Diego GarcíaProduct and Transport Designer
The world of sports footwear could be seen as something simple: brands that were born around sports, trying to make the best possible sneakers and who hire famous athletes so that people will buy their products. But the business of these companies is much more complicated and interesting and is intimately related to the design and new lifestyles.
390%. That’s the growth of Nike since 2009, achieving 86.000 million dollars in 2015. Impressive sales figures to squash their rivals, especially Adidas, which in the same period grew only 17%. In 2004 they were along, now Nike is worth 5 times more than Adidas.
But what happen during those 5 years so that the distance between the two companies has increased so much? Nike has been able to move faster than its rivals, backed by its vast global distribution network, an enormous advertising expense (more than 8.000 millions only in sponsorships since 2002), and basket market and, above all, an innovative mindset in terms of technology and design (in 2014 was chosen as the most innovative company in the world by Bluefin Solutions).
These benefits coincided with the promotion of Mark Parker as CEO in 2006. Mark is a man of the house (he has been working in Nike since 1979). His origins as sneaker’s designer and member of Nike innovation center made him understand that rely on R&D and design as a basis for success is always a good idea.
Meanwhile, Adidas did not succeed in their sponsorships, was wrong with the designs, arrived late or on badly to certain technologies (Primeknit vs Flyknit) and lost its visibility in the US market, being relegated to third in sales behind Under Armour, a newbie in the sector.
However, in the last 4 years Adidas decided to change its direction, based on design as differential factor, in a sponsorship policy more focused on the US market, more presence in popular culture and social networks sponsorships, along with a leading and flashy technology. Let’s see those changes.
In 2013 Adidas presented the soles technology Boost, reaching one of the best materials available in the market and using it for a huge marketing campaign.
In late 2013 they surprised the world announcing the signing of the musician Kanye West, until then united to Nike and who put upside down the sneaker"s world with the Nike Air Yeezy models. In 2014 they signed Pharrell Williams, on the cutting edge for his song “Happy”. Both have great influence in North America and are not only musicians, but also trendsetters with presence in the fashion business. That year, they bet on modern designs with its Y-3 division or ZX Flux and classics designs with the Stan Smith and Superstar, triumphing in both branches.
In early 2015, Adidas signed up three Nike leading designers, with the polemic complaint from Nike to the designers for alleged theft of confidential information. After all this, the results were not long in coming: Adidas has increased their sales by the end of 2015 and have good prospects for 2016.
As indicated in this analysis of Design Management (which includes Nike as a good example), investing in design and innovation reports benefits to the company. The approach to the new consumer, especially the Millennials, is the key for sports companies as they increasingly spend more on sneakers. The communication with them is not the usual, but focuses on social networks (Instagram has great power) and in the named "pop culture".
That"s the reason why during years brands do not bet just for athletes, but also for people from the "popular" sphere, which have a strong influence on young people. Apart from the aforementioned Pharrell and Kanye with Adidas, Nike and its brand Jordan sponsor Drake, one of the most successful musicians in the US, taking special editions that sell out in minutes and noisily on social networks.
Puma has joined this trend, signing up Rihanna in 2014 (who has already released a collection that was sold instantly) and recently Kylie Jenner, from the Kardashians (creating a conflict on the Internet with Kanye West) and with more than 50 million followers on Instagram and another 15 million on Twitter. Still, the success of these collaborations must be sustained by a quality and innovative product; if not, the risk is being a mere fad.
As we announced at the beginning, the world of running shoes is more complex than it may seem and creates a unique bond with the costumer, reflects their lifestyle, purchasing power and social position. Companies are no longer only brands and become an aspiration, a dream for the consumer.