Is Nike Losing Its Footing?
Originally Published in Women’s Wear Daily on August 3, 2016
The once supreme ruler of sportswear is facing some stiff competition for market share and rapidly losing the credibility that it once had as the reigning style leader in the fitness world. While still the biggest game in town, it has taken some real hits lately by old rivals and young upstarts alike. How could the mighty Nike have become so vulnerable?
Fitness was a different game in the Seventies and Eighties. There weren’t that many people working out, and there weren’t that many brands competing for this small segment of the population. Wearing a Nike shirt meant that you were one of those “fit people” and the conversation ended there. After all, a brand is nothing more than a visible indicator of your inner belief system.
With the advent of this fitness boom, there are now dozens of different specific fitness ideologies to subscribe to. When you wear sportswear as fashion, you aren’t just representing the fact that you are fit, you are showing your allegiance to your CrossFit gym or your yoga studio by wearing Reebok or Lululemon, respectively. This specificity of fit culture is the very thing that threatens the Nike brand’s foothold on the sneaker industry.
Think about it. Sportswear in essence has become a type of specialized equipment, and by definition no one brand can authentically specialize across multiple verticals. I wouldn’t trust a basketball shoe by Everlast or a Hockey stick made by Titleist — would you?
In Nike’s case, the choice of specialty was simple and unavoidable: Basketball. Or more specifically MJ, Kobe and LeBron. This was a great thing in the Nineties, when MJ was at the top of the game and wearing a fresh, new pair of Jordans was the height of fashion on and off the court. In 2016, though, the market for team sports-related clothing is skewing younger and younger as individual fitness modalities like yoga, cycling, cross-training and boxing gain popularity with young adults that have disposable incomes to spend on clothing.
By tying their future to the NBA, Nike has also created a system where they are now forced to battle other brands for superstar signing rights. Steph Curry famously made a deal with Under Armour and catapulted their previously unthinkable sneakers to the top of many preteens’ wish lists. Sure, LeBron won the day and Michael is still the G.O.A.T.…but it’s a tricky position for Nike to be in and a tough one to pivot out of. What if the NBA loses favor in the next 10 years? What if there is no heir apparent to King James? Where will Nike fans go?
Conversely, Reebok picked a different and much less glamorous sports vertical: cross-training. Specifically, they acquired the license to create a subbrand of CrossFit sneakers that are specially designed to perform squats, deadlifts and box jumps with ease. By tying into the Evangelical CrossFit community, Reebok has ensured that their brand extends beyond one person, and instead connects to a bigger idea: challenging your limits.
Lululemon similarly selected yoga in which to specialize, and it has effectively dominated. I remember thinking that the brand seemed too feminine to cross over to mass appeal, but I was dead wrong. Men and women who identify with the yoga lifestyle wear Lulu almost exclusively. Nike, Reebok and any newcomer would find it very difficult to gain market share at yoga studios. And this is the way of the fitness zealot: when we find our path, we like to wear the official uniform of our ethos, independent of what superstar is wearing the brand. In this athletics-first model, we are the superstars.
But there is one other way into the sportswear stratosphere: fashion-forward design. Good old Adidas and Puma picked fashion over function and became creativity-driven by signing up with designers and music luminaries Kanye West and Rihanna, respectively. Rihanna has brought Puma to a new level of cool, and has set them up to become the sneaker for the progressive, stylish and powerful woman of today.
And I know what you are thinking…what does Kanye know about sneakers? That’s easy. Kanye is cool, he is innovative, he is a revolutionary. Just as Pharrell did in the early Aughts by teaming up with designer Nigo on his Bape and Ice Cream clothing lines, Kanye created the Yeezy Boost line exclusively with Adidas, an unstructured moccasin-style casual knit sneaker that was released in extremely limited quantities to coincide with the release of his high-fashion clothing line.
The shoe was a smash hit and catapulted Adidas onto the runway, where the Kardashians sported them during fashion week and the tabloids covered them relentlessly. Adidas effectively created an entire fashion-forward subbrand called Adidas Originals that feature the Yeezy, the styrofoam-inspired Boost, Ultra Boost and Tubular Doom to name a few. This subbrand doesn’t have much in the way of overt branding. No stripes, no extras. Just cool, fashionable and comfortable sneakers that allow the wearer to express their creative side. Adidas is essentially playing Apple to Nike’s functional Microsoft.
So Nike, the longtime ruler of performancewear is facing some stiff competition by savvy competitors. These challengers aren’t attempting to “outperform” Nike, but “out-cool” and “out-specialize” them. Maybe a pivot from the NBA to a trendy underground, up-and-coming activity. Nike meditation sandals, anyone?