For a category that churns out effortless cool fashion on a weekly basis, the sneaker business proved to be a high stakes game in 2017, hinged on innovation, speed, fashion and strategic celebrity endorsements.
Nike, Adidas, Puma and Under Armour each brought their A-games, but some fared better than others.
This year marked a major milestone for Adidas. The NPD Group reported in September that Adidas surpassed Nike’s Jordan brand to become the world’s most second sought-after sneaker brand after Nike. The rise of retro franchises like the Superstar, which was one of the top selling sneaker styles in the U.S. in 2016, and the trend for retro sneaker designs helped Adidas push ahead of Under Armour and tested long-time rival Nike, but the German brand spent most of 2017 searching for its next hero shoe.
In a June interview with Reuters, Mark King, president of Adidas’ North America business, said the company was cautious of oversaturating the market with old-school styles. However, he said he believed new product lines like NMD, Tubular and Ultraboost would offset the softening demand of retro styles.
The year saw fewer Yeezy-related headlines and more news about Adidas’ investments in innovation, sustainability and consumer-focused projects.
In June, Adidas unveiled Futurecraft 4D, a range of high performance footwear featuring midsoles manufactured with a new light and oxygen process. The technology, called Digital Light Synthesis, is a step away from 3-D prototyping and other conventional manufacturing methods. The process uses digital light projection, oxygen-permeable optics and programmable liquid resins to generate high-performance, durable polymeric products.
Adidas upped its game of being a good corporate citizen in 2017. The company set new sustainability goals including plans to replace the use of conventional cotton in its products with 100 percent sustainable cotton by 2018 and a major push toward recycled polyester products—a mission driven by the brand’s collaboration with Parley for the Oceans.
Adidas set a goal to make 5 million pairs of footwear with Parley’s recycled plastic bottle yarn by 2018, in addition to the 1 million pairs it aimed to create this year. The sustainable material was a natural fit in eco-friendly designer Stella McCartney’s collaboration with Adidas, which introduced the Parley Ultraboost X in March.
From Parley to Yeezys, the Boost product line got a series of updates throughout the year. Sneakerheads are already pumped for the January 2018 release of the first black Boost midsole, but we know at least one person is stocked up on the shoe. Adidas offered a one-of-a-kind package of 40 Boost styles for $7,000 this fall. It sold out in five minutes. The collection included styles from Adidas’ ongoing collaboration with musician Pharrell Williams and the first shipment from company’s Speedfactory in Ansbach, Germany.
The first major project created at the localized manufacturing facility rolled out in October, called the London-inspired AM4LDN. The Speedfactory shoe was co-created using athlete data to help shape the design. During development for the AM4LDN, Adidas worked closely with a group of London-based consumers in order to gain unique insights into the specific demands of runners in the city.
Less technical, but maybe just as effective, Adidas turned to crowdsourcing to find out what consumers want. In November, Adidas began to use Instagram Stories’ new ‘poll’ feature to ask followers which of the six customizable options for the UltraBoost Xeno they liked the most. Followers were able to pick their preference for the color, upper, caging, laces and outsole.
The brand continued to connect with consumers through a number of headline-grabbing initiatives, including breaking a Guinness World Record with yoga company Wanderlust, hosting tennis matches in the heart of New York City and a number of new retail concepts that tapped into key markets in the U.S.
In October, Adidas opened a new Chicago flagship that spotlights Chicagoan artists. The flagship followed the opening of Concepts’ first-ever Adidas exclusive boutique in Boston. The store offers lifestyle and performance product for men and women across Adidas’ categories in a setting kitted out with design elements that pay homage to Boston’s Celtic heritage.
The cat is clawing its way back into fashion. The Kering-owned athletic footwear and apparel company saw double-digit growth in all regions and product segments in 2017 and increased its guidance throughout the year. The brand also topped Stylophane’s list of the fastest growing footwear brands on Facebook earlier this year.
In 2017, Puma continued to release innovations in its performance categories like the customizable lacing system, Netfit, as well as ink new deals with professional sport teams. However, the company’s success was primarly led by Gen Z’s desire for effortless, comfortable apparel and footwear—a look Puma’s roster of celebrity endorsers have down to a science.
The brand touted The Weeknd, Kylie Jenner, Big Sean and Selena Gomez among its celebrity collaborators in 2017. However, musician and modern day style icon Rihanna continued to hold court with her Puma x Fenty line.
For Spring ’17, Rihanna riffed on Marie Antoinette style, offering furry soccer slides and sneakers adorned with pastel satin bows. For Fall ’17, the Fenty collection revisited high school cliques, with creeper sneakers, sock boots and cleat-inspired silhouettes complemented by oversized tracksuits, plaid puffer coats and chunky knits. Rihanna and Fenty has a motocross-inspired collection lined up for Spring ’18.
Puma also played outside the box by collaborating with other brands during the year. In March, the company teamed up with the WWE for a limited-edition collection of Cylde sneakers designed with artwork based on six WWE legends: ‘Stone Cold’ Steve Austin, The Ultimate Warrior, ‘Macho Man’ Randy Savage, Ric Flair, André the Giant and Undertaker. In June, the brand tapped the Minions, the yellow creatures from the film Despicable Me 3, for a collection of men’s, women’s and children’s footwear and apparel.
Puma partnered with high-end women’s shoe designer Sophia Webster for a fall capsule collection inspired by dance. The collection combined Webster’s ultra-girly designs with Puma’s knit sneakers and sandal hybrids. The line also offered ultra-girly versions of Puma’s iconic suede silhouette, which turned 50 in 2017.
While Adidas ramped up efforts to bring localized footwear designs to regions across the world and Puma racked up celebrity brand ambassadors, Nike looked inward and tried to patch up holes in its business and communication plans.
Nike held its long-standing No. 1 position throughout 2017. However, the powerhouse began to lose steam as consumer preferences shifted from performance to retro and competitors ramped up their social media initiatives. In June, JPMorgan told investors Nike sales will weaken and the company will miss earnings expectations next year. By September, the brand’s North American sales dipped 3 percent.
To ignite sales, Nike introduced “Consumer Direct Offense,” an alignment that focused on digital marketplace, targeting key markets and delivering product faster. The plan required Nike to reduce its style offerings by 25 percent and cut about 1,500 jobs. The company also made amends with rival Amazon in 2017, agreeing to sell to the e-commerce giant in exchange for stricter policing of counterfeits and restrictions on unsanctioned sales of Nike products.
On a conference call with analysts in September, Mark Parker, chairman, president and CEO said, “We are going deeper, we are connecting more personally to help each individual make the right choice for them. That’s incredibly powerful for a brand that motivates people to do more. To make that vision a reality at scale, we are taking some bold steps. We are breaking old models and we are fully realigning our teams to be more personal by adding resources to our fastest-growing cities, editing our lines to create more choice on top-selling products, investing in better data and analytics to sense market shifts faster, activating new product creation teams focused only on speed-to-market, and we are leading with mobile.”
Nike’s plan to speed up production included the addition of Grabit, a robotics company that uses static electricity to pick up materials. Unlike past innovations that involve robotic hands mimicking human physiology, Grabit’s invention uses flat pads of electrodes that create an electric field that sticks to nearly any surface. The brand tested a speedy 90-minute customization experience at its New York City flagship that allowed Nike family and friends to select the graphics and patterns of their Nike Presto X kicks. “The intention of the project is to bring to life the collaborative design experience that we offer our athletes,” said Mark Smith, Nike VP of innovation special projects.
The Nike Zoom Vaporfly 4% tapped into runners’ need for speed and made headlines in the process. A study predicted that athletes wearing the Nike Zoom Vaporfly 4% will be able to run faster and break records, like running the first sub two-hour marathon. The newly developed shoe is comprised of a full-length carbon-fiber plate with forefoot curving embedded in the midsole. The study suggested that this carbon-fiber plated midsole shoe would allow runners to use less energy compared to other prototypes.
Nike experimented with materials in 2017, including its most sustainable leather material. The brand launched its first shoes made with Nike Flyleather, a material that contains 50 percent recycled natural leather fiber and requires 90 percent less water. The upper material is five times more durable than traditional leather and 40 percent lighter than full-grain leather. NikeLab played with indigo-dyed knit uppers for the first time for its collaboration with Japanese brand Loopwheeler. With Swarovski, the brand elevated the Nike Air Max 97 LX with an upper material and contains small clustered cut and uncut crystals. The result is a sneaker with a gritty and gleaming appearance.
The Nike App extended its global reach in July launching in France, Germany, Italy, the Netherlands, Spain and the U.K. The app offers users perks like styling tips, the option to reserve product and free customization. In Japan, Nike brought its products to the local corner store. Nike Japan rolled out a new delivery platform that allowed consumers to order products online and have it delivered to one of the more than 12,000 konbini, or convenience stores.
The brand stepped up its brick-and-mortar game with new stores that linked traditional retail with interactive experiences. Nike kicked off the year with a new immersive concept store in the heart of Miami Beach’s shopping district. The store includes a digital Nike+ Running Trial Zone and Nike+ Soccer and Nike+ Basketball Trial Zones where shoppers can try out gear. Next year, Nike fans can look forward to a brand-new Manhattan flagship when the original Niketown exits Trump Tower in March. The new store is slated to open November 2018.
In 2017, Under Armour (UA) coped with growing pains and backlash from perceived pro-Trump statements by its CEO Kevin Plank.
The brand began the year on the defense after consumers and its own brand ambassadors took to social media to voice their disappointment about Plank’s comments about Trump being an “asset” to the country.
In an interview with The San Jose Mercury News, UA ambassador and Golden State Warriors guard Stephen Curry snapped back and said, “I agree with that description [of “asset” made by Plank], if you remove the ‘et’.”
Plank’s attempt to smooth things over began with an open letter that emphasized UA’s positive role in Baltimore’s economy and community. A few months later, following the racially-charged protests in Charlottesville, Virginia, Plank left Trump’s Manufacturing Jobs Initiative.
The news didn’t improve for UA. While the company’s international business continued to deliver against expectations, UA saw demand and overall revenues decline in its largest market, North America. The company’s revenue dropped 5 percent to $1.4 billion in the third quarter. North America revenue decline 12 percent.
Running and outdoor footwear proved to be a glimmer of hope, as footwear revenue increased 2 percent in Q3. However, declining sales in the basketball category didn’t bode well for the brand which invested deeply in the category early on. The delay of the Under Armour Curry 4 sneaker, which was expected to be one of the most popular basketball shoes of 2017, added insult to injury. Analysts warned that the setback could mean customers losing interest in the shoe and moving on to other choices, leaving the brand right back where it started.
In August, the company embarked on a new strategy to stay competitive. UA axed 280 jobs from its global workforce and launched a restructuring plan to “more closely align its financial resources to support the company’s efforts to better serve the evolving needs of the changing consumer and customer landscape.”
UA’s plan also focused on speeding up its footwear manufacturing capabilities. The brand opened a performance innovation hub in Portland, Oregon, aimed to “condense and accelerate” its footwear development. The company also inked a deal with 3-D printing metals and polymers company, EOS, to scale UA’s footwear sector. Through the partnership, UA aims to develop advanced laser sintering technology, which creates metal prototypes and tools directly from computer aided design data.
The company dabbled in trendy retail concepts, including subscription services. The new ArmourBox ships every 30, 60 or 90 days with the latest UA apparel and footwear for consumers to try-on in the comfort of their own home. And in a step to grow its lifestyle collection, UA signed its first musician brand ambassador, A$AP Rocky.