There is certainly no shortage change occurring in the footwear industry. With retail being disrupted, automation becoming more prevalent in manufacturing, and lifestyle categories dominating athletic footwear, 2017 is sure to be exciting.
Every industry goes through it’s big shifts. The 70’s was the last era of massive disruption to hit the athletic footwear industry. Right now we are at the cusp of a similarly important shift that posses great opportunity for those who take advantage of these changes and disaster for those that don’t.
We have compiled a body of work that highlight the big trends we see influence the athletic industry in our Footwear Impact Report. In this trend report we provide practical insights to help professionals thrive in this ever evolving industry. We visit, athleisure footwear, the massive disruption in retail, best marketing practices, consumer trends, and advancements in manufacturing.
Below you will find an expert from from the report that dives into the changing sports consumer and the fundamental shift that has occurred in their values. You can download the full report here.
Sample of the 2017 Footwear Impact Report
Chapter 1: The Changing Sports Consumer:
The values of today’s athletic customer base are changing significantly as the fundamental focus of athleticism shifts away from organized team sports. Instead, consumer’s perspective of what it means to be an athlete is more closely tied to fitness and lifestyle.
With the sporting goods industry growing faster than most other industries, and its mainstream presence firmly rooted, this fundamental shift in consumer values is critical for brands to grasp. We will look into the progression of this trend and how Adidas’s recent growth can be attributed to the way it has embraced this big shift.
The last 60 years has seen an overwhelming increase in participation and passion for athletics, spawning an industry deeply rooted in sports.
Traditionally, both youth and adults participated in a handful of individual and team sports, becoming loyal enthusiasts with specialized needs for their gear. Thanks largely to the running boom in the 1970’s, the demand for better and better equipment created a ‘golden age of innovation.’ During that time, the demand for enhanced performance in footwear increased in tandem with athletic performance in general.
Since the mid-1990’s up until now, the caliber of athletes and competition has risen so high that many people are intimidated to join, creating a polarized landscape in youth athletics. These two segments can be referred to as the elite sports athlete and the mainstream fitness athlete.
The elite athlete is driven to achieve excellence in sports, where they participate on both a high school and club team, extending their sports season to run for an entire year. This prohibits the elite athlete from participating in multiple sports, driving them to be highly focused and specialized. The level of intensity is in part due to the socioeconomic rewards available for those who excel. Many look to athletics as a means to get a college education, and youth sports are taken to an extreme degree.
This level of intensity disincentivizes many from even participating in team sports, as the joy, constructive competition, and light-hearted nature of sports has been eschewed in favor of elite competition. The rigours nature of sports can even cause the elite athlete to get burned out.
In light of this transition in sports, the majority are trending toward a fitness-centric perspective where participation in athletics is driven by health and lifestyle choices. This consumer has tendencies to be diverse rather than specific in their interests, and values products that are versatile rather than specialized. As opposed to being motivated by hardcore competition, this segment finds motivation, community, and entertainment in participating in workout/fitness programs, or training on their own. To them, being athletic is fashionable, and having a wardrobe that promotes this idealism is important as well. Hence the recent popularity of the athleisure trend.
The athleisure market caters to those demanding streetwear that is athletically inspired, and can be integrated into all aspects of people's lives. This has forced footwear to focus on styling, becoming a fashion element more than a performance based one. Yet what must not be forgotten is the reason why the athleisure trend became so popular to begin with: Athletic wear is comfortable.
For product, this means that customers have come to expect a certain standard of comfort and performance in their everyday-wear. For them this means performance is assumed and that all product must meet this baseline standard. Unlike the past, performance is no longer a key differentiator, instead, style, versatility, and value are essential attributes to this consumer.
How are the big brands adjusting to address this trend?
Several of the growing brands are rethinking their business models entirely. For example, Adidas has three unique principals influencing their direction; speed, influential cities, and open source collaboration. By focusing on increasing speed to market, finding design inspiration in the top cities, and opening up to collaborating with cultural influencers, Adidas is positioning themselves to be more of a lifestyle brand within the athletic industry than ever before.
With their notable growth projections of 18%(1) compared to Nike’s single digit projection for 2016, it is clear that Adidas’ strategy is reaching this emerging customer base in a big way. By integrating into some of the most influential cultural centers in the world, Adidas is able to keep their finger right on the pulse of popular culture and street wear. With styling being the most important differentiator, this strategy allows them to focus on designing relevant and timely products ahead of the competition.
By decentralizing design, and relying on six distinct urban centers to drive styling, Adidas will be able to produce product that speaks to customers in a particular region. The recent success of several limited edition shoes, provides further proof that consumers want to express themselves as individuals.
Adidas is further enhancing their relevancy with the consumer through their collaboration efforts. Thier partnership with non-athletes is unheard of in this industry but is quite brilliant. Millennials in particular are drawn to people that they can relate to. An image of an extreme rock climber hanging on by a few fingers at the side of a cliff, is for example, intimidating and un-relatable for most. The brilliance in Adidas’ opens source idea, is in their partnerships with influencers who are more relatable to the consumer, whether they be media stars or lifestyle ambassadors.
This is where the comparison between Nike and Adidas' strategy becomes distinctly pronounced. Nike seems to still be highly focused on the old consumer mind that is fixated with sports. Their guarded centralized design approach is quickly being challenged as Adidas looks to leverage collective creative powers of others outside their organization.
“We also translate our competence in sports into streetwear and fashion because sport is an attitude and a lifestyle.”
Adidas has adopted a mindset similar to the major disruptors of the technology industry, one that is exponential in nature and which focuses on listening rather than speaking. It is one that has the ability to scale and develop connection with customers. This kind of strategy brought down massive organizations in the past. Will Adidas have the ability to overthrow the king of the industry? Only time will tell…
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