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Insider Ties: What Athletic Footwear Companies Ruled the 3rd Quarter?

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 Since I know that the majority of the visitors to this site are “sneakerheads” there may be some disconnect. Then again I hope my community is aware enough to realize that my 3rd Quarter reference is in regard to the last three months of sneaker sales. If not, now you know.

When a company attempts to sell you something, especially when it’s a luxury item, they have to appeal to your emotions. The evidence is in the numbers. According to NDP’s Matt Powell here are the top performing brands in the 3rd Quarter:

Brand Performance Dollar Share Dollar % Change
Q3 2016 Top 5 Athletic Footwear Brands  2016  2015
Nike/Brand Jordan 52% -3%
Adidas 9% 98%
Skechers 5% -2%
Converse 5% 6%
New Balance 3% -12%

Here comes the breakdown by line. The title line of Brand Performance lists the top 5 brands underneath and the last two columns, Dollar Share and Dollar Change% show how much a company gained or loss in comparison to the previous year during this quarter. Quick Note: just in case anybody is wondering how or why a company has to measure itself against the previous year, all companies gauge growth this way. Projections and Forecasting, shifts in trends, can be monitored or can prepare and help a company see trends in their business helping to decrease or increase inventory.

Nike/Brand Jordan is the number 1 footwear brand in the US. The demise of Nike has been thrown around for the last year. The surging adidas and upstart Under Armour have been tossed around as threats to the throne. I don’t think Nike has much to worry about. They lost 3%, which has set the wheels in motion in Portland and they have adjusted immediately. The problem that Nike can’t account for is the lack of interest in basketball shoes. All of Nike’s issues stem from growth being slowed by too much inventory and slow sales in their signature series of shoes from LeBron, Kobe, and KD. To adjust Nike lowered the cost for the signature shoes and they have only released a new model for KD. The LeBron line is being carried by one of its takedown models the LeBron Soldier which retails at a fraction of the cost of the LeBron 13. The Olympics and back to school didn’t help. Interestingly enough this is the second Olympics where Nike hasn’t seen a bump in sales. The shift in basketball has been taking place for a while, it’s affecting Nike now because adidas has stepped up and is dominating in casual and running.

Adidas is now the number two brand. This time last year Under Armour was number 2. They aren’t even in the top 5 anymore. A combination of things have helped adidas to gain a 98% increase; which is an insane number! Kanye, Boost, and adidas Originals. The Three Stripes made a concentrated effort to reestablish itself in the US and their strategy of going back to their roots has worked marvelously. Remember adidas was the first company to give entertainers an endorsement. Run DMC gave adidas access to Hip-Hop and the brand performed well in the 80s. They reacquainted themselves with Hip-Hop by signing Kanye and Pharrell, not to mention emcees like Joey Badass and the Pro Era crew have been featured in a number of spots. Adidas also pulled the biggest move in digital marketing with their Future campaign which also placed them in the music biz. Clever marketing and attention to the shift in basketball won the day for adidas, and they may see a bounce in basketball by adding Kristaps Porzingis soon.

Skechers lost market share. I’d really like to dig into Skechers, but honestly, I’m not even interested in the brand. Seriously, Skechers’ decrease in market share is a direct reflection of the growth in Women’s and Children’s footwear and adidas’ move to number two. Where women previously looked only at comfort and price, the increased attention given to styles in casual athletic apparel has created a more style conscious sneaker market for women. I expect Skechers to continue to fall as Puma and Reebok who have jumped all in on fitness and fashion will take more of their share.

Converse gained market share and it is directly related to the implementation of Nike technology into the classic silhouettes. With casual growing and becoming more prominent, along with retro, Nike made Converse more attractive by adding Lunarlon Cushioning to the All Star. They also developed a series of eye catching and stylish releases. The reality is that the Chuck Taylor will never grow old, and if you can make it more comfortable, it will always capture a share of the market. In the next quarter I see them maintaining this slot due to the adaptation of the All Star as an all weather shoe.

The 5th place goes to the only company that can claim ‘Made In The USA’ on many of its products. New Balance may have the 5th spot, but they decreased 12% which has to be of considerable concern to the brand. New Balance does a lot of things right, but adidas is the culprit here when you look at -12%. Adidas Boost models are becoming the go to shoe in casual wear. The NMD has literally replaced every casual shoe. Brooks and Asics have both cornered the running shoe market so the storm is coming at New Balance in every direction.

Big shout out to Matt Powell for supplying me with the details needed to put together this analysis. Take a minute and visit NPD’s website to learn about other industries, not just kicks. Who do you think will win the 4th Quarter? My bet is on Adidas continuing to gain market share.

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