Strategy change
John Donahoe became Nike’s new CEO in January 2020 and is tasked with upgrading the company’s online operations and generating more virtual revenue.
Donahoe arrived from one of the world’s largest e-commerce companies, eBay, and temporarily began reorienting Nike toward its virtual and unconventional sales efforts.
Soon after, the COVID pandemic hit and shoppers around the world were forced to shop online whether they liked it or not.
People did not go to the workplace to work, so there was no need to buy formal and elegant shoes. Sales of comfortable shoes increased and Nike’s profits exceeded expectations.
Everything was going well, so Donahoe doubled down, accelerated the virtual strategy and kicked Nike out of a bunch of brick-and-mortar stores.
Soon Nike broke off a third of its relations with its partners.
“Today’s customer is rooted in virtual and probably wouldn’t go back,” Donahoe said on a 2020 earnings conference call.
Nike believed it was more productive to convey its vision directly to consumers and did not want stores like FootLocker and JD Sports to dilute it as middlemen.
But as lockdowns around the world ended, other people returned to outlets and online sales slowed, and the decisions that had been made began to be questioned.
“I think they underestimated the cultural facet of physical food shopping in the social lives of younger consumers,” said Daniel Herval, who worked at Nike between 2017 and 2020 on some of its biggest sneakers, adding Air Max, Jordan and Air. Force. 1, said the Money blog.
“Nike believed that other people had moved to the internet and left physical fun behind.
“But as soon as things started to reopen, the social facet of shopping, the networking facet of shopping, came back and Nike was no longer there. “
Competition and innovation
Nike’s rivals weren’t going to sit still while this happened, and of course, stores that once had Nike shoes at the forefront of their shelves were looking for other brands to fill the space.
Newer brands such as Asics, Deckers Outdoor’s HOKA and Roger Federer-backed On have emerged and have acquired an ever-increasing market share.
And those corporations temporarily began introducing new ideas, specifically in a segment of the market that Nike has long dominated: functional running.
HOKA’s thick foam soles are very attractive to runners, while On’s well-marketed (and now patented) generation of cushioning formulas has become popular with casual and professional runners.
Nike, some say, is also lagging in the athleisure lifestyle scene. Adidas’ Samba and Gazelle lines, as well as New Balance’s 990, gained popularity; even the Prime Minister of the time, Rishi Sunak, owned a pair of Sambas. . .
So where has Nike’s innovation been this time?
The soles of air-cushioned sneakers, known as the Air Max bubble, debuted in 1978.
The last big innovation in Nike shoes, according to Herval, was the arrival of its new and iconic Flyknit curtain in 2012.
A survey of American teenagers this year by Piper Sandler showed the concept that Nike is still the favorite, but is wasting “mental share” on cutting-edge brands like Hoka and On.
Nike appears to have identified the challenge by announcing a “multi-year innovation cycle” in April.
Two judicial processes from the street
To find out what consumers think about Nike shoes in 2024, there are few places more important than The Basement.
Launched on Facebook more than a decade ago, the streetwear fanatics organization has just over 150,000 members worldwide and is a leading authority on streetwear, including sneakers.
Need to check if that hoodie you just bought on eBay is vintage Ralph Lauren? Ask in the basement. Do you want to start your own line of traditional sunglasses but want recommendations for starting a small fashion business? Ask in the basement.
Are you looking for consumers to find out why fewer people will buy Nike shoes in 2024?You get the idea.
When we asked members of The Basement what they thought of Nike, two issues arose in almost every single response.
The first of these is the price, which is now largely unaffordable for the exact demographic that traditionally bought Nike shoes en masse.
Take a look at Nike and you’ll be hard-pressed to find a new edition of sneakers that costs less than £120. Most “highly anticipated” shoes cost between £150 and £200.
For older products, such as the Air Max 95, a new pair starts at £174. 99. Some historically less expensive options, such as the Air Jordan 1, now cost around £130 in stores such as JD Sports, Size?and ASOS.
“£200 is not a price,” said one member of The Basement. “People have gotten older and smarter. “
“I worked for 4 years in a shoe store,” said another. “The leading cause of death at Nike has been rising prices.
“When I first collected Jordans they charged me £105, in 10 years the same style will charge £190. That can’t be justified!”
The testimonies stick together. Like those who raise the biggest complaint of the moment that consumers have about Nike sneakers: quality control.
Anecdotal reports of neglected products are hard to come by, and many buyers are frustrated that after spending a lot of money on new shoes, they got bargain-basement shoes covered in glue stains, with mismatched logos, no patterns, deformed heels, and more. complaints.
Quality is a practical procedure that applies to both manual and automated procedures and, as such, is not foolproof.
But the sheer number of bug reports indicates that these are just a few faulty air forces.
There are tens of millions of clicks on TikTok for the term “Nike Quality Control” and (spoiler alert) the peak videos don’t show how excited they are about buying their new sneakers.
“Why do I spend £200 on a pair of Nike shoes that are likely to arrive covered in glue stains and break after a month, when I can get the best pair of New Balance for £150?”asks a member of The Basement.
“Quality has plummeted. Anyone who has ever worked in a Nike store knows that glue smells like lollipops,” says another.
Paris recovering
But it’s not all doom and gloom for Nike. This summer, he has a golden marketing ace up his sleeve: Paris 2024.
The world’s biggest brands see the Olympics as an opportunity to get in front of a global audience, and Nike is no different. Good advertising and branding can motivate visitor trust and inventory value; It was essential that things went well in Paris.
The sportswear giant announced ahead of the Games that it would spend more than in any previous edition.
“This will be the investment and the moment for Nike in years,” Heidi O’Neill, Nike’s president of consumers, products and brands, told Reuters in April.
Nike secured prestige as the official sponsor of Team USA, and as long as the athletes behaved as expected, the swoosh would be at the top of the podium.
And so it was. Simone Biles won 3 gold medals in gymnastics, Noah Lyles claimed glory in the 100 meters and swimmer Katie Ledecky stood on the podium 4 times.
Nike lifetime endorser LeBron James donned a pair of trendy metallic gold shoes from his own heritage LeBron 22 line to win a gold medal.
And it is not only at festivals where the Nike brand discovers its moment. Each American athlete won a special pack containing 50 pieces of clothing, shoes and accessories, adding “interview clothes” and “town clothes” to ensure the logo remains visual. imaginable times in Paris.
This is important, because Paris 2024 broke world audience records. In the United Kingdom, BBC Sport’s match policy was broadcast 218 million times, more than double the figure recorded in Tokyo.
Across the Atlantic, NBCUniversal’s multiplatform policy generated record advertising profits and averaged 30. 6 million viewers.
What does all this mean for Nike? In the first week of the Olympics, from July 26 to August 1, it managed to increase visits to its websites, while its direct rival Adidas saw its visits drop from last week.
It is essential to note that Similarweb’s knowledge also showed that Nike was able to convert many visits to its online page into sales, and did so more than its competitors.
“(Nike) is still a struggling logo overall,” said Drew Haines, director of sales at the StockX store.
“But the Olympics definitely generate interest in those things. Nike is the one that wins. “
Where now?
The marketing push from the Olympics may not end all of Nike’s real and perceived disruptions in one fell swoop, but it’s obviously a step in the right direction.
Even now, the stock’s value has slowly recovered, gaining around 14% in the last month following the recent investment by billionaire American hedge fund manager Bill Ackman.
“Nike’s ability to go beyond just talking about products, the ability to connect with consumers, is second to none,” Herval says.
“It will take a few years. But I am sincerely and firmly convinced that the logo is still capable of recovering. “
Nike did not respond to a request for comment.
By Jimmy Rice, Money Blog Editor
Many other people scratch their chins and wonder if the new government is exaggerating the economic disaster left by the previous regime.
The accusation, coming from the right, is that a discourse is being constructed to justify tax increases motivated by necessity but also by ideology.
The knowledge that has been coming in over the weeks since Rachel Reeves came to number 11 (GDP growth, low inflation) has not helped the Labor Party’s story.
But this week, in the words of knowledge and economics editor Ed Conway, “we had the most recent fiscal figures and here the picture is significantly closer to Reeves’ editing than to those other insights. “
Government borrowing for July exceeded expectations, and the consequences for public services and fiscal pressure in the October budget now look “bleak”, Conway wrote.
He talked about all of this in an episode of the Daily podcast, which you can pay attention to here or anywhere you like podcasts. . .
Despite the budget warnings, Conway’s resources recommend that there is still some other way forward for the chancellor, one that would involve rethinking the way public finances are measured and judged. You can read about it here. . .
This week we learned about the timetable for the new European visa rules.
UK citizens will have to pay a €7 visa waiver fee to Europe from next year. The additional payments, similar to the US ESTA, are part of a series of new border controls and access requirements that the EU is introducing.
They will be applied to access the Schengen area, which includes EU member states such as Iceland, Liechtenstein, Norway and Switzerland.
People under 18 years of age or over 70 years of age will be exempt from this tax, as will those travelling to Ireland or Cyprus.
The waiver will last for 3 years or until your passport expires.
Its official name is the European Travel Information and Authorization System (ETIAS), and its implementation will remain in place until the arrival of the EU Entry/Exit System (EES). The latter will require other people to register their fingerprints and have their photographs taken upon arrival at airports.
Addressing the launch, EU Home Affairs Commissioner Ylva Johansson said that the EEA would come into force on November 10, while ETIAS would remain in place some time later, in 2025, probably in May.
However, it is believed that there could be a six-month grace period before visas become mandatory, which would be extended until November next year.
On Friday morning, it showed that the energy price cap would increase in October and that another increase was expected in January.
“Unfortunately, a volatile wholesale market and a country heavily reliant on imported energy created the ultimate typhoon for fluctuating household bills,” said Dr Craig Lowrey, senior representative at Cornwall Insight.
He argued that there might be reason to revisit the value cap formula, given that it does not depend on global power trends.
The annual bill will now be £1,717 from the autumn, with £45 expected to be added in the new year.
Here at Money we take a look at the costs of football blouses as the new Premier League season begins. . .
To learn more about this story, watch this explanation made through our virtual video team. . .
Three other Money reads worth checking out are. . .
We’ll be logging out of the usual updates until the end of the holiday week, but check out our weekend reading starting at 8 a. m. m. of Saturday. This week, we take a look at the Nike sneaker bubble that has burst.
Many of the stories we’ve covered in Money over the past week have sparked an avalanche of comment. We’ll start with the updates we’ve made to Gail. . .
Some readers agreed with the reaction, but others didn’t see what it was about. . .
Surprised, the supposed “village” elegance of Walthamstow would oppose Gail’s beloved offerings. They already seem very happy to pay market costs on their existing complaint about the Spar store. Package of sausages with trendy ingredients of almost 6 kilos. I ask you!
Keith
Most selling options would be satisfied with having Gail open. Their food and bread are excellent, as is their café, they have a very décor and bring a touch of elegance to any important street.
Petal
We’ve also had some why we were covering this story. . .
Who or what is Gail?
Alangillie
When did Walthamstow become a “leaf suburb”? Did you think this was East17’s house? And why is this national news? Stores open and close all the time in all parts of the country. Do any of your editors live there and object? I don’t see how this is news at all.
city boy
Sometimes, our posts generate questions rather than comments, such as the one following our article on customer rights under Article 75. . .
I will buy a car for £7,000 from a dealership. Have I gained customer cover through car loans if I pay part in money and part through car loans?
Clive Blackpool
The answer is yes, you would be, even if you only paid a penny by credit card. Everything you want to know is here. . .
Many of you contacted us after our Sabbath about how couples divide their finances. . .
Readers shared how they and their shared things. . .
We split all expenses more or less equally. He earns much more than I do and helps me keep his money and savings after 50 years of living together. I probably have no idea how much you save and probably don’t percentage anything. Yes, you read that right!
CP
100% of all cash goes into a single account for bills, disposable income, etc. We manage everything in one spreadsheet! I’ve never had a war of words after thirteen years and we only have 30!I can never believe we’re going to dinner. And someone who says “I’m going to get this,” how do other people do it?
Abbie
My spouse and I are talking about buying property. Our rule will be 50% of the loan for each of us, regardless of their income, since either of us owns 50%. For other invoices, we will rely solely on revenue.
Adam
I earn a lot more than my partner, so once our relationship matured enough, I put the difference into shared savings. Since I have a child, all the cash goes into a joint account, for a small allowance for each. Financial equality is so vital to a satisfactory date.
Linda
It’s simple. I don’t know what my wife earns, she doesn’t know what I earn, we have separate [accounts]. We buy what we want and want, when we pass out she pays once, I pay later, we don’t even look at the bill. This way you won’t have any problems.
Comfortable Powell
My spouse earns around £60,000 more than me a year and we split our expenses in half. However, he buys all the food for us and the pets and will pay when we pass out. He couldn’t ask for more, I’m doing very well with the existing agreement.
LHam
All expenses were paid from a joint bank account to which we paid from our private accounts, the salary was split at the beginning approximately 60/40, so I would pay 60% of the total and my spouse 40% (plus 10%). , any money. what was left in our individual accounts is ours.
58MPRL
The post that caused the utmost consternation this week about the increase in fines for parents who pulled their children out of school. . .
You said. . .
Why is the government not interested in travel agencies?My spouse and I work in a school. We don’t have children in school, but we have to pay exorbitant costs for our absence because we have to spend the school holidays.
tony
If I have to take my kids out of school for the holidays, let’s face it, parents can save a lot of money once the holidays are over. I’m a single mom with two kids and I work two jobs.
Andy Henderson
As a teacher, I sense the frustration that many parents feel about the exorbitant prices of vacations. It’s disheartening to see that families AND coaching staff can’t get through the holidays. I also sense how difficult it is for a child to catch up on work.
Mikki
Totally disagree with the penalty of temporary leave. There are countries where parents can authorize up to five days off depending on the year. A long weekend here and there, or a week-long once a year, probably wouldn’t hurt a child’s outlook!
TermTimeTrip
Starbucks’ new chief executive, Brian Niccol, is angry about the company’s proposal to travel about 1,000 miles on a personal jet.
Social media users criticized the move by the world’s largest coffee chain, in light of its sustainability efforts elsewhere, such as banning plastic straws.
Mr. Niccol’s job title indicated that he would not have to move to the company’s headquarters in Seattle, Washington, from his family home in Newport Beach, California, when he assumes his new position on September 9.
Read here. . .
Storm Lilian is disrupting travelers and festival-goers as the banking weekend approaches.
Two of the Leeds Festival are closed during the day: BBC Radio 1 Stage and Aux Stage.
British Airways canceled 14 flights from Heathrow and others delayed, while two flights from Leeds Bradford Airport were canceled and 3 early morning arrivals were diverted to Liverpool.
The increase in the energy price cap has prompted new calls for a change in fuel bills for the winter.
The government plans to make the payment to pensioners means-tested, making it available only to those who obtain pension credit.
But Caroline Abrahams, director of the charity Age UK, called it “reckless and wrong” and “would be a crisis for pensioners on low and modest incomes” following the latest bad news on housing costs. ‘energy.
Shein discovered two cases of child labor in its supply chain last year, the fast fashion retailer said.
The company’s 2023 sustainability report, released yesterday, said it suspended orders from suppliers who hired young people under 16.
Both cases were “resolved quickly”, he said, with corrective measures, including the termination of contracts of minor employees, the organization of medical checks and the facilitation of repatriation to guardians if necessary.
“We continue to watch for these types of violations in the future and, in accordance with existing policies, will terminate any supplier that does not comply,” Shein said in the report.
Shein has stepped up audits of brands in China to appease complaints about its cheap style ahead of a planned IPO.
The company tightened its policy last October after cases of the children’s hard work came to light, so any serious breach, called an “immediate termination violation,” would result in the early end of the relationship with theArray.
Previously, suppliers, especially those hiring minors, had 30 days to issue, or Shein would cut ties.
It’s time to check if you have any Tesco Clubcard vouchers about to expire, as £14 million will be sold out on Saturday.
Coupons are only valid for two years from the date they were issued, so it’s worth making sure you haven’t hidden any in your account.
To check online, go to the Tesco Clubcard online page, ‘Clubcard Account’ and then ‘Coupons’.
You will then be able to see a table with the directory of your available vouchers and their expiration dates.
If you are the Tesco app, open it, go to ‘Clubcard’ and then to the ‘Coupons’ section.
What to do with your vouchers?
You can spend your hard-earned vouchers online or in person.
You can also double your vouchers by spending them at Tesco’s laudatory partners, such as Disney, RAC, and Zizzi.
By James Sillars, Economic Journalist
It’s a shaky start to the day in money markets, with firmness in the United States. Jackson Hole in Wyoming, to be exact.
This is where the head of the US central bank will deliver a highly anticipated speech in which he is expected to sign that the first interest cut through the Federal Reserve will occur next month.
However, Jay Powell is expected to calm market expectations for several rate cuts between now and the end of the year.
This may simply hamper the pound’s recent advance against the US currency, which is lately trading at a one-year high against the dollar of $1. 31.
It could also hurt a rate-sensitive stock market, which is desperate to borrow.
The FTSE hundred is therefore trading 0. 2% higher in early trade at 8,304.
Mining corporations and energy companies lead emerging prices.
Brent crude oil stands at $77 per barrel.
The energy price cap limits the applications that businesses can qualify their customers for a consistent daily rate and per kilowatt-hours of fuel and electric power they use.
Regulator Ofgem publishes the limit each quarter and estimates how much the average family would pay over a year at the new unit price.
This figure of £1,717 means that a family of 2. 4 more people living there consumes 2,700 kWh of electricity and 11,500 kWh of gas.
The actual annual charge per visitor will be different depending on the amount of energy you use. If you use more fuel and electricity than you buy for £1,717, you’ll pay more.
As costs have fluctuated significantly with each quarterly release over the past four years, the use of an annual figure is also an imperfect basis for medium-term budgeting for households.
Here’s what’s limited:
The Ofgem value limit only applies to other people living in England, Scotland and Wales with variable or default rates.
This is the case of the maximum number of households, which is paid by direct debit or prepaid meter.
This does not apply to the small number of people who still get constant rate benefits.
Another quarter is the fluctuating energy costs you have to deal with – replace it based on your family budget.
But deals can always be struck that are cheaper than the new value cap, according to Uswitch.
The average family can save £125 up to the October price cap on the cheapest 12-month rolling tariff, said Richard Neudegg, head of regulation at Uswitch.
At £1,592 a year, it would also avoid another small increase expected in January, he said.
It’s worth noting that Uswitch has an interest in other people moving, and a flat fee may end up costing you more if the maximum value falls below that constant fee in April and June next year.
“Customers waiting for winter might wonder whether the current price cap formula is the best way to put real pressure on suppliers’ prices,” Neudegg said.
“It is vital that families looking for certainty do a comparison to see what can be offered to them and see customized costs based on the amount of energy they are most likely to consume. ”
Here are the top 10 constant energy price lists that can counter emerging prices, according to Uswitch:
Pensioners are being asked if they are eligible for the winter fuel subsidy after new Chancellor Rachel Reeves scrapped universal bills last month.
The cash was previously available to anyone over state pension age, but will now be limited to those over state pension age and receiving pension or other means-tested credits.
This means that the number of people eligible for this money will be reduced from 11. 4 million to just 1. 5 million.
The payment is £200 for families where the beneficiaries are aged 80 and £300 where they are over 80.
While around 1. 4 million pensioners already benefit from the pension credit, it is estimated that up to 880,000 families eligible for it have not yet implemented it, according to the Department for Work and Pensions.
The government’s awareness campaign will identify families claiming this subsidy and inspire retirees to apply by the Dec. 21 deadline for submitting a retroactive application for pension credits to get winter fuel payment.
It will rely on “myths” that may prevent other people from applying, such as that having savings, a pension or owning a home are not necessarily barriers to obtaining pension credit.
You can learn more about how to claim pension credits on the How to Apply for Government page.