Nike has controlled the world of sneaker for so many years that it has come to seem invincible, especially in the US, its home territory, and the world’s biggest sneaker market.

Lately, though, some loopholes have started to rip apart Nike’s armor. For the first time, in 2016, after more than a decade, Nike did not have the top-selling sneaker in the US. That prestige went to Adidas’s retro Superstar. Retaliating to loss, Nike has laid off hundreds of employees as a downsizing move which was first announced in June and has planned to cut another 2% of its workforce, i.e. approx.1,400 people.

It has now become a topic of concern for sports-industry analysts that the Nike brand, including its premium Jordan label, is now losing its cachet. For the first time in so many years, Nike’s iron grip on the sneaker world is losing its hold.

Recently, Adidas has been the main challenger of Nike’s market

How much will it slip?

According to the analysts at Piper Jaffray, teens are deserting Nike at an alarming rate, making the brand lose between 600 and 800 basis points of market share with teens in its biannual ‘Taking Stock With Teens’ report. However, Nike continues to be the leading brand.

Stats from the research org NPD Group suggests that Nike’s US market share, including the Jordan brand, is about 44%. And Adidas, is its closest competitor, at 11%.

Teens can either make or break a brand

For Nike, teenagers have always been the most important piece of the puzzle since they are the early adopters of trends and hold a significant purchasing power, roughly $92 billion, according to the Statistic Brain.
But, today’s teens seem to be less loyal to a brand in comparison to the previous generation, making the companies work twice as hard to convince them about their product’s worth.

Teens attending Sneaker Con premier traveling event for sneaker connoisseurs to buy

Nike knows that it’s not the only one who is feeling the changing tastes of teen spending. Other brands as well,  like Michael Kors, Fossil, Ralph Lauren, Steve Madden, and Decker Outdoors’ UGG are facing the largest declines among major brands. However, Nike, being the industry topper, has seen some of the sharpest downfalls.

Perhaps, today’s its getting tougher to convince a teenager that spending $150 to $200 on a pair of Jordans is still a good deal, especially because Michael Jordan’s star power is declining. Foot Locker said that Jordan sales in North America in the second quarter “has slowed considerably as compared to historical rates,” which is going down its performance by 68% of its merchandise purchases from Nike.

While on the other hand, Adidas is surging. Second-quarter sales have gone up to nearly 20%, and Adidas reported full-year top- and bottom-line numbers would be better than expected.

Interestingly, Adidas has been hitting hard on design, personalities, and technology right from sports stars like James Harden to entertainers like Kanye West.

The Game Changer in the world of sneakers

Not only Adidas is stealing from Nike, but it’s completely eroding Under Armour, a brand now categorized by teens as an “old brand.”  And streetwear brands like Supreme and  Vans — brands that have a strong influence on urban youth — has marked a surge in their popularity.

Now this suggests that streetwise brands entail a level of authenticity which Nike finds hard to duplicate, and so its focus on sports stars, such as an NBA sponsorship Opens a New Window which might actually work against it. But in contrast to it, Adidas has been targeting streetwear in ain intense and dedicated way which has accounted it for greater gains.

Losing teen consumer support is Nike’s biggest fear

To counteract these trends, Nike is now trying to sell directly to the customers via and through its own website in order to meet the heightened competitive pressure which has lead to further discounting of its shoes. Although it might seem as a necessary step to raise sales, it’s never considered a good sign for a “luxury” brand to beg for sales in the mass market just like many other high-end brands did in the past soon after facing new, ‘unacceptable’ trends. Such actions indicate and reflect panic and desperation, which destroys the image of a brand. 

Since Nike has always been a dominant force, its brand erosion is skewing up the teen survey, which found that the brand’s mindshare losses are deemed for the entire loss experienced in the athletic cloth line segment from when the survey was conducted by Piper Jaffray in spring. 

Although losing teen consumer support is a worrisome factor, Nike is still a dynamo of a company, who is dedicated to innovation and getting better at everything it does.

Fashion trends in the sneaker world usually come and go much more quickly than they used to. And the winds can anytime easily shift back in Nike’s favor.

The positive side of its fall is that it can open up the field for a more genuine competition. Nike has always been in a league of its own for years, and now, maybe it’s time for it to start listening to its consumers and deliver what they really want. 

Are you a Nike or an Adidas fan?

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