The Adidas athletic shoe and clothing brand is surging in the United States, right past rivals like Nike and Under Armour, which have owned the market for years. According to the most recent sales figures, Adidas continues to enjoy double-digit sales growth in North America, well ahead of other popular shoe and clothing brands.
How is Adidas coming into the U.S. and whipping established brands? Market analysts have a lot of ideas about this, but one of the key factors has definitely been solid consumer PR and celebrity endorsements.
One of the biggest issues companies like Nike and Under Armour have is that they built their shoe business on specific applications. Nike, with basketball, cross-trainers and golf shoes, and Under Armour following a similar path. On the surface, that seems to freeze out Adidas, a company that is more well known for soccer than basketball or golf.
But Adidas powered its surge by tapping into another consumer trend, the growing appreciation for different styles of casual footwear. Men, especially, wanted something between running shoes and wingtips to pair with jeans or shorts. Adidas answered the call with Stan Smiths, Superstars, and Pro Models.
These styles, somewhere between traditional men’s casual shoes and sneakers have exploded in popularity, thanks in large part to connections to Pharrell Williams and other celebrity endorsers. And it’s not just working in the United States. Adidas saw a double-digit jump in global sales as well. Though the figure was about half what they saw in the United States, that kind of increase over that large a consumer market is a big win.
This is especially troubling news for both Nike and Under Armour, companies that both posted losses in the most recent quarter. Of course, there are other numbers that are not so flattering to Adidas. The brand is still virtually dwarfed by Nike in the United States, a company with gross domestic sales numbers more than three times those of Adidas.
But, really, it’s the trends that should be concerning each company. It’s one thing to have a massive market advantage, but it’s something else when the competition is gaining so quickly… and something more when that same competition seems to have its finger on a pulse your company can’t quite find.
Such is the case for Nike versus Adidas, at least for now. And if Nike doesn’t come up with any new ways to connect with a consumer public that is increasingly looking for other options, this trend could easily continue.
Ronn Torossian is the CEO of 5WPR