Strategy change
John Donahoe became Nike’s new CEO in January 2020 and is tasked with updating 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.
Since people didn’t go to the office to work, there was no need to buy fancy, formal shoes. Nike’s sales of comfortable shoes and profits exceeded estimates.
Everything seemed to be going well, so Donahoe doubled down, accelerating the virtual and Nike strategy from a slew 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 grocery 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 had this idea that other people had gone online and abandoned the physical experience.
“But as soon as things started to reopen, the social side of shopping, the network shopping facet, came back and Nike was no longer there. “
Competition and innovation
Nike’s rivals weren’t going to stand still while this was happening, 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 taken increasing market share.
And those corporations temporarily began coming up with new ideas, especially in a market segment that Nike has long dominated: functional running.
HOKA’s thick foam soles are very appealing to runners, while On’s well-marketed (and now patented) generation of cushioning formulas have become popular among casual and professional runners.
Nike, according to some, is also lagging behind in the sports lifestyle scene. Adidas’ Samba and Gazelle lines, as well as New Balance’s 990, gained popularity; already the then Prime Minister Rishi Sunak owned a couple of Sambas. . .
So where has Nike’s innovation been this time around?
The air cushion in the soles of shoes, known as the Air Max bubble, debuted in 1978.
The most recent major innovation in Nike sneakers, according to Herval, is the arrival of its iconic new Flyknit upper in 2012.
A survey of American teens this year by Piper Sandler showed the concept that Nike is still the favorite, but is wasting “mental engagement” 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 fan organization has just over 150,000 members worldwide and is a leading authority on streetwear, including sneakers.
Need to check if the hoodie you just bought on eBay is an old Ralph Lauren?Do you want to start your own line of custom-made sunglasses but want to be recommended on how to start a small fashion business?Ask in the basement.
Are you looking for consumers to learn why fewer people will buy Nike shoes in 2024? You get the idea.
When we asked the members of The Basement what they thought of Nike, two issues arose in almost each and every response.
The first of these is the price, which is now largely unaffordable for the exact demographic that has traditionally bought Nike shoes en masse.
Take a look at Nike and you’ll be hard pressed to find a new teacher release that costs less than £120. Most of the “highly anticipated” shoes are priced 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 an affordable price,” said a member of The Basement. “People are 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 a pair of Jordans, I was charged £105; In 10 years’ time, the same style will charge £190. That cannot be justified!”
The testimonies stick together. Like those who raise the biggest complaint of the moment that consumers have about Nike sneakers: quality control.
It’s hard to find anecdotal reports of failed products, and many shoppers are frustrated that, after spending a lot of money on new shoes, they won shoes covered in glue stains, mismatched logos, no designs, distorted heels, and much more. Complaints.
Quality is a practical procedure that applies to both manual and automated procedures and, as such, is not foolproof.
But the huge number of error reports indicates that it is 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 running shoes that are likely to arrive covered in glue stains and break after a month, when I can get the best pair of New Balances for £150?” asks a member of The Basement.
“Quality has plummeted. Anyone who has ever worked in a Nike store knows very well that glue smells like a lollipop,” says another.
Paris recovering
But not everything is bleak for Nike. This summer, there’s a golden marketing asset up your sleeve: Paris 2024.
The world’s biggest brands see the Olympics as an opportunity to present themselves in front of a global audience, and Nike is no different. Good advertising and branding can motivate consumer trust and percentage value: it was imperative 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 an official sponsor of Team USA. 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 won glory in the 100 meters and swimmer Katie Ledecky stood on the podium 4 times.
LeBron James, Nike’s longtime sponsor, donned gold-style metallic shoes from his own traditional LeBron 22 line with the goal of winning a gold medal.
And it is not only at festivals where the Nike brand discovers its moment. Each American athlete won a special package containing 50 items of clothing, shoes and accessories, adding “interview wear” and “town wear” to keep the logo visual for each and every moment imaginable in Paris.
This is important, because Paris 2024 broke global audience records. In the UK, BBC Sport’s Match Politics 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 Olympic Games, from July 26 to August 1, it managed to increase visits to its websites, while its direct rival Adidas saw its visits decrease from last week.
Importantly, Similarweb’s insight also showed that Nike was able to convert many visits to its online page into sales. And he did it more than his 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 boost provided by 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 about 14% 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 sincerely and firmly believe that the logo is still capable of recovering. “
Nike did not respond to a request to participate in this article.
By Jimmy Rice, Editor-in-Chief of the Money blog
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 in at No. 11 (GDP growth, low inflation) has not helped the history of the Labour Party.
But this week, in the words of knowledge and economics editor Ed Conway, “we had the latest tax figures and the picture here is significantly closer to Reeves’ edition than to those other insights. “
Government borrowing for July exceeded expectations, and the consequences for utilities and the fiscal burden on the October budget now look “bleak,” Conway wrote.
He talked about all this in an episode of the Daily podcast, which you can follow here or anywhere you like podcasts. . .
Despite warnings about the Budget, Conway’s resources recommend that the chancellor is still pursuing some other path, one that would involve changing the way public finances are measured and judged. You can read about it here. . .
This week we learned about the timing of the new EU visa rules.
British citizens will have to pay a €7 visa waiver to Europe from next year. Additional payments, such as 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 exemption 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 follow the arrival of the EU Entry/Exit System (EES). The government will require other people to register their fingerprints and take photographs. Arrival at the 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 thought there could be a six-month grace period before visas become mandatory, until November next year.
On Friday morning, it was confirmed that the energy price cap would rise in October, with another hike 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 is not derived from 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 produced through our virtual video team. . .
Three more essential reads from Money that are worth checking out are…
We will be disconnecting from normal updates until the end of the holiday weekend; However, check out our weekend reading starting at 8 a. m. m. of Saturday. This week we take a look at how the Nike sneaker bubble has burst.
Many of the stories we’ve covered in Money over the past week have sparked an avalanche of comments. 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, Walthamstow’s pretended “village” elegance would oppose Gail’s beloved offerings. They already seem very pleased to pay the market costs in their existing complaint about the Spar store. Package of sausages with trendy ingredients weighing almost 6 kilos. I ask you to!
Keith
Most puts would be satisfied with having Gail open. Their food and bread are excellent, as is their coffee, they have very cool decoration and add a touch of elegance to any high street.
Petal
We’ve also had some why we were covering this story. . .
Who or what is Gail?
Alangillie
When did Walthamstow become a ‘green suburb’? Did you imagine this was East17’s house? And why is it national news? Stores open and close all the time in all parts of the country. Do any of your editors live there and object to it? I don’t see this being news at all.
City boy
Sometimes, our posts raise more questions than comments, such as the one following our article on customer rights in segment 75. . .
I will buy a car for £7,000 from a dealership. Did I get car credit customer cover if I pay part money and part car credit?
Clive Blackpool
The answer is yes, it would be, even if you only pay a penny with a credit card. Everything you want to know is here. . .
Many of you have contacted us after our Sabbath about how couples divide their finances. . .
Readers have shared how they and their have shared things. . .
We split all expenses more or less equally. He earns much more than me and helps preserve his money and his savings after 50 years of living together. I probably have no idea how much he has stored and probably not a percentage of anything. Yes, you read correctly!
CP
100% of all cash is going into one account for bills, disposable income, etc. – we manage everything in one spreadsheet! Never had a war of words after thirteen years and we are only 30! I can never believe going to dinner and someone saying “I’ll get that” – how do other folks do it?
abby
My spouse and I are talking about purchasing a property. Our rule will be 50% of the loan for each, regardless of income, since either of us own 50%. For other bills, we will rely solely on income.
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 spouse earns, she doesn’t know what I earn, we have separate [accounts]. We buy what we want and want, when we faint she pays once, I pay later, we don’t even look at the bill. This way you won’t have any problems.
Commodus Powell
My spouse makes around £60,000 more than I do 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. I could not ask for more, I am going 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 initially split approximately 60/40, so I would pay 60% of the total and my wife 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 wife and I work at a school. We do not 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 am a single mother with two children and I have two jobs.
Andy Henderson
As a teacher, I sense the frustration many parents feel about the exorbitant prices of vacations. It is disheartening to see that families AND the coaching staff cannot spend the holidays. I also realize how difficult it is for a child to catch up on work.
Mikki
Totally disagree with the temporary license penalty. There are countries where parents can consistently grant up to five days of leave per year. A long weekend here and there, or a week-long once a year probably won’t interfere with a child’s outlook!
TermTimeTrip
Starbucks’ new chief executive, Brian Niccol, is angered by the company’s proposal to travel about 1,000 miles in 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 offer 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 begins his new role 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 cancelled 14 flights from Heathrow and others delayed, while two flights from Leeds Bradford Airport were cancelled and 3 early morning arrivals were diverted to Liverpool.
The increase in the energy price cap has prompted new calls for a U-turn in fuel bills for the winter.
The government plans to make the payment to pensioners subject to a means test, so that only those who receive pension credit can receive it.
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 hard work at its supply chain last year, the fast-fashion retailer said.
The company’s 2023 sustainability report, released yesterday, says it suspended orders from suppliers who hired young people under the age of 16.
Both cases were “resolved quickly”, he said, with corrective measures such as terminating the contracts of minor employees, organising medical check-ups and facilitating repatriation to guardians if necessary.
“We remain vigilant for these types of violations in the long term 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 quell complaints about its cheap style ahead of a planned IPO.
The company tightened its policy last October after cases of child labor came to light, so that any serious breach, called an “immediate termination violation,” would result in the early end of the relationship with theArray.
Previously, suppliers, plus those employing minors, were given 30 days to do so or Shein would cut ties.
It’s time to check if you have any Tesco Clubcard vouchers about to expire, as £14m will run out on Saturday.
Coupons are only valid for two years from the date they are 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’re the Tesco app, open it, go to ‘Clubcard’ and then the ‘Vouchers’ 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 complimentary partners such as Disney+, RAC and Zizzi.
By James Sillars, 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 US central bank chairman will deliver a highly anticipated speech in which he is expected to sign broadly that the first interest cut through the Federal Reserve will come next month.
However, Jay Powell is expected to calm market expectations of 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 has lately been trading at a one-year high against the dollar at $1. 31.
It could also hurt a rate-sensitive stock market, which is desperate to borrow.
Therefore, the FTSE hundred is trading 0. 2% higher in early trading at 8,304.
Mining corporations and energy companies are leading the price rise.
Brent crude oil stands at $77 per barrel.
The energy price cap limits the applications that companies can rate their customers for a constant daily rate and for kilowatt-hours of fuel and electric energy they use.
Regulator Ofgem publishes the limit quarterly and estimates how much the average family would pay in a year at the new unit price.
This figure, £1,717, means that a family of 2. 4 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 prices have fluctuated significantly with each quarterly release over the past four years, using an annual figure also provides an imperfect basis for the household budget in the medium term.
This is what is 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, it is paid by direct debit or by prepaid meter.
This does not apply to the small number of people who still gain advantages from constant rates.
Another fourth, fluctuating energy costs to manage – replace your household budget.
But deals that are cheaper than the new value cap can always be achieved, according to Uswitch.
The average family can save £125 up to October’s price cap with the cheapest 12-month consistent tariff, said Richard Neudegg, Uswitch’s chief regulatory officer.
At £1,592 consistent with the year, it would also avoid some other small accumulation 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.
“Consumers looking forward to 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 suggested to ask if they are eligible for the winter fuel allowance 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 entitled to this money will be reduced from 11. 4 million to just 1. 5 million.
The payment is £200 for families where the beneficiaries are 80 years old and £300 when they are over 80 years old.
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 focus on “myths” that would possibly dissuade other people from applying, such as the fact that having savings, a pension, or owning a home is not necessarily a barrier to getting a pension credit.
You can learn more about how to claim pension credits on the How to Apply for Government page.