Why sneaker labels are turning to tech

As Paris vibrated with anticipation on the eve of the Olympics (July 25), the city’s tech insiders were busy preparing for a different kind of debut. On, the functional sneaker brand turned cult favorite, was gearing up to unveil its latest development to the world – a robot-powered, spray-on sneaker that takes just three minutes to produce. Coined the Cloudboom Strike LS, the shoe is created using LightSpray technology, which involves an automated robotic arm spraying recyclable thermoplastic into a one-piece upper. The upper is later affixed to a sole using thermal-fusing technology, giving the design a sock-like effect. Tech-first footwear was a common theme at the 2024 Games, with Nike also making an Olympic comeback with its Air innovation concept. Presented during a special Paris summit in April, the sports stalwart revealed 13 AI-generated sneakers co-created alongside athletes including Kylian Mbappé, LeBron James, and Sha’Carri Richardson. The goal behind the project, Nike’s team said during the conference, was to reaffirm Nike’s position as an industry leader. Footwear labels deploying technology is nothing new. But with artificial intelligence and the blockchain nudging its way into public consciousness, paired with a stalling sneakerhead culture, there’s been a renewed focus from brands to move the needle of innovation. Sales down, competition up This pivot to more tech-heavy endeavors arrives at a critical juncture for the sneaker market. Last month, Nike forecasted a surprise drop in fiscal 2025 revenue, hurt by faltering demand, while Adidas recorded an operating profit of $293 million last year, down almost 60% from 2022. The once-booming sneaker resale market is also suffering, with the value of holy grails, like Nike’s Air Jordan, slipping due to oversupply. While staple silhouettes, such as Adidas’ Samba and Nike’s Cortez dominate the streets, seasoned collectors are hungry for something new. Cue brands investing more aggressively into tech; a fertile arena poised for impressive growth. According to analysts, the AI-driven footwear market is anticipated to reach $551.9 billion by 2028. For Nike, the advent of digital tools is helping leverage the brand’s production process, alongside its design prowess. “We can make better products faster, with more precision, creativity and deeper collaboration,” Vice President of Nike NXT Footwear Innovation, Kathy Gomez, told Jing Daily earlier this year. The company currently deploys 4D motion capture tools alongside its AI capabilities to help optimize product development. German-American footwear pioneer Zellerfeld is adopting a similar approach. The company specializes in cutting-edge 3D technologies designed to enable more intricate designs on a greener scale. In June this year, it launched a new 3D printing commerce platform – backed by SpaceX, PayPal, and sneaker resale site StockX – aimed at removing barriers for creators and brands. As rivalry heats up, frontrunners are banking on emerging tech to help boost their competitive edge. Nike, for instance, has begun deploying augmented reality through its Nike Fit virtual try-on service, designed to give consumers a detailed first look at products from the comfort of their homes. Nike’s aggressive investment in novel tech is expected. Over the years, unsuspecting competitors such as On (which recently announced a surge in second-quarter revenue to $645 million, up 27.8% YoY) and Hoka have started clipping at the heels of the brand. Sportswear underdog-turned-rival New Balance also recently revealed its plans to reach $10 billion in sales within the next few years. NFTs and the blockchain The proliferation of blockchain technology has presented brands with fresh growth opportunities. It’s also helping them tap into a new wave of consumers. “Emerging tech like AI and blockchain are giving the sneaker game a serious upgrade,” Jeremy Merrell Williams, tech expert and founder of fashion growth lab Vyudu Inc tells Jing Daily. While still in its infancy, the sneaker sector was one of the first to embrace blockchain-powered goods – though brands haven’t always got it right. Last May, Nike’s inaugural Dot.Swoosh NFT sneaker drop sparked backlash as collectors endured hours-long waits due to a site crash and slow minting process. Despite hiccups, the project still generated over $1 million in sales, underscoring the high demand for digital assets in the sneaker space. Meanwhile, Web3-native startups like Sol3mates – the sneaker label conceived by Dubai-based luxury innovation hub Chalhoub Group in March 2023 – have been storming ahead with blockchain-connected footwear. Nick Vinckier, co-founder of Sol3mates, attributes the brand’s success to seamless on-chain authentication, a community-first design approach, and using NFTs to unlock exclusive perks. These strategies, he says, keep Sol3mates "at the forefront of innovation while preserving sneaker culture's core values." The idea isn’t to just offer freshness to die-hard sneaker fans bored by the recent lack of innovation, but also appeal to tech-savvy proponents. Nike-acquired digital studio RTFKT – regarded as the top dog of Web3-connected footwear – has found success through tapping into both Web3’s creator-economy and sneaker culture’s love for community. By last November, the brand had reportedly generated $1.4 billion in trading volume (equaling around $170 million in earnings), citing its CryptoKicks and Clone X collections as key profit drivers. Performance outweighs novelty Sol3mates and RTFKT’s success serves as a lesson for larger retailers adopting cutting-edge developments. However, as emerging tech becomes ubiquitous, brands can no longer depend on novelty alone to spur sales. “For me to cop a pair of tech-powered sneakers, they’ve got to bring more than just the hype,” says Williams. An avid sneaker enthusiast, Williams stresses the importance of utility. “They need to deliver real value, like tracking my workout, giving me feedback, and adapting to my movements,” he says. “If they can’t perform and last, it’s a hard pass. Novelty’s cool for a minute, but I’m looking for that long-term game.” In the case of On’s LightSpray tech, the project has generated buzz thanks to its uniqueness. But performance innovation is an entirely different ball game. To prove itself as a serious player, the brand enlisted athletes to put the sneaker to the test. Such as during the Paris 2024 Olympics, where Kenyan champion distance runner Hellen Obiri donned the sneaker during the athletic marathon on August 11. While On’s high-stakes gamble may have paid off – Obiri claimed Bronze with her time of just over 2 hours and 23 minutes – how the shoes will fare among the average consumer remains uncertain (the sneaker is slated for a public release in the fall). With fashion and sport accelerating into a tech-driven future, staying informed on new advancements like AI and the blockchain can prove beneficial. But true staying power depends on whether brands can get the balance of novelty, longevity, and practicality right.

Why sneaker labels are turning to tech

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Published August 16, 2024

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Why sneaker labels are turning to tech