The emperor has no (more) clothes, as Adidas knocks out Nike’s supremacy in the sneaker business

It used to be a close match amongst offer, demand, price and appeal. At that time Nike (running Air Jordan brand) was undoubtedly the top player in the sneaker business. Yet, when such business tension faded, Nike started losing ground in the markets, including the American one, most of all in favor of Adidas. In other words, the sneaker giant, headquartered in Beaverton, has been losing market shares. Josh Luber, chief executive officer of e-commerce portal StockX, gave an explanation to this situation, which was unimaginable a few years ago. During his speech, reported by Business Insider, he pointed out: “In 2015 Adidas was covering 1 per cent of the business; Nike, in contrast, 96 per cent. Conversely, Adidas now is 60 per cent of our turnover”. What happened in 2015 then? The German brand launched the Yeezy model, which turned out a remarkable success, thus kicking off their knock-out action against Nike’s perfect running business. Since 1987, the brand has been intentionally manufacturing a quantity of shoes not to entirely meet the buyers’ demand. Such was their twofold aim: to make shoes cool and encourage craving customers to go to retailers and buy shoes even at higher price. “If demand for a shoe model is 100 and Nikes produces 96 units, well, they will sell all of them – says Luber. All provisions stocked in the retail stores will be easily sold out. Despite some secondary markets and markups, they will sell them all anyway. Conversely, if demand for that shoe model is 100 and the company supplies 101 units – he wraps up -, just slightly more then, they might sell 70, 60 or 50 pairs, however considerably less than 96”. Not to mention that if many shoe samples are available, then they are no more exclusive (and exclusiveness makes them appealing). Nike has probably to revise their slow pace manufacturing: in fact, both their designing and production are scheduled on a two-year period, points out Luber, and they have been therefore overwhelmed by a rather unexpected change in the business scenario. They are working on it though. Let’s see how things go.


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