When nearly 11 million viewers tuned in for Sunday’s rematch of the 2016 NBA Finals, it was clear that the focus was on the playoff-like intensity and the blooming rivalry between the Golden State Warriors and the Cleveland Cavaliers. In past years, brands have looked to steal the spotlight during the
Nick DePaula stated on Twitter this morning that the sneaker world won’t get to see any NBA All Star Game shoes from the Swoosh this year. Immediately, sneakerheads and pundits began stating that “Matt Powell was right,” and that “It was poor sales.” First Matt Powell was right about the sale of basketball shoes declining. He has access to the POS data to validate his position.
This is the thing about basketball being down, it’s not just basketball, but performance. Performance includes all shoes used for the actual sport they were designed for. Basketball is the most prominent.
Is the lack of an NBA All Star Game shoe a sign that Nike is giving up on performance? Is it a sign of failure?
In December after the Christmas Day schedule Nick DePaula wrote the source article:
In that article Nike Basketball Senior Footwear Developer Kevin Dotson explained, “We’re changing things up…For a long time, we had a great run and did some moments that you could count on every year that Nike was going to show up at. Like all good things, it’s about doing something new and something fresh.”
DePaula added on his Twitter, “Another consideration — Nike takes over NBA uniforms next season & can re-launch a full Uni + Shoe collection for LA’s 2018 All-Star Game. In recent years, Nike’s All-Star shoes drafted from the host city & are created over a year in advance. Location switch a factor for sure.”
DePaula is right on point. Although performance footwear sales were down, they still generated revenue, so “down” is a relative term. Nike made money on basketball, not as much as they would have liked, but Nike made money. It only seems natural to continue to build the category, but Nike has never settled especially when they lost ground to a surging adidas last year. There focus is now on sportswear, lifestyle, Express Lane, and updated classic running (Nike Presto Fly, Nike Lunarcharge). During the Fiscal 2017 conference call Matt Parker introduced a term, “Edit To Amplify”.
Edit To Amplify
The question, “Is The Lack of An NBA All Star Game Pack A Sign of Failure?” has an easy answer, No. Edit To Amplify means that Nike is now looking at limiting the amount of shoes released and they are looking at their data and releasing shoes that will have a greater potential for liquidation (On Nike’s NDC and SNKRS their limited release of the LeBron Air Zoom Generation sold out. The LeBron 14 Out of Nowhere sold out. The Kyrie 3 Black Ice sold out. The KD 9 The Sauce sold out. Kobe XI Ghost of XMAS sold out.) All of these shoes were limited Nike Basketball drops. There wasn’t a true XMAS pack this year at retail, but Nike’s XMAS shoes all sold out. It becomes reasonable to think that the All Star Game will see similar limited drops, but they won’t have an official designation as All Star Game Collection.
Nike’s DTC Growth Is A Reason For “No All Star Game” Shoes
This section is speculation based on real evidence that I experienced. When Nike began their push towards DTC which changed their focus on Futures, they increased inventory. Nike increased their inventory by forcing smaller retail outlets to take on more merchandise. They created “packs/collections” for every event and in order for stores to get Retros, they had to take on Nike Basketball product. As smaller stores began struggling to keep up with their payments, Nike also forced smaller stores to redesign or lose their accounts. Those smaller accounts began shifting Tiers. Some lost their Jordan Brand accounts and others simply stopped carrying Nike. Nike then allowed those accounts before they were closed to RTV their footwear. All of these Nike releases ended up on NDC Clearance, Nike Factory and Clearance stores. Nike had a steady supply of merchandise for their own sales platforms.
2016 DTC Is Finally In Place
Entering into 2016 Nike deemphasized Futures because they were no longer going to be the focus as the brands DTC growth increased and has become a better measure of the health of the company. SNKRS, NDC, Air.Jordan.Com are all channels capable of handling the sales growth Nike has attained. Closing out 2016 Edit to Amplify comes into play because the company no longer NEEDS to make as many shoes to get the same results as the wholesale channels provided specifically in a declining basketball category. Consider the LeBron launch has been limited. The Kyrie launch was a Quickstrike through NDC and then a pop up shop for The Warning. There has been limited shipment of Nike Basketball to wholesale channels (outside of the KD 9 which is everywhere and on sale). FootLocker Inc is the primary outlet carrying Nike Basketball. With DTC in place there has been,
No XMAS Pack,
No All Star Game Pack.
I can almost guarantee now that there won’t be a Nike Elite Pack/Collection this year. Why? Edit To Amplify. I wrote an article stating why I think Basketball sales will improve this year.