A foot in both camps
Although it sells billions of dollars worth of clothing and equipment every year, Nike is still predominantly in the shoe game, managing to do what most Marketing 101 courses would tell you is impossible — selling footwear for both fashion and performance.
But, recently, Nike seems to have misstepped, as competition from fitness-focused brands such as Hoka and On have started eating into its running business. In its latest quarter, Nike’s footwear sales dropped a concerning 2% in North America, with price rises obfuscating a 10% decline in sales volume — Swiss brand On, which is backed by Roger Federer, reported a 52% jump in sales in its most recent update.
Sneakerheads have long coveted Air Jordans and Air Force 1s, while models such as the Vaporfly were so successful they sparked an entire genre of “super running shoes” — but recent models haven’t been flying off the shelves in the typical Nike fashion.
Direct feedback
Nike’s strategy over the last decade has been all about going direct, selling straight to customers either online or at one of its ~900 stores around the world. For a brand-obsessed business like Nike, this makes a lot of sense.
Owning the distribution gives control over everything from how your sneakers are displayed, to what kind of discounts (if any) you’re willing to give. It also means you make more profit, because there’s no middleman taking a cut. Nike took this strategy far, even breaking up with department store giants like Macy’s — only to come back to the table over the summer.
