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    Sneaker supremacy: Nike and Adidas battle for brand love

    This article is part of a four-part series about famous brand rivalries.

    Part I
    How Coke and Pepsi’s rivalry shaped marketing — and where it goes next

    Part II
    Sneaker supremacy: Nike and Adidas battle for brand love

    Nike and Adidas have been ensnared in a relentless rivalry that has commanded the athletic wear industry for nearly 60 years, attempting to out design, out recruit and out cool one another in order to dominate the now $310 billion global sporting goods market.

    The running boom of the late 1960s and ‘70s kickstarted the original sneaker battle, but fierce competition fueled Nike and Adidas through the millennium as they cozied up to athletes and celebrities and expanded their product lineups, succeeding in embedding themselves into consumer culture along the way. The duo has played critical roles in influencing modern marketing by moving beyond a narrow focus on product to writing the playbook for building a timeless brand through storytelling and purpose.

    “Both brands deliver a feeling, a specific value that goes beyond the functional benefits of wearing the shoes,” said Niels Neudecker, head of brand performance at Kantar.

    Financially, Nike is leagues ahead of Adidas, but the latter manages to punch above its weight in terms of sales and is considered one of few to rival master storyteller Nike regarding brand love. Now the rivalry has taken on newer terrain in digital and metaverse channels, with products ranging from core sports shoes to casual sneakers, athleisure and non-fungible tokens (NFTs).

    “You can’t remain on top unless you’re fighting to stay there. And part of that is keeping your name out there,” said Nicholas Smith, author of the book “Kicks: The Great American Story of Sneakers.”

    The starting pistol

    Adidas’ precursor comes from humble beginnings in Germany, where brothers Adi and Rudolf Dassler started Gebrüder Dassler Schuhfabrik (Dassler Brothers Shoe Factory) in 1924. They manufactured some of the first spiked running shoes and quickly won the favor of Olympic runners Lina Radke and Jesse Owens. A dispute split the brothers and the company into what would soon become Adidas and Puma, with Adi Dassler starting anew with his eponymous brand that would lead the running shoe industry for nearly two decades.

    Before Nike swooped into the picture in the mid-1960s, co-founder Phil Knight — then a graduate student at Stanford business school — wrote a paper on the plausibility of importing high-quality, low-cost running shoes from Japan and selling them in the U.S. market, which at the time was dominated by Adidas and Puma.

    “Being a business buff, I knew that Japanese cameras had made deep cuts into the camera market, which had been dominated by Germans. Thus, I argued in my paper that Japanese running shoes might do the same thing,” Knight wrote in his 2016 memoir, “Shoe Dog.”

    Knight returned to his home state of Oregon two years after graduating and started Blue Ribbon Sports, partnering with his former track coach at the University of Oregon, Bill Bowerman. Blue Ribbon Sports mostly flew under the radar for several years, importing shoes while the duo tinkered with original designs, spotting an opportunity in the budding jogging movement of the late ‘60s and ‘70s.

    “The Nike co-founder always had his eye on being No. 1, and being No. 1 meant you had to unseat Adidas at the top of the table. So this was something [Knight] spent decades working toward, not just in terms of finding where in the world you could make a cheaper, almost-as-good product but also studying what makes professional athletes flock toward Adidas rather than some other brands,” Smith said.

    Adidas was still top dog at the time, making athletic shoes for several sports and linking with soccer teams around the world. Converse was a major contender for basketball shoes, but there wasn’t much of a market for shoes specific to running, according to Smith.

    “It goes back to marketing 101, where you have to find a need and fill it,” he said. “Nike was able to ride that wave to really corner the running shoe market at a time when a lot of the other brands focused on other things.”

    Franz Beckenbauer tracksuit ad in 1967.

    Adidas

     

    ‘They want to be the hero’

    Knight’s battle for supremacy — fueled by a “grow or die” mindset, per his book — reached new heights in the mid-1970s, when Blue Ribbon Sports was renamed Nike and paired with the now-iconic swoosh logo. Sales were doubling every year, and Nike had signed its first athlete endorsement deal with tennis star Ilie Năstase. The company hired John Brown and Partners to bring its advertising up to par with the company’s skyrocketing success, introducing Nike’s first ad “There Is No Finish Line” to convey the endorphin high that runners chase while touching on Nike’s vision of inspiration and innovation. The poster was an instant hit with consumers and marked a subtle but important change in how the brand approached marketing. Instead of emphasizing athletic shoes, it put the consumer in the spotlight and broadened Nike’s focus beyond product.

    The ad and subsequent shift in positioning presented Nike as a brand with personality at a time when many brands lacked one, drawing on its mission statement to bring inspiration and innovation to every person.

    “As a brand, they want to be the hero, they want to challenge the status quo,” Neudecker said. “They want to challenge what’s there. And that’s a very athletic attitude. As an athlete, you always want to challenge the status quo; you always want to be better.”

    By the time it debuted its 1988 “Just Do It” campaign — ranked one of the top taglines of the 20th century — Nike’s revenue exceeded $1.2 billion, led by the success of its Michael Jordan-backed Air products, and had acquired footwear brand Cole Haan.

    “When you then compare Nike’s [mission statement] to Adidas’, it’s very different,” Neudecker said. “I think the interesting word in Adidas’ is the word lifestyle. They’re not seen as the hero. They’re more in the lifestyle perception also because the people they sponsor and the people they collaborate with.”

    Concert attendees hold Adidas shoes and signs at a Run-D.M.C concert in 1986.

    Adidas

     

    Courting favor

    Today, Adidas often partners with stars outside of traditional sports: musicians, artists, creators and the like. But in the mid-1980s, this was a novel concept. Its Superstar basketball sneaker quickly crossed into street fashion when hip-hop group Run-D.M.C. began sporting the shoes as part of their signature look, immortalizing their endorsement with the song “My Adidas.” The brand’s early links with non-athletes laid some groundwork for how Adidas would position itself for decades to come, though it maintained its ties to several soccer teams and tournaments around the world as Nike — and rival Reebok — attempted to draw interest via athlete sponsorships.

    Sports marketing pioneer

    Before Adidas, few brands tied themselves so closely to high-performing athletes. Adidas made a name for itself early on by manufacturing some of the original spiked running shoes, first getting the invention onto Olympians’ feet in the 1920s and 1930s. Later, the nailed-in spikes were replaced with screw-in studs and soon won favor among soccer teams across Europe in the 1950s.

    Adidas’ secret to success during this period centered around product innovation and athlete partnerships. Founder Adi Dassler met with runners over the years to gather feedback and observe potential design improvements to support their needs.

    By forming direct partnerships with champions, the company joined Wilson Sporting Goods and General Mills’ Wheaties in helping to pioneer the now booming sports marketing industry.

    Adidas’ steady growth took a turn just a few years after it went public, posting record losses in 1992 and nearly going bankrupt. New leadership in Robert Louis-Dreyfus spurred a fresh direction that built on the brand’s more than 50-year legacy. Louis-Dreyfus steered the sleeping giant back toward growth by taking Adidas from a sales-driven company to a marketing-oriented one. A 1995 marketing slogan nodded to how far the business had come: “We knew then. We know now.”

    Nike by this point had unseated both Adidas and Reebok as the top purveyor of athletic shoes, but Knight’s “grow or die” mentality continued to drive the company forward.

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