their design team, some are former Nike employees, and they worked on branding themselves as more than just an athletic-wear company. Their celebrity and designer partnerships have propelled them to a new level, and they are now being perceived as a “cool” brand by millennials. The response from consumers has been even more than what Adidas could’ve asked for.
Their new strategy has translated to a major boost in sales, 23 percent over a one-year period. Adidas has even gotten loyal Nike customers, including myself, to switch to Adidas. The switching costs for consumers to change from Nike to Adidas has never been so low, as Adidas has finally perfected the formula to grow their customer base.
Although Adidas’ product line is not necessarily of superior quality to its competitors, a strong marketing campaign, along with key partnerships, has shifted the perception of the brand within the eyes of consumers. The every-day wear that they produce is very fashionable, arguably more than Nike, and considering that a majority of consumers buy products based on preference, not necessarily to support a brand, it is easy to understand how their strategy has been so effective.
If Adidas can continue to build a lifestyle brand and separate themselves from Nike, Adidas will be the industry leader within the next decade.
Word Count: 432
Sources:
https://thehundreds.com/blog/nike-vs-adidas-saga/
http://www.oregonlive.com/playbooks-profits/index.ssf/2013/11/kanye_west_is_just_latest_non-.html
http://fortune.com/2016/08/04/adidas-outperforming-nike-ua/
This is a very interesting topic. Do you really believe Adidas will surpass Nike as the industry leader within the next decade?
Yes Sharuthan, I am a strong believer in Adidas’ ability to overtake Nike.