Nike Inc.’s market share is poised to expand, as both its processing and delivery times are faster than competitors
Source: Why Nike Inc keeps winning | Financial Post
As always my goal is to analyze the sneaker business and entertain so I should tell a joke right here and then get to the info, but I won’t. I’ve beat the topic of Nike’s Stocks into the ground. At least I gave a really clear analysis instead of just sharing a post and not really getting into it (I see you other sneaker sites out there). After doing a bit more digging, I discovered the source link above about why Nike keeps winning.
News Flash: I said this reason why years ago and people kind of felt like I was just bigging up my own city, but this article confirms my entire discussion with one simple form of support: Distribution
I’ve been stating that Nike isn’t losing ground in the sneaker battle. My discussion has centered around the fact that there are shoe stores, online and brick and mortar disappearing around us everywhere and this is a direct result of Nike’s decision to provide more revenue for their shareholders by building their DTC market. In order to build this market the distribution has to be in place. It’s like Frank Lucas trying to sell Blue Magic without cornerboys… you just can’t do it. For Nike this meant that being in Memphis was critical to their growth after their big slump in the 80s.
The source link article above gives a breakdown of why Nike is outperforming its counterparts and under the surface what isn’t mentioned is the fact that Memphis is home to Swoosh distribution. Not Portland or China or anywhere you would think, Memphis. Memphis is also home to Fed Ex’s shipping hub. You know who handles smart post by USPS? Fed Ex. In other words the speed in which Nike can get your packages to you enhances its DTC and in turn creates a company that can outperform. What does this mean for Under Armour and Adidas? You better get smart like Asics, who has a warehouse just south of Memphis in Byhalia, Mississippi and figure out how to get a hub here in Memphis. Even New Balance has done this by opening one just above Memphis in St. Louis.
