Prof G podcast discusses the recent decline of Nike with stock down 50%. Adidas, On, and Hoka are thriving by contrast. It's surely a disconnect on the eve of the Olympics and their logo splattered everywhere.
The current senior leadership is comprised of technocrats that have no concept about product, marketing, emotional connections, etc. The joint is run by a former Ebay exec, a former Walmart exec, and a ton of soulless ex-McKinsey and Bain people. They are more motivated by grinding out efficiencies and margins than by creating innovative and exciting products for athletes.
They also fixated on a consumer direct approach to sales. While that makes some sense in the online age, they sh*t on a lot of longtime retail partners and are starting to realize that consumers still like trying things on and the instant gratification of walking out of a store with something new. Last week, they brought back from retirement the guy that cultivated all of the retail partner relationships of the glory days.
A lot of the old guard is retired. Phil is fixated on his legacy, a University of Oregon football national title, and Oregon politics. Layoffs and restructurings have ousted a lot of longtime passionate people that lived for the brand. The CEO has mandated that employees have to be in the office four days a week while he continues to work full-time from his home office in Silicon Valley. I hear from friends still working inside the berm that the place is equal parts "Lord of The Flies" and the douchiest Greek house that ever existed. Once upon a time, you clamored to work at Nike because it was cool. Now, the new generation thinks that they are cool because they pull a paycheck from Nike. Great ideas get shot down because that makes higher ups feel threatened and marginally talented brown nosers get promoted for being obedient little suck ups. This has been going on for years and now Nike is harvesting what they have sown.
Right now, I am happy that I dumped my Nike holdings about two years ago. When John Donahoe took over, I had a gut feeling that things were going to go south. If I hadn't trusted that feeling, I would be looking for work today instead of enjoying retirement.
This makes me think of 'barber pole theory of fashion'. Assume Tracksmith wants to market itself as being 'for serious runners' - for example Alex, who is racing an XC series with his local club and aiming to finally dip under 15 for 5k. And assume somehow that works perfectly, and due to perfect targeting and messaging or whatever, at first only the cool 'Alex' types wear Tracksmith.
Soon, the next tier down - let's say Bob, the slightly overweight, new convert 40 year old guy who talks way too much about running and his fueling strategy for his long runs and what he read in runner's world last week - soon Bob sees Alex wearing Tracksmith, so he does too. But once the Bobs start wearing Tracksmith, Alex doesn't really want to anymore. So now the brand signals 'Bob' instead of 'Alex'.
I think this is sort of what has happened to Tracksmith, and Nike longer ago, but it's also interesting to think about in general.
(And then soon maybe Tracksmith moves down the barber pole to Carla, and Alex is wearing something new that Bob will soon start to imitate... I don't know what yet, since I'm more of a Bob these days.) ((Also obviously it's more complicated than this, this is just one of several things going on, at best.))
Nike makes the best distance spike (Dragonfly), road flat (Vaporfly) and flat/ xc shoe (Waffle). I did switch to the Brooks Launch over the Pegasus a few years ago so I can't speak to their every day trainers currently.
Most of Nike's apparel are about an 8 out of 10 in terms of quality and are generally available in more sizes and color schemes than other brands.
My take away- Nike still leads the way for competitive racing shoes and apparel.
Nike makes the best distance spike (Dragonfly), road flat (Vaporfly) and flat/ xc shoe (Waffle). I did switch to the Brooks Launch over the Pegasus a few years ago so I can't speak to their every day trainers currently.
Most of Nike's apparel are about an 8 out of 10 in terms of quality and are generally available in more sizes and color schemes than other brands.
My take away- Nike still leads the way for competitive racing shoes and apparel.
the stuff being mentioned as quality nike footwear is usually >$200. when nike first released the air stuff it was expensive and exclusive in a similar way. it took off when you could get a good pair of pegasus for a reasonable price, if not air jordans. they are now circled back to the model where the good stuff is priced like jordans. you can get the cheap stuff if you want.
but if i have $100-150 i want to spend on good runners, asics, brooks, saucony. what nike offers at that price is not equivalent.
now if you are a collegian or pro, different story, you might want the top stuff, like i had kings or copas for soccer no matter what the price tag. but what percent of nike profits is mass mall sales vs. joggers vs. college/pro who might even get some of it free.
I've been noticing this for a good while now. If I'm at a road race and looking at what people are wearing it's mostly not anything from Nike. A couple weeks ago I was flying and filled in time by looking at what brands people in the terminals who were wearing running shoes were wearing and again, almost no one was in Nikes. I watched a fair amount of Wimbledon tennis and thought that there weren't nearly as many Nike sponsored players as there used to be but maybe in my mind Nike was more common in the past than it really was.
It doesn't surprise me. I don't know much about marketing but I know that for a long time Nike restricted who they'd sell their running shoes to. The running shop in my town couldn't stock anything from Nike for well over a decade. His operation was too small for them and I know recently they got even more restrictive of what running shops they'd sell to trying for direct sales on the intenet or in Niketowns instead hoping to eliminate middle men. Again, I'm no marketing genius but it's hard to believe that making your product hard to buy is a great strategy especially when you have competitors with comparable products that are much easier to find.
