Source: Nike. Just Do It
Video Breakdown
- 0:00 Intro
- 1:00 Price Increases
- 3:00 Under Retail
- 5:00 Supply Chain Driven Price Increases
- 6:29 Casual Fans vs Cash Customers
- 7:50 Driving Cool
- 9:49 Air Force 1 vs adidas Samba
- 14:37 The Samba Data
- 16:00 Sneaker Observation video
- 18:42 Wrap-up
- Jordan Zion from $110 to $140
- Jordan Retro from $190 to $210
- Nike Dunk from $90 to $120
- Air Max 90 from $110 to $130
- The Ja 1 hasn’t been out for a year and it’s already had an increase from $110 to $120
Nike experienced a moment like this in 2015. There were flash sales, discounts at brand partners, and the resale market was beginning to implode. Resellers flooded the third-party marketplace with shoes they couldn’t flip and Amazon and eBay were overwhelmed with counterfeits. Today resellers are again flooding marketplaces with product they’ve failed to flip leading to new categories on sites like StockX and GOAT. These resale platforms formerly touted their websites as the place to flip high end sneakers. They are now boldly claiming “Under Retail” and “Under 100”. Nike itself, in ads being shown via Google Adsense, is proudly stating “Always Under 100” and when a visitor to the Nike site begins to type “under 100” the search delivers a page with over 1000 products: Products. Nike.com.
In 2021 supply chain issues created ridiculous demand and fluctuations in inventory. Nike needed to offset freight costs and they raised prices. Since 2022 things have settled, but Nike continues to raise prices and it could be the straw, or to use an analogy I discussed on the recent Neustreet podcast, Nike could be draining its own moat. At 26 minutes into the discussion, I explained this concept. Take a look:
Nike has been increasing prices and the adjustments are reverberating throughout the sneaker industry. While the TikTok and social media driven fan of the Air Force 1 is moving on and the “moat” around Nike is still buying, these price increases are actually shaping how Nike’s cash customer is beginning to view the brand. It’s difficult to show how the cash customer is slowing down, but it’s not hard to show how the casual Nike fan has changed direction when it comes to Nike. Using one SKU from 3rd party, the all-white Air Force 1, which has gone from $90 dollars to $115 dollars in the last four years, there is clear evidence that the once coveted sneaker isn’t selling through as quickly as they once did.
The Uptown can be replaced by any range of sneakers Nike has overproduced and made readily available. Once popular models which drove resale, the Dunk, Jordan 1 and Air Force 1, no longer drive FOMO. Nike always created cool. In the last ten years Nike allowed resale to become a measurement of cool. The expansion of sneaker culture during these years was due to the ability of people to flip these kicks into profit. Nike traditionally utilized marketing to create true fans, but the sneaker echo chamber drives the narrative now and unfortunately for Nike in this one SKU an x-ray showing the cracks in the foundation is available. The SKU: CW2288-111, the all-white Air Force 1 in men’s sizing delivers information which should be troubling to Nike.
One SKU vs One SKU
In order to correctly establish a shift, an alternative data set has to be delivered. adidas lost Ye and Beyonce, but former head of North America Rupert Campbell, who inherited a messy marketplace leaned on his experience in Europe and slowly began to delve into the adidas archive to revive the triumvirate of Samba, Stan Smith and Superstar. Samba B75806 is in no way on the level of sales as the All-White Force, but it’s important to note the adidas Samba doesn’t have wide distribution and isn’t readily available like the Air Force 1. adidas, unlike Nike, has taken a more moderate approach to the marketplace. The data below when compared to the Nike 3rd party data above, obviously shows how Nike is the dominant brand, but as I stated in the Neustreet interview, this is how erosion starts.
The Samba’s growth year over year is 1,335% with an increase in the average sold price from $96.16 to $126.77 (32% increase in value) added to the random observation of streetwear (what people are wearing on any day on a relaxing Saturday afternoon) and you get a cross section for analysis: the person who is possibly being influenced by social media and the everyday person.
Shoe Observation Video Breakdown in Video
- Merrell 1
- Brooks 1
- Crocs 1
- Golden Goose 1
- Teva 1
- Tracksmith 1
- ASICS 1
- Saucony 1
- On Running 1
- Converse 2
- Vans 2
- New Balance 3
- adidas 3
- HOKA 5
- Nike and Air Jordan 7
Nike is a 50 billion dollar a year company. One thing could never break the camel’s back. The conquering of a kingdom arrives in waves, both large and small. Water has eroded the foundation of the greatest structures in history. No brand or company is immune. Erosion is a slow process but always happens when items are in disrepair. Manmade castles, like glaciers melting, mountains falling, and valleys being created, all collapse after years of neglect. Nike’s neglect appears to be unconscious and the elements Bk, Hk, On, Sc, Ad might find a way if the Swoosh continues to increase prices.
