The Rise of 3D Manufacturing in Footwear: What it Means for Nike
Additive manufacturing within footwear and apparel has the potential to completely alter the customer retail experience as well as supply chain design for the largest players in the industry. How are Nike and Adidas deploying resources to capitalize on this shift?
Blue Ribbon Sports, co-founded by Phil Knight and Bill Bowerman in 1962, began as a US distributor for Japanese shoe manufacturer Onitsuka, selling merchandise from the backs of cars at local track meets. Over 50 years later, we now know Blue Ribbon Sports as Nike – the top manufacturer of athletic footwear and apparel in the world, with a market cap of $120+ billion and annual sales exceeding $36 billion [1]. The backbone of Nike’s transformation over the last half century lies in its core competencies: product innovation, performance optimization, and savvy marketing.
Nike operates in the highly competitive sports apparel and footwear industry, comprised of a small number of global companies that dominate the market. The challenges of the industry are apparent; constantly changing consumer preferences, demand for frequent innovation, and management of a complex, global supply chain. Additive manufacturing has the potential to alter this competitive landscape, and the major players have recognized the need to get in front of this megatrend.
Additive manufacturing is quickly making inroads into the sports apparel and footwear industry, and for good reason. First, it enables rapid prototyping, saving development and lab time, which is ideal in an industry that requires constant tweaks to optimize product performance. Second, it has the potential to transform what was once a highly labor intensive process to one that is highly automated, which would allow for supply chain simplification and a shift back to local production. Third, 3D manufacturing provides opportunities to produce items economically in smaller quantities, enabling high levels of customization. Lastly, it gives manufacturers the ability to use new types of material that improve comfort and performance. The need for Nike to be at the forefront of additive manufacturing is evident, particularly with Adidas already allocating significant resources to develop capabilities in the area.
Both Nike and Adidas have partnered with 3D manufacturing houses (Nike with HP, Adidas with Carbon), but with seemingly different strategies [2, 3]. While Adidas has already launched the Futurecraft 4D and has plans to mass market the shoe in 2019, Nike has had a more targeted approach, making custom shoes for elite runners.
Nike first collaborated with Olympian Allyson Felix during the 2016 Summer Olympics, designing a high end sprinting shoe based on Felix’s biomechanics and individual specifications [4]. More recently, Nike developed the “Flyprint” for Eliud Kipchoge, a professional long distance runner, where the benefits of 3D manufacturing were apparent. Nike described the process on their website: “The process of solving expressly for Kipchoge’s needs began in earnest in early 2018. Designers kicked off a rapid-fire prototyping phase (where they went through thousands of possibilities). Based on Kipchoge’s initial feedback, designers made updates to the shoe in hours, and it took only nine days to get the next round of samples to Kenya (most of this time due to shipping). Shortly after that, Kipchoge tested and approved the next version [5].” 3D manufacturing enabled this rapid prototyping, enhanced customization, and production speed, but thus far, Nike has limited its focus to elite athletes.
On the other hand, Adidas has plans to aggressively scale its 3D manufacturing capabilities, with the goal of becoming the world’s largest producer of 3D printed products. By the end of 2017, they had produced 5,000 pairs of 3D manufactured shoes; the goal is 100,000 by the end of 2018 and over one million by the end of 2019. To further cement its position in the space, Adidas has made significant investments in Carbon, one of the pioneers in the industry: “Adidas is helping Carbon, a startup with more than $200 million in funding but just over 200 people, build up its industrial supply chain—printing is currently being done at Carbon’s headquarters, in Redwood City, California. By the end of this year, Adidas will begin installing the machinery in its Speedfactory in Germany. Eventually, Adidas plans to distribute these printers across the globe, using Futurecraft 4D technology to achieve the holy grail of shoe design: footwear customized to the intricacies of someone’s individual foot shape and gait [6].”
Nike management should mimic Adidas’ playbook. Rather than focus on a small subset of elite athletes, Nike should focus on achieving mass market scale by ramping up its production capabilities and more broadly marketing a line of 3D products. Before long, consumers will have the ability to get a physical assessment in store, and have custom shoes 3D printed on site, completing transforming the customer experience. At this point, it looks like those shoes will be Adidas, unless Nike quickly shifts its strategy in the space.
Do you think mass customization is the future of the footwear industry (and apparel more broadly)? If so, how can Nike bridge the gap with Adidas, who is years ahead from both a production capability and technological perspective?
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- NIKE, Inc. (2018). Form 10-K. [online] Available at: https://www.sec.gov/Archives/edgar/data/320187/000032018718000142/nke-5312018x10k.htm#sAD78B2D999E50EC9413DE6693197C064.
- Nibletto, P. (2018). Nike teams up with HP to 3D print shoes for the NFL. [online] IT Business. Available at: https://www.itbusiness.ca/news/nike-teams-up-with-hp-to-3d-print-shoes-for-the-nfl/96745.
- Cheng, A. (2018). How Adidas Plans To Bring 3D Printing To The Masses. [online] Forbes. Available at: https://www.forbes.com/sites/andriacheng/2018/05/22/with-adidas-3d-printing-may-finally-see-its-mass-retail-potential/.
- Hazlegreaves, S. and Hazlegreaves, S. (2018). Allyson Felix ahead of the game with Nike’s 3D printed shoes. [online] EPPM. Available at: https://www.eppm.com/industry-news/allyson-felix-ahead-of-the-game-with-nikes-3d-printed-shoes/.
- Nike News. (2018). How Eliud Kipchoge Helped Perfect Nike’s 3D Printing Process For Uppers. [online] Available at: https://news.nike.com/news/eliud-kipchoge-3d-printed-nike-zoom-vaporfly-elite-flyprint.
- Fast Company. (2018). How Adidas Cracked The Code Of 3D-Printed Shoes. [online] Available at: https://www.fastcompany.com/90138066/how-adidas-cracked-the-code-of-3-d-printed-shoes.
I agree with you that Nike is making a mistake slow playing their 3D printing operations. I am trying to understand why Nike would choose this strategy as their doesn’t seem to be many downsides associated with 3D printing shoes. In fact, based on your post it seems like great operational efficiencies can be gained from the process. Additionally, Nike has always prided themselves on their ability to customize. What better way to customize then taking customer preferences/dimensions in the store and creating a shoe on the spot? Does Nike view the 3D printing technology as inferior to their normal shoe making process? Outside of performance/product development, the only other reason I can see for Nike choosing this strategy is a fear of weakening their brand. Perhaps Nike has determined that their consumers associate a negative connotation with 3D printing and do not want to risk hurting their brand equity.
@Alex – I wondered similarly re their slow adaption of 3D printing… it must be quality. I know Puma also uses 3D printing for prototyping, I wonder if Nike sees the benefit at that stage of production.
I do think customization will be a main feature footwear. As we see in other industries whether its fashion, food, or health personalization is moving forward. This applies to shoes too, especially athletic shoes. Different running gaits, or history of injury play into what shoes you wear (regardless of what the elite athletes wear). I think Nike would be smart to build out their 3D printing models. As leading innovators, they should beat out adidas in this area to maintain their edge.
Nike allows for some level of customization on their online shop through “Nike by You” (ability to chose design, color and messaging on shoe). I agree that they should invest in their ability to push customization even further to fit exactly their customer’s feet dimensions for instance through “automated” 3D scanning and printing.
While I agree there are definite benefits to scaling Nike’s 3D printing business, in the interim, Nike is well poised to take advantage of the capsule collection trend. In the fashion world, brands have historically released new collections every season, however, recently this has translated into consumer fatigue. Now many brands, such as Moncler, are releasing capsule collections on a frequent basis in order to create cachet and keep the consumer engaged. Nike, which finds itself in a similarly competitive space, could leverage its 3D printing business to implement a capsule collection strategy and differentiate itself from peers with longer lead times.
I agree with you that Nike should consider transitioning their strategy to making customized footwear for the mass consumers, rather than simply targeting celebrity athletes only, especially because their main competitor, Adidas, is already doing so. The question here would be how fast can Nike scale up their customization/personalized design process to make it accessible for consumers. Furthermore, the idea of having customized shoe designs getting 3D-printed in Nike stores would be a massive attraction to pull consumers into Nike stores.
I agree with the comments above that it seems to be somewhat of a no brainer to use this technology on something where customization is so valuable like shoes. Ultimately shoes are judged on comfort, style/ look and performance. My assumption would be that if Nike isn’t already doing this then they might have some concerns about 3D printing’s ability to replicate their current process in terms of delivering on those three objectives. But as long as the tech actually works (and it seems to), to me 3D printing offers much more customization potential than the current process for shoe design which ultimately should lead to better comfort and performance due to better fit. I would assume style/ look would be basically the same.
Great article! In line with many of the above comments, I am surprised that Nike is not taking 3D manufacturing to the general consumer given the expected benefits in terms of: i) reduced operational costs, ii) better fit for consumers, iii) consumers perceiving Nike as innovative.
That being said, their focus on working with top athletes and ensuring that they have access to leading innovation and that they have a great experience in terms of performance of product and speed of delivery is in line with their historic marketing strategy of acquiring top talent and letting that drive broad consumer demand. Moreover, perhaps Nike wants to perfect their use of 3D manufacturing, before they invest in a huge expansion to the general public.
Really interesting take on what the role of additive manufacturing will be for athletic footwear. I think these brands still have some work to do in terms of understanding what the demand is from consumers from customized products, though. Having personalized shoes produced via 3D printing is certainty a novelty, but what will people be willing to pay for it? And to what extent can they truly be personalized to be the best possible shoe for the individual? It is interesting to think about what kind of shift this technology might drive, since the market is largely driven by trends. For example, people like to get the same popular shoe that they see everyone else wearing, or that they see a famous athlete wearing. If there is a move toward mass customization, how do brands like Nike own the shift from managing trends to managing personalization?
I think that mass customization is the future of the footwear industry (and potentially the apparel industry). 3D printing could bring personalized products at affordable prices to the masses. There will also likely be strong demand for a shoe that is made for you. I actually think that it is okay for Nike to focus on the elite athletes while Adidas focuses on the mass market. It gives Nike the opportunity to perfect its own process and learn from the mistakes Adidas will inevitably make (as every first mover does).
Great article! Thank you for sharing. I was able to learn a lot about additive manufacturing and Nike’s role in utilizing this technology. I also appreciate your analysis on the challenges that today’s company will encounter like Nike with fierce competition, management of complex supply chains, and rapid changes in consumer preferences, which makes the role of 3D printing and rapid prototyping important to stretch Nike’s innovation capabilities in a way that is at the same time cost effective. While thinking about the concerns you’ve raised around Nike’s narrowed focus on its target customer and the need to perhaps follow Adidas’ playbook’s although I agree with you that it will be a good area to expand to. I’m curious to get your perspective the execution side.
Great article and discussion. I wanted to highlighted another benefit of Nike’s additive manufacturing process that hasn’t been mentioned thus far, which is sustainability. Nike’s Flyknit shoes are made with Flyleather, which is made from 50% recycled leather fiber. According to Nike: “Flyleather is both sustainable and high-performing, with the potential to be as game-changing as Nike Flyknit. During the typical leather manufacturing process, up to 15% of leather hide falls to the tannery floor and often ends up in a landfill. We gather the discarded leather scraps from the tannery floor and turn them into fibers that are combined and fused into one material.” (https://sustainability.nike.com/waste)
As we learned in Marketing class, Nike may be wary of advertising sustainability given it wants consumers to buy their products because they are the highest quality (and not to think that some sacrifice was made on quality in order to make them sustainable), but sustainability is another great benefit of Nike’s Flyknit additive manufacturing process.