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Nike aims to outrun Adidas in soccer sales
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gear - The company rolls out World Cup uniforms on its rival's home
turf as part of a strategy to become No. 1
Tuesday, February 14, 2006
HELEN JUNG
Nike brand president Charlie Denson on Monday unveiled Nike's latest
soccer-related products and World Cup team uniforms in a promotion
that was as much metaphor as marketing maneuver.
Just as Nike staged its launch in Germany, the home of Nike's chief
competitor, Adidas-Salomon AG, so is Nike intruding on Adidas' soccer
business -- the company's heritage. Nike, which said 12 years ago
that it wanted to be No. 1 in the soccer business, is rolling out
one of its largest marketing campaigns ever for the 2006 World Cup
in its quest for that title.
Still, it's a tough year to try to knock Adidas off its throne.
The World Cup is being held in Germany this summer, and Adidas is
an official sponsor of the event and sponsor of Germany's three-time-winning
national team.
Adidas will provide the balls for the games and -- in a blow to
Nike, which frequently runs commercials during big sports events
-- has locked up a deal that ensures Adidas is the only athletic
brand to air commercials on English-language broadcasts of the games
in the United States.
"Adidas has really put together a very strategic package for
the World Cup," said John Horan, publisher of Sporting Goods
Intelligence, an industry newsletter. "That's going to be insane
for Nike to try and outsell them."
Figuring out who is No. 1 and who is No. 2 depends on what you
include. Many analysts said Adidas has the edge when counting products
used for soccer, not casual products that have soccer styling, which
Nike counts in its estimates.
Still, it doesn't significantly change the landscape. "I don't
think it really matters who's number one except for woofing rights,"
said Matt Powell, contributing editor for Sports Executive Weekly,
another industry newsletter. "There's a lot of woofing going
around."
Nike, based near Beaverton, has made considerable strides in a
sport long dominated by Adidas. In recent months, it has launched
several products, ranging from casual soccer-inspired T-shirts to
hard-core soccer boots. It sponsors the Brazilian national team,
which beat Germany for the 2002 World Cup title.
That competition on the field may well determine who gains the
upper hand -- for a while, at least -- in the soccer wars.
"To a large extent, it depends on the outcome of the games,"
Powell said. "If an Adidas team wins, it's very good for Adidas.
If a Nike team wins, it's very good for Nike."
Both companies said they expect to spend as much -- if not more
-- on their marketing efforts around the World Cup than for any
other event in their history.
Nike didn't seem much of a threat 12 years ago. Despite soccer's
status as the world's most popular sport, Nike was a bit player
by brand president Denson's reckoning. Nike brought in $40 million
in soccer-related product sales that year.
The company realized it needed to significantly invest in the sport
both for legitimacy as the largest sporting-goods manufacturer in
the world as well as for international growth prospects, Denson
said in a phone interview Monday from Germany.
Now, Nike's swoosh will mark the uniforms of eight national teams
-- two more than Adidas. Nike unveiled the uniforms and held events
in Berlin and other cities around the world to build excitement
for the World Cup and its "Joga Bonito" campaign (Portuguese
for "Play beautiful" like "Just Do It").
Nike expects soccer-related sales to reach $1.5 billion in 2006,
with customers buying more than 2 million replica uniforms, 23 million
pairs of soccer footwear -- including its new Mercurial Vapor III
lightweight soccer boot -- and more than 10 million balls.
A successful World Cup effort could help Nike shore up sales in
Europe and Japan, where the company has been weak lately.
Adidas, for its part, started its World Cup marketing last October
with the launch of its "+10" campaign, which revolves
around the idea that one player plus 10 others equals a team. The
company has been rolling out products over the past several months,
including the soccer ball that will be used in World Cup games and
its flashy new F50 Tunit soccer boot, which allows players to customize
their boots with different insoles and spikes of varying lengths.
The company, which analysts said has about 35 percent of the worldwide
market, said it expects its sales to easily exceed 1 billion euros,
or $1.2 billion U.S. In addition, Adidas is projecting sales of
more than 1.5 million replica jerseys for the six teams it is sponsoring
and more than 1 million pairs of its newest Predator soccer boot.
Adidas knows it has considerable home-turf advantage.
"The stage is really set well for us," spokesman Evan
Wiener said. "We couldn't really ask for a better situation
to be in."
Denson said he is not worried that Adidas will steal attention.
He said Nike will roll out more elements of its marketing campaign
as the tournament draws closer. The company is also looking at new
ways to connect with younger players, referring to a new partnership
with Internet search engine Google, which he would not detail.
"The tournament is all about the game, and the game is all
about the players," he said. "I think when you look at
our representation on the pitch, whether through the teams and federations
or the actual players themselves, we feel great about our position."
And neither company can factor out the No. 3 in soccer, Puma. The
company -- started by the brother of Adi Dassler, who founded Adidas
-- also is based in Germany and has 11 teams that will compete in
the World Cup.
"They're sort of the gadfly in this thing," said Powell,
the Sports Executive Weekly editor. "They've got more teams
-- they're not necessarily the best teams, but they have a lot of
teams. . . . If these upstarts do well, it could suddenly surprise
everyone."
http://www.oregonlive.com/business/oregonian/index.ssf?/base/business/1139889303256920.xml&coll=7
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