Saturday, September 7, 2013

Nike's Monopoly On Basketball Sneakers

That check mark aka Nike is a sneaker giant that seems to get bigger and bigger with each passing year. With a roster full of the NBA's biggest names its hard not to be the biggest brand in basketball today. Lebron James, Kobe Bryant, Kevin Durant, Kyrie Irving, James Harden and Stephen Curry all are apart of Nike's basketball brand which means a lot because those guys I just mentioned are a bunch of peoples favorite players. Nike has a monopoly in the Basketball sneaker market with a 58% share of the Jordan brand and 91% of sales in the basketball sneaker market.

I want you to think about everywhere you go in your own personal daily lives now sit back and think about how many times a day you see someone on the street with Nike or Jordan basketball shoes on. Its a lot right? Well a lot goes into that and it starts with the roster of players they have. Nike along with the Jordan brand has sneaker contracts to pretty much everybody in basketball Carmelo, Lebron, Kobe, Chris Paul you name it they got it. Now the roster they own looks like an all-star game program and the fact that Nike owns half of Jordan makes it incredibly hard for anybody to compete with them in the market. They make great sneakers (for the most part), great players endorse their product so whats not to love. Jordan brand can drop the same sneaker 4 times and jack up the price 40$ and people will still buy them. Like I said I love a lot of their sneakers but I’m a person who loves variety and people need to realize that the power is in the consumers hands.

This past season the Jordan 28's came out and many Jordan sneaker heads began to say things like “Jordan's are falling off” or “Jordan hasn't made a good basketball sneaker since he left the league” but those same people will go out and buy 300$ and camp out for them. Personally the sneaker game like the competitiveness I see players in the NBA lack these days has fallen off. Everybody wants to join someone rather than be apart of something they themselves can build while blazing their own trail. Once people realize that the product of Jordan brand will not improve until they stop buying the same retro sneakers that have been re released on multiple occasions then nothing will change.

From a marketing standpoint Nike has always been ahead of its time from the “Bo Knows” campaign to the “We Are All Witness” campaign for Lebron. This year is no different they have so many things they can do from a marketing stand point such as Lebron's continued greatness, Kobe's return,Kyrie Irving's “Uncle Drew” commercials among many other things. I once heard someone say “ Company's like Nike as far as advertising goes don't offer much when it comes to marketing basketball-the game, its all just fluff and a way for them to get you to worship the next great player”. I heard that and it hit home with me Nike is a great brand but they don't sell the game of basketball as much as they are a false reality and for you to bow down to the Basketball's biggest names.

So we have established the Nike has its hands firmly on the sneaker community and the market at large so what can other company’s such as Reebok, Adidas and Under Armour do? I think its a combination of what they are currently doing and haven't done yet. For example Under Armour is up and coming they have a solid roster of nice young players such as Kemba Walker, Brandon Jennings and Deandre Jordan, they need to build upon that solid roster of players and for what they don't have in terms of star players make up for in quality basketball performance shoes. The thing I like about Under Armour from a Marketing standpoint is that they aren't selling you a dream but rather selling you commitment. The “Are You From Here” campaign featuring some of the brands athletes I thought was awesome because it felt authentic as the players spoke about their humble beginnings in the commercial. 

More so then what they do in any kind of commercial is what they do on basketball courts nationwide building relationships with fans through things like the Elite 24 basketball game which features the best high school basketball players in country. They take the guys who endorse the product and send them on tours playing basketball games in the same communities they grew up in while giving back. “We just trying to show our face in communities man, we hood guys”. As the brand continues to build upon its young roster so will 0.4% stronghold in the sneaker market.

Adidas is a lot like Nike as far as resources and marketing goes but they haven't had the on court player success which is why the brand has fell back in terms of percentage in the market they are at only about 5% sales in the market. The recent release of the “Quick Ain't Fair” shoe was a success because the commercial featuring John wall, Jrue Holiday and Damain Lillard and Rapper A$ap Rocky garnered them lots of attention and really left an impression on people. I have a pair of the shoes I use for basketball and its defiantly one of the best basketball sneakers from a performance stand point I have had ever. For Adidas its all about improving the roster to compete with Nike.

Another factor is if Derrick Rose can successfully come back from his injury and re establish himself as the best player in the NBA if that happens and he can lead the Bulls to a championship then the opportunities for increases revenue in a market like Chicago are endless for Adidas. Last season despite playing any games for the Bulls Rose made 25 Million$ for Adidas with no on court presence so imagine how much that will increase if he comes back and has a season like he did in 2011.

Reebok is surviving and thriving right now based strictly on retro releases such as the signature Allen Iverson “Questions” and Shaquille O'Neal's “Shaq Attacks” among others. They have no players on their roster to market because earlier in the year they would no longer be focusing their efforts on basketball performance sneakers and focus on retros. The last person who had a Reebok performance basketball shoe was John Wall and his sales only collected 5 Million$ which is equivalent to Dwight Howard. The brand has such a tremendous history that it can survive strictly off of retro releases but don't expect them to compete with Nike.

Another thing you have to factor in is Lebron James and the Success of his Lebron 10. Along with his on court success he past it at retailers selling 300 Million $ worth of shoes this past season which led the league. If you are into ratio's that’s 6-1 for the next closet shoe. The sales of this years signature shoe was 50% increase from 2011 and its the most overpriced basketball shoe in the world usually averaging about 270$ per pair. As long as he is winning championships expect Nikes stronghold on the market to strengthen.

So the opposing company’s have a long way to go in terms of competing with Nike/ Jordan Brand but one thing that could seriously help those company’s like Under Armour or Adidas would be landing the next big thing as far as sneakers go in basketball which would be Andrew Wiggins. He is Canadian,there is a serious buzz to his name and people love watching him play . So not only do people love watching him play but and he has crossover appeal to him. Sonny Vaccaro who is in the sneaker industry says that Wiggins may have 3 company's bidding on him to endorse product as well as commanding Lebron James money. Landing a guy like him could elevate under Armour and Adidas.

Lots of things in Nikes favor but all giants must fall at some point and it may be awhile before Nike ever does but lets remember that Nike didn't always have a stronghold on the basketball sneaker market. Lets also remind ourselves of great and innovative sneakers were when there was no monopoly.

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