Change of strategy
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.
People didn’t go to the workplace to work, so there was no need to buy formal and elegant shoes. Sales of comfortable shoes rose and Nike’s earnings beat 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 digitally savvy and probably wouldn’t go back,” Donahoe said on a 2020 earnings call.
Nike believed it was more productive to convey its vision directly to consumers and didn’t 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.
“They underestimated the cultural facet of physical food shopping in the social lives of young consumers,” said Daniel Herval, who worked at Nike between 2017 and 2020 on some of its biggest sneakers, including Air Max, Jordan and Air. Force 1, said the Money blog.
“Nike thought 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 side of shopping, came back and Nike wasn’t there anymore. “
Nike had to sell during the time other people were returning to stores, but they had lost speed with other brands.
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 coming up with new ideas, especially 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, 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 is Nike’s innovation in this period?
The soles of air-cushioned sneakers, known as the Air Max bubble, debuted in 1978.
The flyknit material, launched in 2012, Herval says, is the latest basic functionality innovation that has managed to infiltrate the lifestyle logo in an advertising way.
A survey of American teenagers conducted this year through Piper Sandler showed the concept that while Nike remains the favorite, it is losing the “mind” on cutting-edge brands like Hoka and On.
It turns out that Nike identified the challenge when it announced 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 over 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 the old 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 willing to be told by consumers why fewer people will buy Nike sneakers in 2024?You see the photo.
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 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 release for teachers 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 one member of The Basement. “People are older and smarter. “
“I worked in a shoe store for 4 years,” said another. “The biggest killer at Nike has been price increases.
“When I collect a Jordan they charge me £105, in 10 years the same style charges £190 – that can’t be justified!”
The testimonies keep coming. Like those who raise the biggest complaint of customers of the moment about Nike shoes: 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 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 maximum videos don’t show how excited they are about purchasing their new sneakers.
“Why do I spend £200 on a pair of Nike shoes that will probably arrive covered in glue stains and fall apart 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 popsicles,” says another.
Recovering Paris
But it’s not all doom and gloom for Nike. This summer, it has a marketing ace up its 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 imperative that things went well in Paris.
The sportswear giant announced before 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 consumer, product and brand, told Reuters in April.
Nike secured the status of official sponsor of the American team, which meant that 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’s not just at festivals that the Nike brand discovers its moment. Each U. S. athlete won a special package containing 50 garments, shoes, and accessories, adding “interview wear” and “peoplewear” to ensure the logo remains visual. imaginable times in Paris.
This is important, because Paris 2024 broke audience records worldwide. In the United Kingdom, BBC Sport’s adjustment policy was streamed 218 million times, more than twice as many as that recorded in Tokyo.
On the other side of the Atlantic, NBCUniversal’s multiplatform policy generated record advertising revenues and attracted an average of 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 logo that suffers overall,” said Drew Haines, sales leader at the StockX store.
“But the Olympics definitely spark 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 value has slowly recovered, gaining about 14% in the past 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 recovery. ”
Nike did not respond to a request to participate in this article.
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 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 in July exceeded expectations, and the consequences for the public and the fiscal burden on the October budget now look “ominous,” 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 warnings about the budget, Conway’s resources recommend that there is still some other way to go for the chancellor, one that would involve reconverting the way public finances are measured and judged. You can read about it here. . .
This week we learned about the schedule of the new European visa rules.
British citizens will have to pay a €7 visa waiver to Europe from next year. Additional payments, such as the U. S. 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 traveling 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 stick to the arrival of the EU Entry/Exit System (EES). The government will require other people to register their fingerprints and have their photographs taken. Arrival at the airports.
Addressing the launch, EU Home Affairs Commissioner Ylva Johansson said 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, 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 have created the ultimate typhoon for fluctuating household bills,” said Dr Craig Lowrey, senior representative at Cornwall Insight.
He argued that the value limit formula may need to be revised, as it does not influence 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 football top costs as the new Premier League season gets underway. . .
To learn more about this story, watch this explanation made through our virtual video team. . .
Three other readings from Money Value Checking 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. . .
Shocked, the fake elegance of the “village” of Walthamstow resists Gail’s expensive offers. They already seem very satisfied to pay without complaining for the market prices in their existing Spar store. Sausage package with trendy ingredients about 6 pounds. !
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
Some of us wondered why we were covering this story. . .
Who or what is Gail?
Alangillie
When did Walthamstow become a “wooded suburb”?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 oppose it? I don’t see how this is news at all.
City boy
Sometimes our posts raise questions more than comments, like the one following our article on customer rights under Article 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 contacted us after our Saturday about how couples divide their finances. . .
Readers have shared how they and their loved ones 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 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?
abby
My spouse and I are talking about buying assets together. Our rule will be 50% of the loan for each of us, regardless of income, because we either own 50% of the assets. For other invoices, we will only be based 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 son, all the cash goes into a joint account, for a small allowance for each of us. Financial equality is so vital to a successful 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.
Comfortable 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 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 initially split approximately 60/40, so I would pay 60% of the total and my wife 40% (plus 10 %). Any money left in our individual accounts is ours.
58mprl
The post that caused the most consternation this week about the increase in fines for parents who took 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 costs of vacations. It is disheartening to see that families AND teachers cannot take vacations. I also realize how difficult it is for a child to catch up on work.
Mikki
Strongly 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 may not interfere with a child’s prospects!
TermTimeTrip
Starbucks’ new chief executive, Brian Niccol, is under fire over the company’s offer to fly him 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 rise in the energy price cap has sparked fresh calls for a U-turn on winter fuel bills.
The government plans to make the payment to pensioners means-tested, 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, said it suspended orders from suppliers who hired young people under 16.
Both cases were “quickly resolved”, he said, with corrective measures, adding the termination of the contracts of underage employees, the organisation of medical check-ups and the facilitation of repatriation to guardians if necessary.
“We remain vigilant for these types of violations in the future and, consistent 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 child labor were discovered, so that any serious breaches, known as “immediate termination violations,” would result in immediate termination of the relationship.
Previously, providers, especially those hiring minors, had 30 days to issue, or Shein 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.
Vouchers are only valid for two years from the date they are issued, so it’s worth making sure you don’t have any stashed away in your account.
To check online, go to the Tesco Clubcard online page and ‘Clubcard Account’, 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 is a hesitant start to the day in the money markets, with a decided concentration 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.
Jay Powell should, however, temper 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 at $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 are leading the price rise.
Brent crude oil stands at $77 per barrel.
Energy price caps limit the applications that companies can charge their customers for a constant daily rate and for kilowatt hours of fuel and electricity they use.
Regulator Ofgem publishes the cap every quarter and estimates how much the average family would pay over 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 costs have fluctuated significantly with each quarterly release over the past four years, using an annual figure is also an imperfect basis for medium-term household budgeting.
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, which is paid by direct debit or by prepaid meter.
This does not apply to the small number of people who still get constant rate benefits.
Another fourth, the fluctuation in energy costs to manage – replace your family budget.
But there are ongoing deals that are cheaper than the new price cap, according to Uswitch.
The average family can save £125 off October’s peak value at the cheapest 12-month constant rate, said Richard Neudegg, chief regulatory officer at Uswitch.
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.
“Customers looking forward to winter might wonder if the current price cap formula is the best way to put real pressure on suppliers’ prices,” Neudegg said.
“It’s important for families looking for security to shop around to see what’s on offer and tailor pricing based on how much energy they’re likely to use. “
Here are the top 10 constant energy price lists that can counter emerging prices, according to Uswitch:
Pensioners are being advised to ask if they are eligible for the winter fuel subsidy after new chancellor Rachel Reeves scrapped universal bills last month.
Previously, the money was available to anyone over the legal retirement age, but now it will be limited to those over the legal retirement age who receive pension credits or other means-tested aid.
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 of 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 likely deter other people from applying, such as the fact that having savings, a pension or owning a home is not necessarily a barrier to obtaining pension credit.
You can learn more about how to claim the Pension Credit on the government’s How to Apply page.