Nike VS Adidas: The Crisis Behind The Trend In The Past 20 Years

With the public's passion for sports, leisure sports will become a new market segment, and product development will also be based on this new consumption scenario.

After three years of growth in Adidas's revenue growth, in the 2018 fiscal year, Nike finally beat 3.28% of Adidas's growth by 5.96% of revenue.

The good news hasn't been long yet. In the February 2019 NBA2019 draft, the Nike shoe soles worn by the top champion Cai en Williamsen were directly shedding, resulting in sprain of the right knee, and the Nike shares were also hurt.

Nike has always been a strong leader since 2010, and it has been fighting for years with Adidas.

But the competition began to differ in 2015.

In 2015, it was cold and bitter in February in New York, but it did not mean people's enthusiasm.

On the New York fashion week, Kanye West spent the afternoon in the first fashion platform for him and Adidas, the Yeezy Boost 750 sports shoes with a sense of future.

"We don't mention another company's name, do we?" we are no longer wearing the equipment of another company, right?

Another company, of course, is Nike.

The response of the crowd to the tsunami is a sign that Adidas will have a good year.

In 2013, Mr. Kan split up with Nike and turned to Adidas.

In 2015, this Yeezy product integrated Adidas's popular Boost midsole technology, fashion traffic + Black technology, making Adidas's 2015 full of expectations.

This expectation is related to the decline of Adidas in 2014.

In July 31, 2014, Adidas issued a global financial warning.

In the second quarter, Taylor Adidas's golf business declined by 18%, coupled with exchange rate fluctuations, the impact of political conflicts in Ukraine and the high marketing costs of the 2014 FIFA World Cup, all of which offset the contribution of Adidas's main categories and markets.

In the end, revenue in fiscal 2014 increased by 2% compared to 2013 in fiscal year, 14 billion 534 million euros, 7% in North America and 1% in gross profit.

In Russia, the sales of golf low - margin products, exchange rate and high - cost investment have become the killer of Maori, and the two years' performance has slowed the "road to 2015".

With the support of Boost technology, Adidas began to shake off Nike in growth.

The two competition has also entered a state of white heat. Both technology, operation and fashion design have entered the "nanoscale" battlefield.

Part one

Fashion war

The trend of fashion has always been erratic.

Whether it is Nike or Adidas, the two sides repeatedly repeat your high and low time in the fashion sense competition.

According to the NDP Market Research Report, the total sales of sports shoes in 23 cities in China amounted to 59 billion 800 million yuan in 2018, and sports shoes were not a small business.

Bill Cunningham, a famous fashion photographer in New York Time, once said that sports shoes for men are like fashion bags for women. This is a very important expression of BillCunningham.

But the trend of fashion has always been erratic.

Whether it is Nike or Adidas, the two sides repeatedly repeat your high and low time in the fashion sense competition.

In the mid 80s of last century, Nike released Air Force 1 sneakers.

The shoe was the first professional shock absorber to help athletes perform better.

But unexpectedly, it has swept the Harlem and Bronx of the black area of New York, becoming New York's street shoe, and gained the nickname of "uptowns".

This unintentional action has created an example of the integration of sport and design, linking Nike with the culture of New York.

Nike is keen to capture the commercial value of the two combinations. These tens of millions of dollars worth of sports stars are the trend vane of the times, and also the king of goods.

Nike CEO Mark Parker joined the company as a designer in the 70s of last century. He firmly believed that design thinking would inject infinite momentum into the company.

In Nike's long designer shoes, there are Dunk Hi x Comme des Gar on, which is collaborated with Wakubo Rei, to express their hearts through a pparent upper pair of socks. The Dunk Lux Lux series is launched jointly with the former director of Givenchy Riccardo Tisci, to improve the sale of the luxury leather version, and the latest version of the air force one is released in collaboration with the designer of the famous brand of the earth's most powerful brand.

Nike has more than 650 designers who want their partners to expand their boundaries. Nike also loves loyal customers. They can always interpret the most fashionable trend of their sports shoes in their own way.

In the past 50 years, Nike has been deeply influenced by basketball culture. It has clearly outlined how basketball culture affects street fashion imperceptibly.

Facing the huge market opportunity of sports and leisure, Adidas, who once insisted on taking the professional sports route, also started the two line operation.

In the early 1990s, Adidas stripped the sports classic (Originals) series from the professional sports series, the main sports and leisure market, and put some key sports elements more into the sense of quality, comfort and fit, and close to the modern trend.

Functional professional sports products are assigned to sports performance (Sports Performance) series and are marked by three bars.

Then it was further divided into three major series: sports performance series Sports Performance (three bars), sports classic series Originals (clover) and NEO (sphere LOGO).

In 96 years, the Adidas sports classic (Adidas Originals) was the main sport enthusiast and shoe enthusiast in the middle and upper class.

Sports and leisure market is fragmented, larger scale, higher profit and faster growth than professional sporting goods market. Adidas has a special motion gene, which makes it more obvious than the fashion brand trying to enter this field.

For this reason, Adidas has set up a Sports Style team dedicated to the operation of Sports Classics and Neo.

In 2002, Adidas opened its cooperation with KENZO Y-3 business and set up an image in a highly competitive fashion circle.

Adidas not only brought Y-3 to New York fashion week, but also opened it in high-end department stores and opened self retailing stores.

These attempts soon saw the effect. In 2007, "sports fashion" accounted for 20% of Adidas's brand revenue and continued to expand.

In fact, Adidas's way of joint cooperation is earlier than Nike.

In the seventy century of last century, Adidas signed Stan Smith, the tennis player of the US Davis Cup. He is the legendary tennis character of the United States. The two sides pioneered cross border cooperation through the mode of "signing the contract and distributing profits according to proportion".

In 1971, the history of the first pair of signature shoes Stan Smith came out.

The Stan Smith logo green tail shoes are also the originator of the popular little white shoes.

So far, Stan Smith has sold forty million pairs of shoes.

Today, this shoe belongs to the Adidas sports classic series, and has become the street trend sign all over the world.

In 2014, Phoebe Philo, the main designer of Celine, wore a pair of small white shoes on a show to take the curtain, and then picked up the trend of little white shoes.

With the help of various marketing methods, Star Street, Adidas provides limited edition to ordinary consumers, helping companies win the sales of about 30000000 pairs of shoes in one fell swoop in 2014, becoming the mainstay of the year.

Stan Smith in Adidas is like air force one in Nike, precipitating the brand's history and culture.

Another explosive product is Adidas's Superstar series, founded in 1969.

In 1983, a rap band of three people, a traditional rap band, dressed in a Superstar without wearing a shoelace and a tongue with hallux valgus, appeared on the stage. It was seen by Adidas employees. Inspired by this, the two sides launched a lot of promotional cooperation. Since then, Superstar has become the fashion trend of young people, and the shell head has become a symbol of classic design.

In 2016, sales of Superstar increased by six times, becoming the best selling shoe in the US market, replacing Nike's monopoly for ten years.

Stan Smith increased by five times.

The ups and downs are also related to Stan Smith and Superstar.

Adidas's 2018 earnings report shows that Europe is the only region with no share growth. The reply from the global CEO Kasper Rorsted to reporters is, "we are over reliance on the classic sports series, and Stan Smith and Superstar are down more than 500 million euros from last year's sales.

These sub brand series are cyclical, floating up and down.

Stan Smith is a series that appeared in 70s. It is normal that it goes through such a cycle. "

Trend opportunities

The fight between Adidas and Nike is always the focus of sports.

In 2000 ~2005, there was little difference between the two sides.

However, after Adidas misjudged the situation after the 2008 Olympic Games, a large number of stocks could not be digested. In 2010, Nike dropped Adidas far behind.

At the end of 2010, Adidas announced the "2015 way" development strategy, aiming to increase sales by 45%~50% in the next 5 years.

If we look at the nine years from 2010, 2015 is the turning point of Adidas, in the next three years, although Adidas's total revenue is less than Nike, its revenue and profit growth is far ahead of Nike.

In addition to the sales of 8 million pairs of Stan Smith in 2015, the success of Yeezy's Boost series has brought positive market impact.

Yeezy Boost750 priced at $350, limited 9000 pairs, took the lead, pushed Yeezy Boost350 again in June, fanatical fans were queuing up all night waiting outside the store, triggering a huge topic discussion in social networking.

This year, Adidas has the characteristics of being more fashionable as a sport shoe.

But fashion turns, how hard it is to predict the vitality of Yeezy Boots as a fashion product.

Adidas will not only bet on a single item. It will launch a retro version of the Falcon and Yung 1 designed in the 90s of the last century.

This makes the traditional classic series shine in 2015, becoming the driving force of sports shoes culture, maintaining double-digit growth every quarter.

Kasper said, "this year, Adidas will launch 20 Yeezy products and insert some limited styles in it."

This practice has changed the practice of pushing several new products and limiting sales in the past.

However, the degree of eyeball caused by scarcity and the paction price of secondary market will not be withered, so it is hard to conclude at the moment.

But at least in the fourth quarter of 2018, according to NPD group, Adidas YEEZY's sales increased by 600%.

The trend of sports shoes has become a great driving force.

Due to the rapid development of sports and sports culture, Adidas is targeting the key users and influential people, creating the brand's desire through well-designed consumer segmentation strategy.

These consumers are distributed in six categories: male athletes, female athletes, young creators, streetwear hound, amplifier, and value consumers. These are not independent groups.

In these lattices, the key is to win the most influential consumers, who are defined as creator archetype.

They focus on new trends and live, play and work in the most influential and richest cities in the world. This is also one of the key factors for Adidas's "urban strategy".

In early 2015, Adidas changed its sponsorship strategy, ended its 30 year cooperation with the Chinese Football Association, and signed a 3 year cooperation with the Chinese Ministry of education to speed up the development of Chinese campus football.

The promotion of campus football to at least twenty thousand characteristic football schools across the country will benefit 20 million students.

And the game behind this is bigger. These young people need more functional sports products and fashion products. They will also be the backbone of future consumption.

This coinciding with the development demand of Adidas's professional and fashion two lines.

Some commentaries said, "Adidas is enlightened."

Lost in the East.

Nike has repeatedly returned to the public view through multi-element design, and launched a joint name with the designer Virgil Abloh of Chao brand Off-White, reclaiming the popularity of many players, and playing a crossover with Supreme and other tide cards.

It is undeniable that both sides believe that footwear is the most influential brand category, which can drive consumers' purchase intention and have a huge impact on market share.

Both Adidas and Nike have made subtraction, focusing on the shoe series that can make the brand truly different.

Adidas's key series include UltraBOOST, PureBOOST, Alpha-bounce, Predator and NMD. These products face consumers through symbolic design, brand story and excellent functions, but behind them are strict requirements for lifecycle management: they can cross the space and time, and product stories can be interpreted again and again.

These series are also prioritized in the value chain.

Behind the fashion war, Adrian Fenech, Nike's top brand director in North America, said in an interview, "we notice that trends and fashion trends are important, but for Nike, functional innovation is the first priority."

Kasper said, "globally, 2/3 of our sales revenue is still a series of sports performance, that is, professional sports products, and 1/3 comes from leisure and fashion sports classics.

Although the classic sports series Adidas Originals and Neo have increased, we will still position Adidas as a professional sports brand.

The industry has said that the trend of "technology is fashion" has ended in 2013, and consumers are looking at Yan value. But in fact, the contribution of technology of these two brands to Yan value is imperceptible.

Flyknit can bring rich gradation color to the vamp, the particle sense of the Boost sole "popcorn", and the Air Max crystal clear air cushion is all in fashion.

In 2019, Adidas will launch 3D printing shoes on a large scale. This is the first time that 3D printing shoes have been mass-produced.

The other is that the Parley sports shoes produced from recycled plastic waste will also be supplied on a large scale, and then the sports clothes and swimsuits will be released with this material.

Nike has also launched 3 new technology of shock mitigation: ZoomX, VaporMax and React, which will trigger a new topic in the shoe market.

Qiu Lijin, Department of marketing, School of management, Fudan University believes that with the public's passion for sports, leisure sports will become a new market segment. Product development will also be based on this new consumption scenario.

These products are endorsed by fashion designers and Hollywood stars, not all professional sports stars, and brands are digging stories in this new field.

"But the two sides do not abandon the brand because of fashion. Consumers' cognition of the two brands in the field of leisure sports is still based on the brand's movement gene and brand history."

The crisis behind the trend

These two competitors are very clear that, as sports brands, they can't be like luxury brands, only the trend of appearance without functional innovation support, otherwise they will derail into the pure fashion field, where there are not only a lot of fast fashion, light luxury brand sneakers, but also Prada, LV, Gucci and other luxury brands of sports money in sniping.

In the report on the growth engine of China's luxury market released by Bain, Bain Bruno global partners, Bruno Lannes, pointed out that consumers of Chinese millennials (aged 23 ~38) are scramble for such innovative trends as the cross border integration of high fashion and sportswear.

They are the main consumers of luxury brand sports products. The typical products include the Triple S series sneakers released by Paris family in 2017, which remained hot until 2018, and a series of accessories jointly issued by Louis Weedon and Supreme. The latter is a fashion brand rooted in skateboard culture.

Bruno explained that most of the luxury brands originated from Europe.

Europeans have a deep-rooted idea of what luxury represents, and they are something that can be preserved for a long time.

But Chinese consumers are younger, so he naturally accepts new things. Why not wear Gucci sports shoes?

Qiu Lijin believes that whether it is luxury or sports goods and tide card, actually encountered the bottleneck of the growth of the original market, hoping to create a new market through cross-border.

Nike and Adidas are the leaders and challengers of the sports market, and the rest are followers. Both of them play a crucial role in the development of the industry.

"From the perspective of the development of sports leisure market from scratch, the two brands are more closely related to competition and cooperation. From the fact that there are more of you in some markets, the reason is that the market is not big enough.

Together we can enlarge the market size and benefit from each other.

The fashion trend is uncertain. To win the competition, both sides need a comprehensive strategic combination.

The second part

War of innovation

The competition between Nike and Adidas is not only in sports technology and design, but also in digital channel, supply chain and production technology innovation.

Nike founder Phil Nate once said: "the only way to defeat Nike is to imitate us in a comprehensive and accurate way, and then find different points to break down."

Comparing the statements of the two companies' financial statements, the two countries are doing very close to what they do.

From this point of view, Adidas is trying to break at a different point.

As early as 2007, Adidas's earnings report showed that sales of Adidas brand 77% came from the new products released that year, and only 6% of sales came from products released in the past few years.

In the 2018 financial report, Nike CEO said that in the next five years, we hope that the growth of 50% will come from the brand-new concept of innovation.

Nowadays, the competition between the two sides is not only in sports technology and design, but also in digital channel, supply chain and production technology innovation.

Supply chain life and death rate per hour

The word "speed" is a key word mentioned by the two companies in CEO's 2018 earnings report, because today's trend products have evolved from fast fashion to ultra fast fashion.

In this regard, Adidas's strategy is data driven, quick insight into people's consumption hot spots, and ensure that wherever and wherever, no matter what channel, people can quickly get the desired products.

To this end, the company shifted from the pre season mode of commodity development to seasonal development, to enhance creativity and production capacity, and to ensure the supply of those hot products during the season, so as to enhance the share of total product sales.

By 2020, the group's goal is to achieve net sales of 50% through "speed", with a total sales of 20%.

Adidas embarked on a more integrated agile process, flexibly deploying production and marketing based on the sales data of the season, creating products with market focus, and ensuring that products with long lifecycle are in stock.

Speedfactory, an intelligent factory built in Germany, serves the strategy through digitalization and flexible production.

During the 2016 spring and summer new product launches, 76% of garment production time was controlled within 60 days, and most shoe products achieved 60 days or shorter supply.

But in the process of achieving this strategy, Adidas still encountered the shortage of supply chain, which led to the shortage of shoes and clothing in the first half of 2018, which affected the sales of the North American market, especially the situation that some hot products were in short supply. At present, Adidas's supply chain mainly came from Kampuchea, China and Vietnam.

For this reason, Kasper Rorsted has replaced the head of the global supply chain for only one year and redistributed the plant capacity.

Nike also pays attention to "speed".

In the November 30, 2017 earnings report, sales of Nike brand in North America decreased by 5% to $3 billion 485 million compared with the same period last year, and sales of footwear and equipment fell by 7% and 14% respectively.

To this end, Nike launched the "Express Lane" (fast lane) plan, which aims to enhance the end-to-end digitalization capability of the supply chain, and seize the sales fighter by rapidly responding to the hot market.

Nike's Retro Running Shoes Presto MidUtility, Flyknit Racer and Lunar Charge took only 1/4 of the time to go into the market.

The "fast lane" can also upgrade the template of the best seller, using the latest materials and colors, and replenish the stores within two days based on the real-time insight of the users.

This means that Nike can seize the trend in real time, enhance the proportion of products sold at full price, reduce the R & D cycle of products by half, and better manage the design, production and delivery, so as to cater to the changing market demand.

Digital combat method

At the end of March, at the opening ceremony of Adidas's Asia Pacific and greater China headquarters in Shanghai, Kasper said, "Adidas has three most important markets in the world, North America, China and digital channels.

China and North America share 50% of the global sporting goods market share.

If we fail to succeed in the Chinese and North American markets, we will not be able to achieve long-term growth.

The tactics of China and North America will be highly dependent on digitization.

In 2018, Adidas's global business channel business grew by 36%.

Greater China has more than 50%.

In 2018, sales of double 11 exceeded eighty million euros.

The goal of Adidas digital is very clear. Since sports can change people's life, it must create direct connection with consumers, and the way of linking is digitalization.

Kasper said, "the digitalization of the consumer side is first used to enhance user experience.

This experience includes access to information, including purchase, which is an entry to our product world. The digitalization of the design side is to let a country's designer do well in designing, and products can be listed all over the world; the digitalization of the operation side is to pfer the internal communication of the company through the internal social network instantly and integrate into one.

Gao Jiali, managing director of Adidas Asia Pacific, said: "in 2018, the electricity supplier channel is the fastest growing channel in China. We have cooperation with Alibaba and Tencent, and also have our own official website.

We are increasingly aware that 90% of consumers now understand products before they buy products, and then decide to buy them through various digital channels.

To this end, Adidas has established a digital ecosystem, forming "ONE" Adidas, full channel integration, 7 * 24 hours of service, and a digital center in China.

"From consumers entering our store, through face recognition, we will know who he is, online shopping history, personal preferences, salesmen can provide targeted shopping guidance services, this is a fully integrated consumption experience."

Gao Jiali said.

By 2020, Adidas's goal is to sell its own electricity supplier to 4 billion euros.

Adidas APP launched in 2017 now has about 7000000 downloads.

In the three years of Adidas's success, Nike announced the first large-scale layoffs since the financial tsunami in 2017.

Nike CEO Mark Parker once said that the power of sports has never been as deep as it is today.

In China and the United States, more than 500 million people exercise every week.

And streaming and social networking are changing the way people consume sports content, drawing the distance between billions of consumers and their favorite alliances and athletes.

Only China and India have 2 billion numbers of indigenous people.

Shopping behavior has also changed. In the mobile dominated world, consumers have unlimited choices.

They choose products that are different from each other, hoping for faster and seamless service, and no compromise between sports and fashion.

For this reason, Nike launched the Consumer Direct Offense and launched the three 2 speed plan.

That is, 2 times the speed of R & D, 2 times of production speed and 2 times of communication.

Nike will focus on its own official website nike.com, mobile APP and brand retail stores, and strive to sell products directly to consumers.

In 2017, Nike's Direct-to-Consumer (DTC) sales increased to $9 billion 100 million, up 18% from the same period last year, thanks mainly to the 30% increase in digital retail sales.

Mark Parker said: "to prioritize, Nike needs to promote growth in a new way."

If we call the focus of the two digital competition, we should return to the point of "straight customer".

Whether Nike vigorously cut down unnecessary retail partners or Adidas rebuilds app, both sides want to let customers enter their data pools, so that they can see the preferences for the first time and meet the needs of customers through the agile supply chain for the first time.

Looking back at this fashion war, Dr. Qiu Lijin said that two brands are constantly looking for new segments, such as the female market, the marathon crowd market, and the youth market. However, there is no essential difference between the technology and the original product in these markets, in the final analysis, it is marketing innovation.

Moreover, when mining these market segments, the phenomenon of competition and cooperation between the two companies is increasing.

"Consumers choose A or B, and emotional attributes account for the first place.

I bought it just because I have identity, and the fashion trend of two sports giants is to maintain and user's emotions.

Qiu Lijin said.