FASHION
Nike vs. Adidas: The Shift in the Sneaker Industry
By: Tessa Reiner Edited By: Rezi Ubogu
While Nike has long been the best-selling sneaker brand worldwide, Adidas has recently soared in popularity. Adidas turned its brand around after its stock hit an all-time low in November 2022. It ended its partnership with Kanye West, whose controversial and offensive statements had sparked backlash, and shifted its focus to revitalizing classic sneakers by reinventing some of its older models. This strategy worked very well as sales rose rapidly in the US and internationally. Nike, while still popular, has struggled to keep up with lifestyle footwear trends, leading to declining sales.
When Adidas faced its most challenging moment, the new CEO, Bjørn Gulden, decided to remind customers why the brand was so popular in the first place. While classic shoes like Sambas and Gazelles remained available, Gulden was able to rapidly increase their popularity. Celebrities and influencers quickly got behind this fad, reminding the public that in a world of overconsumption, sometimes the simple designs from years ago are the most effective. Besides endorsements, Gulden used a very clever marketing strategy called diluted exclusivity in which he ensured that the demand for these shoes was higher than the supply, therefore securing a sense of exclusivity surrounding the brand.
Kanye West’s Yeezys had accounted for around 50% of the company’s profit, and while worrying about the financial implications of losing this partnership, Gulden also had to find a way to distance Adidas from the situation. After ending the collaboration, the remaining Yeezy products were sold with lots of the proceeds going to charity. By proving himself and the brand capable of financial stability alongside social responsibility, Gulden won back retailers’ trust and created relationships with chain brands, which helped Adidas thrive more than ever.
As Adidas soared under new management, in July 2024 Nike CEO John Donahoe stepped down amidst leadership and decision-making concerns, as Nike’s stock fell 19%. Although Nike had long been successful, its stock reached an all-time peak during the COVID-19 pandemic. Netflix launched the Last Dance documentary about Michael Jordan which created a frenzy around Air Jordans alongside Dunks. Also, the free time that everyone had to do physical activities caused an increase in Nike purchases. However, around this time Nike began seeing competition from other sneaker companies such as On and Hoka which took away a substantial proportion of their market shares. These newer brands, while offering something fresh in the sneaker industry, also appeared to be more comfortable and left customers more satisfied with the quality.
Nike has relied too heavily on its most popular shoes: Dunks, Air Jordans, and Air Forces. While other brands have been innovating new designs, or even bringing back old designs (such as Adidas), Nike hasn’t produced much recently in terms of casual footwear. Even when the brand has sought-after releases, they’re never available in physical stores, and almost always exclusive to the SNKRs app. This has caused many customers to view Nike’s distribution strategy as purely corporate, lacking care or culture.
Despite struggling in recent years, Nike remains the most popular athletic brand worldwide, owning 38.23% of the sportswear market share and surpassing Adidas in both revenue and profits. Adidas certainly has a modern edge with its designs, which are bringing in high customer satisfaction rates. However, the brand will need to work harder and expand further to fully surpass Nike.
