Nike losing teens in footrace with Adidas, analysts say

The investment bank and asset management firm Piper Jaffray released the findings of their latest biannual “Taking Stock with Teens” Survey, MarketWatch reports, and apparently, Nike is losing touch with teenagers. Instead, the demographic seems to be spending more with Adidas and Amazon.

Before you throw out your swoosh-covered sweats and socks, Nike (NKE) still holds court as the top clothing and footwear brand. The survey does relay that the sportswear giant is among the top brands that experienced the largest declines. Other household names that suffered sharp declines include: Ralph Lauren (RL); Steve Madden (SHOO); Ugg, (DECK); Fossil (FOSL); and Michael Kors (KORS).

Under Armour (UAA)  also took a hit from the survey, with teen males ranking it as the No. 1 brand classified as “old.” According to CNBC, Under Armour only got one vote among upper-income females as a brand favorite. Nike vs. Adidas aside, it actually seems as though the entire athleisure trend is beginning to lose favor with the teenage demographic. Only a third of teens chose athletic apparel as their preferred fashion pick, down 40 percent from last year. The overall trend moved towards festival fashion.

Piper Jaffray polled 6,100 teens across 44 states for the survey. The average participant’s age was 16; the average household income was $66,100.

After examining the results, analysts were most surprised by Nike’s decline compared to Adidas’ (ADS) surge in popularity. Adidas “doubled its mindshare,” going from 2 percent to 4 percent. Even with their rise, Adidas didn’t fully offset Nike’s losses.

“Overall, larger brands are ceding share for small brands,” Piper Jaffray analysts noted.

Analysts highlighted brands like Vans (VFC) and Supreme as rising in popularity.

Other familiar names ranked highly in the survey as well. Starbucks’ (SBUX) siren call resounded with teens from upper-income households (average yearly income of $101,000) as their top restaurant; it also ranked first among teens from median income households, those bringing in $55,000. Netflix (NFLX) chilled at the top for daily video consumption. Snapchat was the fan favorite for top social media platform. Turns out that teens don’t diverge much from their grownup counterparts when shopping, picking Amazon (AMZN) as their online retailer of choice.

One reason why Amazon has consistently ranked as teen’s favorite site for the past three years could simply be that the company knows their customer base well. Recognizing the opportunity to turn teen shoppers into lifelong customers, Amazon just announced that teens between 13 and 17 years old can now shop on their site with a personal login. Parents or guardians will receive an email or text with order details. Parents can then either approve the purchase or even set limits on their child’s spending.

Christian Magoon, CEO of Amplify ETFs, pointed out that Amazon’s strategy to capture a younger demographic was good for the company’s longevity, considering entire households can now be raised using Amazon smart home products.

“Younger generations rebel against things that are static,” Magoon highlighted, reasoning that other retailers should take notes from Amazon’s strategy.

“Amazon continues to innovate and grow,” he continued. “We’re not at peak Amazon. People are still excited about what’s next.”

Overall though, teen spending is down 4 percent compared to last year, CNBC reports. Teen spending accounts for 7 percent of the country’s retail sales, amounting to nearly $830 billion yearly.

J.C. Penney Toying with New Store Idea

J.C. Penney has plans to introduce toy stores within its department stores in an attempt to draw in more customers along with their families. The efforts are intended to recapture part of J.C. Penney’s past spirit when their stores drew in both children and their parents through their holiday catalogs.

In order to reestablish a firmer foundation considering the tenuous times retailers are currently facing, the chain is hoping to capitalize on the opportunity that toy stores offer. The desired end result is to mimic the successful results after the retailer decided to revive toy sales during the 2016 holiday season for the first time in years.

Instead of toy departments, J.C. Penney plans to add toy shops permanently to all of its stores, which is currently cumulative to more than 1000 locations. The chain has already introduced toy shops to 100 stores, and is planning to accommodate the back-to-school special event through an expansion of its assortment.

This companywide rollout is a demonstration of the aggressive measures the retailer is willing to take to demonstrate its competitive edge and relevance amidst the ever growing influence dominated by Amazon.com and more flexible competitors with physical store locations. This is the first company to introduce toy venues as a means of attracting more customers, as other retailers including bookstore chain Barnes & Noble have also bet on commercial merchandise targeted at families.

The decision is based on the year-round demand to buy toys, and by creating not only fun and creative toys but a reflective environment in which to sell the toys coupling the biggest brands and most popular products will encourage higher traffic for both the toy stores and the surrounding departments. The idea is to increase both the turnover and revenue generated by customers, even buying a single, simple toy is an increase in the company’s revenue stream.

The toy shops will be displayed together or peripheral to Disney Collection products, and will feature a wide range of items, including dolls, actions figures, and board games. These toys will be developed in collaboration with Hasbro, Mattel, and Fischer Price. The toys will also be available via the company’s website, with plans for the current selection to double in size as well as add additional items in tome for the 2017 holiday shopping season.

The introduction of toy shops also serves another purpose as an experiment for store-within-a-store concepts. This concept also for more efficient use of space while also opening up locations for brands that either were too late to claim a location within the chains department stores, or were unable to commit to a full-sized department. J.C. Penney has had previous success with this setup, handling floor space over to beauty products firm Sephora and athletics apparel company Nike. Toys assimilate better into the design of beauty products, as customers are encouraged to play with display models and develop and affinity for the product prior to purchasing.

It is important to continue innovating new ways of attracting customers to your stores, which J.C. Penney has faced firsthand as its foot traffic has decreased due to digital competition and fast-fashion competitors such as H&M and Forever 21. It is important to note that there is balance that needs to be maintained, as using toys as a means for drawing customers is beneficial so long as it does not replace the intentions of customers visiting the chain. Otherwise, J.C. Penney may find itself solely in the business of selling toys, and no longer a department store.

J.C. Penney has reported its need to close 138 locations recently, and while it is doing better than its main competitor Sears Holdings, the toy shop concept will be an important factor in determining its future.

Six Smart Watches for All Your Needs

The release of the Apple Watch got a lot of people interested in the smartwatch market, but Apple isn’t the first to come out with a product like this, and they won’t be the last.

The newly released Apple Watches are being praised for all of their new features, but a lot of the features that the Apple smart watch has can be found in other types of smart watches.

The type of smart watch you choose to get should depend on what you’re going to use it for, not on the brand it is.

Fitbit is a fitness based smart watch, has come out with a long line of smart watches ranging in prices. As the prices goes up, there are more features that comes with it. The cheapest model called the Zip is advertised to be for everyone. It costs $59.95. It has a touch screen display, and is made to clip onto your waist band, or belt loop.

The most expensive Fitbit watch is the Charge HR and it costs $149.95. This watch will track your caller ID, and your sleep. This is a thick band that goes around your wrist. This is also the only band that will track your heart rate.

The Zip by Fitbit offers users a compact fitness tracker to take on their daily workouts.
The Zip by Fitbit offers users a compact fitness tracker to take on their daily workouts.

According to Fitbit.com, “Monitor calorie burn, maintain workout intensity and more – all without an uncomfortable chest strap.”

Nike is another smart watch that has been on the market for a while. They started a line of fitness bands in 2012 but have since discontinued them. Now there is the Nike+ SportWatch GPS. This will track you as you run, connect you to other runners, allows you to set goals, and track your progress. The product also allows you to connect to Nike+.

The Nike+ Sportwatch GPS looks most similarly to an actual watch, and with backlit LCD display, it can be used for any time of the day.

The Samsung Gear S smart watch has put everything that you could possibly want from a phone into a watch. The appeal of the watch is that you won’t have to have your phone with you all of the time, and if you leave it at home, or at your desk, and you can still get all your updates.

The watch does have fitness capabilities, but is advertised more so as an alternative to a cell phone. The watch has downloadable apps, and features to allow you to call, text and email.

However according to Cnet.com, “I tried using it on its own, as a true independent smartwatch. Well, I should say “independent,” because if you’re going to use the Gear S, you’re still best off bringing a phone along.”

The Nikesport+ Sportwatch GPS helps track your exercise and where you run.
The Nikesport+ Sportwatch GPS helps track your exercise and where you run.

This watch goes for $349.

The last watch to consider before you purchase the Apple smart watch is the Android Wear. This watch comes in many different shapes and designs. Depending on which watch you choose, you will be able to receive different features, and the watch will have a different set up.

This smartwatch has similar features to what the other smart watches can do, it has GPS, allows you to play music, and use the internet.

The difference comes in the different styles, making it the most diverse option of all of them. The Moto 360 looks exactly like a watch.

Android.com describes it as, “a modern timepiece powered by Android Wear.”

This allows for people to glance over at their watch, but not be consumed by it, and the shape and style makes it blend seamlessly.

The LG G Watch looks similar to the other smart watches with its square shape, and a long running battery, and the display is always sup for you to look at it.

Never worry about leaving your phone behind with the Samsung Gear S which will do everything your phone can do without even having it on you.
Never worry about leaving your phone behind with the Samsung Gear S which will do everything your phone can do without even having it on you.

The Android has a long list of different styles that do different things. The most important thing to keep in mind, when shopping for a smart watch, is to make sure you’re going to enjoy all of the features, because they are a large investment to make.

 

Adidas And Nike Battle Out Business Rivalry During The World Cup

As many know, Nike and Adidas have an ongoing rivalry that has yet to be settled. No one has ever been able to say which brand can officially be crowned the winner. What’s a better way to compare the two sporting companies than with The World Cup? Well, it turns out the two competitors both put up tough battle throughout the games in order to win customer votes.

Nike sure made a name for itself having soccer-related income raise 21 percent to $2.3 billion in the fiscal year that ended on May 31. “I promise you it will continue like that in the next year,” Chief Executive Officer Mark Parker told the Handelsblatt daily in an interview, according to Reuters

This overwhelming confidence that Nike holds is justified after shoe sponsor Mario Götze of Germany scored the only goal to make Germany World Cup Champions. Nike received a big boost of popularity after its name was written all over the winning finish.

Nonetheless, Adidas shouldn’t be ruled out of the competition just yet. The company still has strong ties to the event given its jersey deals with both of the finalist teams. In addition, Argentina stars Lionel Messi and Thomas Müller rocked Adidas cleats on the field, according to Bloomberg Businessweek.

Adidas Chief Executive Officer Herbert Hainer said that the company was investing a “double-digit-million sum” in World Cup advertising, according to Bloomberg Businessweek. It appears to be that this heavy spending paid off, too, because Adidas is now expecting $2.7 billion in soccer-related income.

So then who won? Both sporting companies created a strong fight within the industry. Maybe the decision should be left up to personal opinion, after all – but then again, maybe not.