I’m starting this off with a statement from NPD’s Matt Powell. Why? Because he’s the OG of Sneakernomics and his data influences a lot of my research when I write something business related on the site. The only time it doesn’t completely influence my research is when I decide to break ranks and argue against his statements.
I’ve seen other sneaker blogs attempt to answer this question, but they can only rely on quotes and info from other sites. I was asked by T. Horvath why I thought Nike Basketball would begin to grow again and become strong.
For the record I said that Nike Basketball would improve this year and that the improvement started in Q3 (not noticeable enough to shrug off the poor performance overall) of 2016 and that it will continue to gain ground throughout 2017. In order to show how poorly Nike Basketball performed this year I have to reference two articles from this site. In these posts I discuss how I ignored trends that could be found in my own data because I was so big on Nike Basketball. In the chart below I show how my decision to lean on Nike Basketball cost me over 150,000 dollars this year in sales although I knew that the shift had happened.
Here is the article that shows my stupidity: How Nike Is Combatting Adidas NMD/BOOST
Here is the chart that shows my stupidity. Note the the beginning of the year and the decrease/drop off all the way through until July (Olympics):
If I have all of this data that shows how Nike Basketball has fallen off. If I have the data that shows how Adidas became the go to brand this past year (the NMD article), what exactly am I looking at to make the claim that Nike Basketball will be better in 2017? Disclosure: Part of my problem in pivoting from Nike Basketball was cashflow, but it was primarily my dependence on Nike Basketball that saw my drop from 400K last year to 250K this year.
This is why Nike Basketball will improve
1.The Price Adjustment – Nike made some ugly ass shoes in the LeBron 11,12 and 13. They weren’t off the court friendly at all. The same issues could be found with the Nike KD 6, 7 and 8. With these horrible designs came price hikes. Kobe at 200, LeBron at 200-250, and KD went to 180-200. After speaking with people at FootLocker who said they told Nike that the pricepoint was a major fail, Nike responded by introducing the Kyrie at 120.00 three years ago. This year the Kobe AD is at 160.00. The LeBron will retail below the price of Jordan Retros at 175.00, but this is a mistake as the better selling LeBron Soldier 10 was 130.00 retail and the KD 9 is now at 150.00.
The adjustments in prices actually saw my sales pick up for Nike basketball from the Olympics through December. My Q4 October 1st to December 31st data isn’t complete yet, but here is the data from 2016
| Date | Ordered Product Sales | Units Ordered | Total Order Items | Page Views | Sessions | Buy Box Percentage | Unit Session Percentage | Average Offer Count | Average Parent Items |
|---|
Q1 2016
| Total | $57,544.98 | 688.00 | 682.00 | 746,785.00 | 545,682.00 | 7.15% | 0.16% | 158.31 | 83.38 |
Q2 2016
| Total | $51,723.33 | 341.00 | 339.00 | 369,768.00 | 283,024.00 | 12.26% | 0.15% | 144.57 | 48.69 |
Q3 2016
| Total | $57,245.99 | 353.00 | 352.00 | 718,138.00 | 533,834.00 | 3.96% | 0.08% | 264.16 | 60.82 |
Q4 2016
| Total | $72,380.31 | 426.00 | 426.00 | 826,756.00 | 633,564.00 | 2.76% | 0.07% | 445.47 | 89.95 |
Obviously sales always pick up in Q4, but I did a major shift and followed the trend by adding a lot of Adidas into the mix, but in this video I will show that in 2016 when I carried primarily Nike products the store didn’t fare so well. The Kyrie has always been a solid shoe for me and remains so, but the KD 9 has been very good for me which I think speaks to the redesign of the shoes and Nike’s ability begin rebuilding interest in Basketball. Video at the bottom of this post
2.The Redesign of the Footwear – Nike Basketball took major cues from their running shoes and Adidas running and style shoes. If you look closely at the KD9 and LeBron 14 they look a lot like the Tubular series from Adidas. The Tubular series with adidas, if you look at the video has been a solid performer on my shop. Those style cues have made the KD a lot more acceptable to fashion and style conscious buyers. I’m not saying the shoes are flying off the shelf, because Nike continues to make the biggest mistake of all in Footwear: narrow ass shoes for people who are getting heavier. I’ve seen first hand people who want to buy the KD, but can’t fit into the shoe. I expect the same thing will happen with the LeBron and Kobe AD which hasn’t gotten very good reviews from my co-network partner at Housakicks. The redesign has made the footwear more appealing and this will help improve basketball.
3.The marketing is very clever and merchandising is fantastic
When you walk into a Kids Footlocker, or Footaction the storytelling behind Nike Basketball is extraordinary. Take the recent release of the Nike Kyrie 3: Kyrie & Questlove, LeBron 14, Curry 3 & JBL? on XMAS Means I Can’t Chill
When you contrast the work being done by Nike in cooperation with the retailers carrying the brand the emphasis on marketing is much better than it has been in the last two years. When you purchase a Kyrie 3 or any Kyrie, you get a poster to take home. The Kyrie 3/Questlove video has been viewed almost 2 million times in 1 week. In contrast the Curry 3 Make that old video has been viewed 5 million times over 2 months. Nike is no longer relying on Sneaker Blogs to carry the weight of its release schedule. They have created their own content creation for every release through SNKRS and Twitter which contributes to DTC. I discussed the fact that for Nike the Basketball releases are doing very well through their own channels. is this reflected in retail? Probably not, but check this out:
Should You Buy To Flip? The Surprising SOLD OUT Models on SNKRS
4.The NBA Season comes to life in February – I wrote these articles at the beginning of the NBA season (below) and I am sticking with my opinion that the NBA season will drive sales more as we enter All Star Weekend, Black History Month and the back half of the NBA season when limited releases and player exclusives are dropped.
10 NBA Stories That Will Repair The Broken Basketball Sales Machine
Insider Ties: Nike’s Inventory Challenge and 5 Reasons Nike Will Recover- The Motley Fool
I could go on and on, but I need to drop this video down here to support discussion point number 1.
Here are my final thoughts. When I say that Nike Basketball will improve, it will not bounce back from the drastic drop it’s seen. I’m saying that the sales for Nike BBall will go up in comparison to last year. I’m also saying that I actually think it will come back more than even Matt Powell is stating. Now he has the POS data and insider info that I don’t so his statements typically hold true. My data is always a micro to macro outlook, but in doing my calculations based solely on my shop I haven’t been wrong about footwear much. I may have been stupid and stayed with Nike BBall for far too long the last three years, but I really do see some movement back towards basketball. Let’s look at this again when Q4 numbers drop and Q1 numbers hit after March 2017.
Remember my data is a micro version that I say compares to the macro. It’s a very, very small sample.