Nike2

The Sports Brand Race

Nike have dominated the sportswear industry for years, however the worlds largest footwear and apparel brand have recently seen their shares hit a 52 week low. The sporting giant’s profits haven’t fallen, but with revenues not rising as predicted people are starting to question if Nike will continue to be the powerhouse they always have been. Tough competition, the continued casualisation of fashion and constantly adapting consumer behaviours have influenced Nike’s position and opened up the sports brand race.

Tough Competition 

Nike are not particularly doing any worse, but their competitors are continuing to do better. During this summer’s Olympic Games, Adidas and Under Armour both saw their shares rise far more than Nike’s, indicating that they may be closing the gap in the performance sector. Under Armour in particular continue to put pressure on Nike to become the leading sportswear provider, after being voted the 6th most innovative company in the world by Forbes, a list which Nike didn’t make, the technical sports brand are mounting a genuine challenge. Under Armour have made a big gain in basketball, following collaborations with NBA MVP Steve Curry, and they continue to sign high profile athletes such as Michael Phelps and Anthony Joshua. However their continued rise to success could be more to do with what they know about branding, Nike have built their brand around selling consumers a lifestyle, but Under Armour sell a solution. Marketing their brand around the technical innovation that started the company seems to be of higher value to athletes than the desirability approach Nike’s marketing takes.

Casualisation Of Fashion

The positive news for Nike is that sports apparel is one sector of the retail industry that continues to rise. In particular, with 80% of trainers never stepping foot on a field, court or gym, sportswear has become a huge trend in fashion. The casual sportswear market is where Adidas make up their ground on Nike. Their sub-brand Adidas Originals has strong heritage in popular culture making it a constant favourite, the revival of their famous Stan Smith shoe lined up with vintage consumer trends, and the classic, simple profile of their Superstar trainer is hugely popular making it their most profitable shoe in 2015. In addition, their innovative and ground breaking approach to celebrity collaborations saw Kanye West’s Yeezy brand produce Yeezy’s, Footwear News ‘Shoe of the year’ for 2015. These factors helped make Adidas the most liked footwear brand on Instagram in 2015 and leaders in casual sportswear.

Consumer Behaviours

It’s not just other brands that are providing tests for Nike, the way consumers behave has always been able to dictate a brand’s success. A rise in quick and affordable fashion means that consumers aren’t limited to the offerings of higher priced brands, instead similar alternatives are available on demand. Customers want more choice and retain minimal brand loyalty, providing an advantage to suppliers of multiple brands. This is proved with the rising shares of brands like Footlocker, who provide Nike, Adidas and Under Armour, along with cheaper alternatives, all under one roof.

The Future for Nike

Although these factors are providing new challenges, it is not all negative for the American giant, shares might be down, but their profits haven’t fallen. Jim Duffy, an analyst at Stifel, says that he continues to see Nike to benefit from growing global concern for sportswear in both fitness and fashion. Nike are still the biggest sports brand in the world, they have promised more inclusive and capable e-commerce and enhanced focus on engaging experiences, making it hard to look past the brand built on innovation. Nike may need to focus their marketing stance and promote their fashion value, but experts still believe they will reach their goal of $50 billion revenue in one year by 2020, they may just face new hurdles along the way.

By

Jacob Topham

Can we help you with your next project?

News and Projects