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The 10 Greatest Sports Moments Powered by Nike Air — NIKE, Inc.
5. Nike used to be rooted in sport and nothing else mattered.
They created a culture sneaker brands attempted to mimic and most footwear companies looked to as a blueprint. As more shoe businesses entered the fray, Nike adapted, stood strong and told the athlete’s story. When Nike was reeling at the most important moment for the company, they launched an Investor’s Day (2017) which corrected the navigation. The brand looked poised to climb Everest.
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4. Nike Culture Began to Change
Lawsuits led to the removal of key C-Suite officials and the Swoosh began to shake. Stories surfaced about the mistreatment of women athletes. Layoffs have become routine and under the leadership of a tech guy as opposed to a Nike man, the brand began mirroring its audience. The cues for direction arrived from an echo chamber clambering for more collabs and drops which would drive resale and drive a strange community of people proud to share their Ls. Nike began operating from a “LIKE” button driven by behavior similar to tech companies. Nike still signed athletes and delivered marketing materials, but nothing resonates anymore. Nike’s navigation pointed away from the heart and soul of sport and towards margins without consideration for the consequences.
Nike’s Consumer Direct Offense/Acceleration took the Apple route without the iPhone as a buffer. Apple took away the ability for small repair shops to be certified. They forced their fans to visit the Genius Bar. Apple iOs became bogged down. Virtual machines which used to Windows on partitioned hard drives began having issues. Nike brought in John Donahoe, mom and pops disappeared the same way Apple repair disappeared. Apple stores became more important. Nike Direct became more important. Today, Nike has fewer partnerships in wholesale.
A major part of sneaker culture was the search for deadstock. Visiting small towns to discover a mom-and-pop shop that had a backroom full of sneakers no one bought. Once tech guys lost the ability to tinker with Apple computers, Apple had “I” suite of products to lean on. Nike for a short time had React, Air and ZoomX and Jordan to lean on, but as the mom and pop stores disappeared, bigger chains removed the art of discovery. A Foot Locker couldn’t broker a deal arbitrage began to die and Nike stopped creating newness.
Nike No Longer Sounds Like the Soul and Spirit of Athletes | Pending Nike Layoffs
3. Eavesdropping Instead of Leading
Nike celebrated The Top 10 Greatest Sports Moments Powered by Air recently. No one saw it. There wasn’t a breakout moment or a dope ad spot on YouTube. It didn’t land with the audience leading the conversation around sneakers because that audience doesn’t really care about sports and here is where Nike’s problems exist. Nike listens to YouTubers and sneaker talking heads who are more fashionistas and influencers than they are admirers of sport.
Those fans look at monetary value as cool. While scarcity has always driven the Nike machine, it was never driven by the pursuit of lifestyle over sport. Did Nike give the Cortez to Farrah Fawcett? Yes, but entertainers weren’t the focus and to be fair Farrah was on a skateboard, lol. Non-sport influencers weren’t the leaders. Nike created the product for the athlete and the consumer was enamored and empowered when they felt a connection to greatness. Travis Scott makes music. The association with Scott isn’t tied to the dream of being better and improving. The association is with the music being created. Where is the signature event for a musician? If the product has to be limited, where does the brand generate revenue when the focus is on fashion and influencers?
Sneakerheads may buy multiple pair of shoes per year, but an athlete rivals those purchases and Nike gave the athlete to Brooks, On and Hoka.
2. The Disconnect Between Retail and Corporate
Nike used to understand the life cycle of footwear. Edit to amplify changed the brand’s understanding of their supply chain. Nike would deliver a suite of kicks every month. Those shoes would remain at SRP. They would slowly move through the natural progression of the Full Price – On Sale – Clearance. For twenty years arbitrage allowed Nike to clear their coffers and replenish with a bevy of new footwear. Because Nike wiped out mom-and-pop shops traditional retailers like JD Sports and Foot Locker never approved of arbitrage and clearance buyers. Traditional retail placed policies in action limiting how much clean-up crews could spend and how much they could buy. Nike began allowing their traditional retail to RTV the product to Nike. In theory this would fill Nike Clearance Stores and Factory Stores, but those stores began limiting what could be purchased.
- They tore box tops off to prevent reselling.
- They banned bulk buyers and limited what could be bought.
- They stopped putting grails on the floors of their stores. This removed discovery from Nike stores.
Over the last 5 years Nike has effectively reduced the ability for arbitrage to take place and in doing so they disrupted and pulled the plug on an external supply chain operating without pay from the company. Nike’s corporate listened to the consumer and gave them everything they wanted without generating anything compelling and new. They gave the consumer a new iPhone when the old one worked fine, and they raised the price. The new corporate people told the retail arm to stop resell. They listened to influencers who said resellers were killing the business. Nike owned the data. Instead of utilizing it and adjusting, they flooded the market with the same model in different colors. New fans of the brand never got connected to the athletes because all of the sneakers were Jordan 1s, Dunks and Air Force 1s. All shoes created in the 80s long before these new customers were born.
1. Nike Increased Prices
The Air Force 1 was $90 dollars. It’s now $115.00
The Dunk was $85 – $90.00 dollars. It’s now $115.00
The Air Jordan 1 was $160. It’s now $180.00
Air Jordan Retros were 175-190. They are now $200-$225
The Air Max 90 was $100.00. It’s now $130 to $160.00
Nike saw the money being left on the table in resale and decided to capture those dollars. They increased prices across the board at a time when the middle class is struggling to pay for everyday items. They doubled down on three styles, flooded the market, removed wholesale partners to capture margins. Increased pricing to capture margins.
Fewer People Are Buying iPhones: Here’s Why | IBTimes this old article on iPhones sounds a lot like Nike. Nike began thinking of itself as a tech company that sells athletic gear. They used to be an innovative marketing company which catered to the athlete with sportswear. The Swoosh is dull. It’s still the biggest knife in the kitchen, but it can no longer slice with the precision needed to make cooking easier. The chefs of the world have decided to try smaller knives with razor edges and Nike allowed it to happen.