New running shoes hit the market all the time, so what explains the public relations blitz from Adidas this morning? A gutted office building across the street from the New York Stock Exchange was crammed with fancy beet-juice, world-class athletes, and people walking around dramatically barking “Join the revolution” into megaphones.
If not for the scrum of sneakerheads flown in from Japan and the bank vault full of footwear, the product release could have been mistaken for an Occupy Wall Street redux.
Apparently, the shoe in the spotlight is pretty good. Adidas executive board member Eric Liedtke claimed the new "Ultra BOOST" ($180) is the greatest running shoe ever (his words exactly). The last time the German giant had such a massive launch was two years ago, when it unveiled the original Boost, the prior iteration.
Boost comprises something called thermoplastic polyurethane, a rubbery substance used in timing belts and engine gaskets. Adidas says its secret sauce lies in how it treats the material, and apparently it has molded it into a pretty great running shoe. The company's running shoe revenue climbed by 14 percent last year, almost entirely because of Boost.
But is a refresh really a big enough deal to tear Jamaican sprinter Yohan Blake and Spanish striker David Villa away from training? For Adidas right now, it arguably is. Here are three reasons why:
1) Adidas desperately needs a win
Lionel Messi can score only so many goals, and in the recent World Cup, he didn’t score enough for Adidas. In 2014, a year when the company should have welcomed a major international soccer boost, it watched sales and market share bolt to Nike and other competitors.
In the first nine months of last year, Adidas profit slumped 19 percent. In North America, the company posted an 8 percent drop in sales in that period while losing its No. 2 spot in the sportswear game to Under Armour. Not surprisingly, Adidas shares have slid by 37 percent in the past 12 months.
2) Running is a great place to compete
It’s far easier to go on a jog than it is to round up 22 people and a bunch of tight pants and shoulder pads for tackle football. In the U.S., some 51 million people run at least once a year and 29 million log more than 50 days a year, according to an annual survey by Running USA. This is why running represents the largest market in sports apparel—roughly $3 billion in the U.S. alone.
What’s more, the market is still hugely fractured. Market share numbers are hard to come by, but Running USA surveys show ASICS as the No. 1 brand with just 22 percent of the market. If Adidas (which says it is No. 4 in the U.S. running market) has truly made the world’s greatest jogging sneaker, the rewards would be vast. In the current Adidas playbook, running is second only to soccer. “It’s somewhere where we’re not punching to our weight," Leidtke said. "So we’re relentlessly focused on it, now more than ever.”
3) The fashion crowd still isn’t that into three stripes
Quite possibly for the first time ever, running shoes aren’t just for athletes and khaki-clad dads. They are now the fodder of fashion blogs and the footwear of choice for both ladies who lunch and bright young things on benders.
The problem for Adidas, however, is that the fashion crowd is almost entirely beSwooshed; specifically, it is wearing a certain style of black Nikes with white soles. None of this is lost on the sneaker chiefs in Bavaria. "The trend opportunity in running is so much larger than the actual true runners," Liedtke said.
On Wall Street this morning, as the bass was thumping and iPhones were snapping away like lighters at a Grateful Dead concert, every sneaker on display was identical—black with white soles. Game on?
