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The Biggest Prize
In Nike country, the American company is taking the fight to Adidas. In footwear alone, Nike dwarfs the competition. In 2009, according to industry tracker SportScanInfo, Nike had 35% of the $16 billion U.S. branded-athletic-footwear market, while Adidas and Reebok together had just 7.9%. Adidas' weakness, says Svezia, is in its designs. "The U.S. market is very different from Europe's," he says. "It requires styling, relevance and a connection with the customer." Nike has capitalized with cutting-edge products like the Nike + iPod Sport Kit, Shox, Air Force 1 and Jordan franchises, which have overshadowed similar offerings from Adidas. Svezia sees it as a problem of top-down management from Europe. The folks in Herzogenaurach impose their design sensibility on the U.S. operation. "Adidas needs to give the U.S. division more freedom to be younger, more fashionable," he says. Sam Craig, a professor of marketing at New York University's Stern School of Business, says, "Nike just has a better understanding of the U.S. market. A lot of those skills can be bought with marketing firms, but Adidas is playing catch-up."
Stamminger insists Adidas is well positioned to compete in the U.S. "This is a two-horse race," he says, "a constant fight for market share." To that end, the Adidas Group sponsors the NBA and new NBA No. 1 draft pick John Wall; it owns the successful California-based TaylorMade golf brand. But Reebok, which Adidas acquired in 2006, had a rocky transition in the U.S. Inventory and distribution problems plagued the brand, and retailers didn't know where to position it. Adidas-brand shoes, instead of competing with Nike for first place in the U.S. branded-athletic-footwear market, found themselves battling Skechers, Asics and New Balance for second place. Credit Adidas, however, with finally finding a niche for Reebok. With its new fitness and toning shoes, Reebok has single-handedly invented a new footwear category, one that analysts expect will thrive well into the future. "After being somewhat left for dead," says Svezia, "Reebok is growing like a weed." As of mid-June, Reebok's sales had nearly doubled year over year, according to SportScanInfo.
Adidas is hoping soccer and the World Cup will give it an even bigger boost. "Not many people know that the U.S. is the largest soccer market in the world," says Stamminger. "There are 18 million active players in the U.S. and the biggest number of female players in the world." In trying to capture a larger share of that market, Adidas has tapped into some American icons, using Star Wars (and Snoop Dogg) in a World Cup ad campaign and launching a collection of World Cupinspired clothes at New York City's 2009 Fashion Week. Even Adidas' sponsorship of the Mexican national team, says Stamminger, was designed in part with the U.S. in mind. Besides having a loyal fan base among Hispanics in the U.S., El Tricolor played a number of pre World Cup matches throughout the U.S. (The U.S. national team, now riding high after its heroics in the first round, is in the Nike camp.)
One thing is guaranteed: while a new FIFA world champion will be crowned on July 11, the battle for dominance between Nike and Adidas is far from over.