Adidas: Marketing a $250 Running Shoe

I've know for a long time about the new Adidas shoe with a computer chip in the sole, but I didn't know much about the business issues driving the decision until I saw this article in Businessweek.

No one knows if even serious runners are ready to pay $250 for a shoe — more than 50% above the next most expensive sneaker on the market. Nike Air Jordans, at $150 to $175 a pair, only staged a comeback last year, after two years of sinking sales. Adidas won't divulge its capital investment in Adidas 1. But analysts say production is complicated and that the new sneakers will cost four or five times as much to make as a normal shoe. Because of that, production will be less than 10,000 this year to drive exclusivity and hedge Stamminger's bet.

I run a lot, and I spend a lot of money on running shoes. I bet the Adidas shoe works really well. But let me tell you – for $100 I can get a very good running shoe. Is this computerized Adidas more than twice as good? I doubt it. My guess is, rather than sell a lot of these shoes, they hope to instill Adidas as the "king of running shoes" in the mind of the public and hope that the existence of the computerized shoe drives sales of other models.

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