bradley W.’s Post

Nike’s shift toward a direct-to-consumer (DTC) model is an interesting case study. While it seemed like a bold and forward-thinking move at the time, it came with unexpected consequences—plummeting stock prices, legal troubles and ultimately, a leadership shake-up. If I were in Nike’s shoes (pun intended), I’d focus on balancing the DTC strategy with a renewed emphasis on partnerships with retailers. Cutting out traditional retailers like Foot Locker left a gap in their distribution network and that’s something I’d work to rebuild. Strong retail partnerships not only expand reach but also help maintain a stable revenue flow, which Nike needs right now. Nike is an iconic brand, and while taking risks is essential for innovation, there has to be a clear path forward that aligns with consumer needs and investor expectations. I’d re-evaluate the DTC push, re-establish trust with retail partners and double down on customer engagement strategies to get back on track. What would you do in this situation? #NikeStrategy #RetailPartnerships #BusinessStrategy #BrandRebuilding #MarketingInsights

Just Did It. Nike has no time for losers - unless your name is Phil Knight. It is the same for Starbucks, who has no time for losers unless your name is Charles Schultz. "Nike is in the midst of a broader restructuring after it shifted its strategy to sell directly to consumers. Critics say in the process of building out sales at Nike’s own stores and website, it lost sight of innovation and failed to churn out the types of groundbreaking sneakers the company was known for." Personally the commentators are wrong. Nike and Adidas etc are coming off a supercycle that got interrupted by the pandemic that extended the supercycle. Nike is a premium mass market sports/casual wear company. That is unwieldy to say and more unwieldy to run. Now it is harder when one of your largest markets is in consumption downgrade; and also the US is grappling with inflation. Switching to a direct model - means you need more icons, more marketing so cost savings on retail rent, staff and administration is not 100%. It also commoditises the experience of buying a Nike apparel. IDK what the strategy for Nike should be - if it was clear and simple it would have been executed by now. Nike does have that Intel feel to it - in too many things because it is leading or near the lead in too many segments.

An interesting opinion piece that many could learn from. Marine apparel/gear brands in Australia for example… Four big strategic mistakes Nike needs to reverse. Error 3: DTC is a stage, not an end state Despite what we were all sold a decade ago by photos of fresh-faced 20-somethings in casual clothing setting up direct-to-consumer (DTC) brands with cool, misspelled names, these people were not ‘crushing it’ or worth billions. It soon became apparent that digital-only comms and an exclusively direct ecommerce channel would never turn a profit. They needed wholesalers and other retail partners for the extensive, widespread physical availability that enables you to win… More - https://lnkd.in/gak2AsRi

Nike's recent Struggles & What Brands Can Learn From It Nike's recent struggles teach us an important lesson in business strategy. Here's what happened: -> John Donahoe became the CEO of Nike in January 2020. -> Unlike many traditional fashion companies' management, he didn’t come from the fashion industry. -> He came from Silicon Valley, having led companies like ServiceNow and eBay. So, what was his plan to take Nike to the next level? -> He thought, Why are we paying wholesalers and retailers a chunk of our profits, -> When we can just enhance our digital presence and sell directly through the D2C (Direct-to-Consumer) channel? Wasn’t it brilliant? -> It actually worked! During the COVID period, when other companies were struggling, Nike was ahead of everyone in online sales. -> But this couldn’t last. John seemed to forget one crucial thing: Nike hasn’t been a leading brand just because of their products. -> It’s been their limited inventory and the sense of FOMO (Fear of Missing Out) among consumers. -> This can’t be replicated through the online channel. So, what happened next? -> Well, Nike has already replaced John with insider Elliott Hill, who has spent over 32 years at Nike in various leadership roles. -> They’re now backtracking by reopening partnerships with retailers and reducing their over-reliance on the digital channel. -> This just shows that not every company is suitable for all kinds of sales channels. So, what do you think about this? Did you know about this? Let me know your thoughts in the comments! Follow me (Paras Doda) for more amazing content Pic credit: Sneaker Freaker

During John Joseph Donahoe II's leadership, Nike experienced a notable decline in revenue.  In the fiscal year 2023, Nike’s revenue dropped by approximately 5% compared to the previous year, from US$44.5 billion to US$42.3 billion.  Market share in the athletic footwear segment decreased from 27% in 2021 to 24% in 2023.  This decline was partly due to increased competition from brands like Adidas and Under Armour, which capitalised on Nike’s weakened retail partnerships.  Nike’s stock performance reflected the challenges faced during Donahoe’s tenure.  From January 2022 to September 2023, Nike's stock price fell by nearly 15%, underperforming the S&P 500, which saw a modest increase of 5% over the same period.  The decision to cut ties with major retailers had a significant impact.  Sales through Foot Locker, which previously accounted for about 10% of Nike's total revenue, dropped by 50% after the partnership ended.  While initial sales of lifestyle versions of popular models like Air Force 1s and Air Jordans were strong, the lack of continuous innovation led to a decline in sales.  Sales of the Air Force 1 model dropped by 20% in 2023 compared to 2022. Cost-cutting is the play book of private equity to boost share value in the short term.  It does not address the loss of market share and decline in revenue.  In fact, cost-cutting measures led to reduced investment in research and development.  Nike’s R&D spending decreased by 10% in 2022 compared to 2021, which affected the pipeline of new and innovative products.  This reduction in innovation was reflected in the 20% decline in sales of key models like the Air Force 1 in 2023.  The cost-cutting strategy included significant lay-offs, which impacted employee morale and productivity.  Nike’s employee satisfaction scores dropped by 15% in internal surveys conducted in 2022.  This decline in morale was linked to a 5% decrease in overall productivity, as reported in Nike’s internal performance metrics. Efforts to cut costs also affected Nike’s supply chain.  By reducing the number of suppliers and opting for cheaper alternatives, Nike faced increased supply chain disruptions.  In 2023, supply chain issues led to a 7% increase in production delays, which in turn affected product availability and sales.  The decision to cut ties with several retail partners as part of the cost-cutting strategy backfired.  Ending the partnership with Foot Locker resulted in a 50% drop in sales through that channel, which previously accounted for about 10% of Nike’s total revenue.  Cost-cutting measures also impacted Nike’s brand perception.  Consumer surveys indicated a 12% decline in brand loyalty in 2023, as customers perceived a drop in product quality and innovation.  This decline in brand perception contributed to the overall decrease in market share from 27% in 2021 to 24% in 2023. Terence Nunis Terence K. J. Nunis, Consultant Chief Executive Officer, Equinox GEMTZ

During John Joseph Donahoe II's leadership, Nike experienced a notable decline in revenue.  In the fiscal year 2023, Nike’s revenue dropped by approximately 5% compared to the previous year, from US$44.5 billion to US$42.3 billion.  Market share in the athletic footwear segment decreased from 27% in 2021 to 24% in 2023.  This decline was partly due to increased competition from brands like Adidas and Under Armour, which capitalised on Nike’s weakened retail partnerships.  Nike’s stock performance reflected the challenges faced during Donahoe’s tenure.  From January 2022 to September 2023, Nike's stock price fell by nearly 15%, underperforming the S&P 500, which saw a modest increase of 5% over the same period.  The decision to cut ties with major retailers had a significant impact.  Sales through Foot Locker, which previously accounted for about 10% of Nike's total revenue, dropped by 50% after the partnership ended.  While initial sales of lifestyle versions of popular models like Air Force 1s and Air Jordans were strong, the lack of continuous innovation led to a decline in sales.  Sales of the Air Force 1 model dropped by 20% in 2023 compared to 2022. Cost-cutting is the play book of private equity to boost share value in the short term.  It does not address the loss of market share and decline in revenue.  In fact, cost-cutting measures led to reduced investment in research and development.  Nike’s R&D spending decreased by 10% in 2022 compared to 2021, which affected the pipeline of new and innovative products.  This reduction in innovation was reflected in the 20% decline in sales of key models like the Air Force 1 in 2023.  The cost-cutting strategy included significant lay-offs, which impacted employee morale and productivity.  Nike’s employee satisfaction scores dropped by 15% in internal surveys conducted in 2022.  This decline in morale was linked to a 5% decrease in overall productivity, as reported in Nike’s internal performance metrics. Efforts to cut costs also affected Nike’s supply chain.  By reducing the number of suppliers and opting for cheaper alternatives, Nike faced increased supply chain disruptions.  In 2023, supply chain issues led to a 7% increase in production delays, which in turn affected product availability and sales.  The decision to cut ties with several retail partners as part of the cost-cutting strategy backfired.  Ending the partnership with Foot Locker resulted in a 50% drop in sales through that channel, which previously accounted for about 10% of Nike’s total revenue.  Cost-cutting measures also impacted Nike’s brand perception.  Consumer surveys indicated a 12% decline in brand loyalty in 2023, as customers perceived a drop in product quality and innovation.  This decline in brand perception contributed to the overall decrease in market share from 27% in 2021 to 24% in 2023. Terence Nunis Terence K. J. Nunis, Consultant Chief Executive Officer, Equinox GEMTZ

“That’s not really our consumer, that’s not what somebody’s looking for us to do," said the CFO of Skechers, the shoe company. Over the past five years, Skechers share price has nearly doubled, while shares of Nike and Adidas have declined more than 25%. Strategy lessons. 💯 CUSTOMER FOCUS: Knowing what your customers want and what they DON'T want is the essence of customer focus. As reported by The Wall Street Journal " Nike has superstars. HOKA has tapped into hardcore runners. Tech bros are willing to pay up for On Cloud Shoes. Skechers thrives on retirees looking for comfortable kicks and families looking for something more affordable for their children." 💯 DELIVER VALUE: During the pandemic, Nike exited many retailers that catered to lower-income consumers and cut back on styles that sold for less than $100. Skechers doubled down partnering with retailers and on staying low priced. 💯 IMPLEMENTATION IS KEY: Skechers implemented relentless with focus and fidelity. On its website, it dedicates a section to showcase its comfort technologies -- not pictures of fancy athletes. 💯 COPYING COMPETITORS IS NOT BEING COMPETITIVE. "Me too" is not a strategy. Rather than trying to one-up its competitors, Skechers stayed true to the biggest drivers of value for its customers -- comfortable shoes at affordable prices. 💯 ATOMIC HABITS -- DON'T PLAN BY QUARTERS. It took Sketchers a while "Me too" is not a strategy. Rather than trying to one-up its competitors every quarter, Sketchers stayed true to its core strategy implementing it slowly and with fidelity -- it took more than eight years to build durable success. 💯 Reach out to Stratonomics if you want your strategy to be driven by science, customer focused, and implemented with fidelity and focus. #strategy #leadership

During John Joseph Donahoe II's leadership, Nike experienced a notable decline in revenue.  In the fiscal year 2023, Nike’s revenue dropped by approximately 5% compared to the previous year, from US$44.5 billion to US$42.3 billion.  Market share in the athletic footwear segment decreased from 27% in 2021 to 24% in 2023.  This decline was partly due to increased competition from brands like Adidas and Under Armour, which capitalised on Nike’s weakened retail partnerships.  Nike’s stock performance reflected the challenges faced during Donahoe’s tenure.  From January 2022 to September 2023, Nike's stock price fell by nearly 15%, underperforming the S&P 500, which saw a modest increase of 5% over the same period.  The decision to cut ties with major retailers had a significant impact.  Sales through Foot Locker, which previously accounted for about 10% of Nike's total revenue, dropped by 50% after the partnership ended.  While initial sales of lifestyle versions of popular models like Air Force 1s and Air Jordans were strong, the lack of continuous innovation led to a decline in sales.  Sales of the Air Force 1 model dropped by 20% in 2023 compared to 2022. Cost-cutting is the play book of private equity to boost share value in the short term.  It does not address the loss of market share and decline in revenue.  In fact, cost-cutting measures led to reduced investment in research and development.  Nike’s R&D spending decreased by 10% in 2022 compared to 2021, which affected the pipeline of new and innovative products.  This reduction in innovation was reflected in the 20% decline in sales of key models like the Air Force 1 in 2023.  The cost-cutting strategy included significant lay-offs, which impacted employee morale and productivity.  Nike’s employee satisfaction scores dropped by 15% in internal surveys conducted in 2022.  This decline in morale was linked to a 5% decrease in overall productivity, as reported in Nike’s internal performance metrics. Efforts to cut costs also affected Nike’s supply chain.  By reducing the number of suppliers and opting for cheaper alternatives, Nike faced increased supply chain disruptions.  In 2023, supply chain issues led to a 7% increase in production delays, which in turn affected product availability and sales.  The decision to cut ties with several retail partners as part of the cost-cutting strategy backfired.  Ending the partnership with Foot Locker resulted in a 50% drop in sales through that channel, which previously accounted for about 10% of Nike’s total revenue.  Cost-cutting measures also impacted Nike’s brand perception.  Consumer surveys indicated a 12% decline in brand loyalty in 2023, as customers perceived a drop in product quality and innovation.  This decline in brand perception contributed to the overall decrease in market share from 27% in 2021 to 24% in 2023. Terence Nunis Terence K. J. Nunis, Consultant Chief Executive Officer, Equinox GEMTZ

The parrallels for #STL write themself. In mid-2024 Nike had $27 Billion wiped off their enterprise value. Fundamentally, Replacing inspiring and memorable brand campaigns with tactical sales-driven messages weakened the emotional connection consumers had with the brand. This coincided with an attempt to squeeze out their channel partners decreasing visibility and animosity amongst retailers. “… the principles of physical and mental availability —two concepts… critical for brand growth. Physical availability is all about ensuring your product is easy to find and purchase. Think of it as being present wherever your customers shop — whether it’s in stores, online, or both. Mental availability, on the other hand, is about staying top of mind for consumers when they’re making purchasing decisions. It’s why you think of Nike when you need new running shoes, even if you haven’t actively been searching for them.” So is anyone looking for St. Louis? Does it pop into anyones mind when they think of a place to be or something they need? The answers to these questions, coupled with inspiring, visionary, and authentic branding will start turning the tide of decline in the region. #economicdevelopment https://lnkd.in/gif8p5jW

Is Nike Losing Its Swoosh? A Look at the Challenges and Opportunities Is Nike Losing Its Swagger? A Data-Driven Look at the Challenges and Opportunities Let's dive deeper with data and insights: ---Financial Snapshot: Revenue growth is slowing, profitability is declining, and operating expenses are rising faster than income. While North American sales are increasing, margins there are lower. China, once a powerhouse market, is slowing down. --Shifting Strategies: Nike's "Consumer Direct Offense" has shifted distribution channels, but has it improved product innovation, brand positioning, or customer experience? The jury's still out. --Leadership Change: The departure of design and marketing veterans, coupled with the arrival of a tech-focused CEO, raises questions about Nike's future direction. --Competition Heats Up: While Nike remains a leader, brands like Lululemon and On are innovating and gaining market share. Beyond the numbers, here are some key takeaways: --Balancing Product & Operations: Nike needs to invest in both cutting-edge product development and efficient operations to stay ahead. --Redefining Brand Image: Can Nike evolve beyond its "sneaker brand" image and capture the growing athleisure and lifestyle market? Learning from Others: Inditex's focus on operations and brand image offers valuable lessons for Nike Nike, the iconic sportswear brand, is facing some challenges. While sales are growing, profitability is declining, and innovation seems stagnant. This analysis dives into the reasons behind these trends, considering factors like leadership changes, marketing strategy, and competition. Key points: --Leadership: The shift from a design-focused CEO to a tech-focused one might have impacted product innovation and brand identity. --Marketing: Nike's marketing might not be resonating with younger audiences as effectively as before. --Competition: Emerging brands are offering innovative products and strong customer experiences, challenging Nike's dominance. Question ??? What do you think Nike needs to do to regain its momentum? Share your thoughts in the comments . : #Nike #Sportswear #Retail #Innovation #Marketing #Competition #leadership #Fashion #cmoinsights #innovation #competition #linkedinnews #Brand #strategy