For many years, not only did Nike "Just Do It", as their famous slogan suggested, they 'did it' in style—often outpacing the competition. From 1988 to 1998, Nike increased its share of the North American domestic sport-shoe business from 18% to 43% (from $877 million to a whopping $9.2 billion in worldwide sales).
Throughout the 2000s and 2010s, Nike continued to innovate and stay one step ahead of its competitors with groundbreaking products that often revolutionised the athletic industry, from the introduction of Air cushioning in the Air Max range to the Flyknit technology that provides lightweight and seamless support.
In addition to innovation, much of Nike's success has resulted from its best in class marketing. Over the years, Nike has been responsible for some of the most iconic marketing in the world. The "Just Do It" slogan, launched in 1988, resonated with people on a personal level, making it one of the most successful advertising concepts in history.
Nike has continuously harnessed its commitment to innovation, quality, and customer satisfaction, taking it from a small startup in the 1960s to a global powerhouse in sportswear.
Nike sneakers are known for their uniqueness, which has led to constant changes and the development of a wider range of products. They struck gold in the 80s by pairing with NBA basketball stars such as Michael Jordan—the Air Jordan brand alone has generated billions for Nike over 35 years and has had a ripple impact on sales of other Nike-branded products.
However, Nike appears to have run out of steam in recent times. In June, Nike stocks saw their biggest drop since 2001, wiping out billions in market value as investors grew increasingly concerned that the sportswear giant was losing market share to upstart brands such as On and Hoka and had failed to capitalise on the recent running boom.
Sales have slowed as well, with the company expecting as much as a 10% dip this quarter due to a slowdown in its Chinese market and waning consumer demand around the world.
Has Nike run out of track? Campaign Asia-Pacific turned to five brand and advertising experts to weigh in.
Dency Cheng
Senior engagement manager, Prophet
Senior engagement manager, Prophet
Nike hasn’t been creating any groundbreaking products of late but appears to be pushing more products with similar designs in different colours (e.g., Air Max, Air Jordan). This contrasts with traditional competitors like Adidas and ASICS, who are raising the game with highly innovative collaborations. Adidas launched its highly successful CONFIRMED app, which engages users on its limited-edition sneaker and apparel releases. ASICS is partnering with 3D printing and sensor tech players to develop smart, energy-saving shoes that are comfortable for runners.
From mixed reactions toward Nike’s design of Major League Baseball (MLB’s) new uniforms to controversy around the American women’s track team uniforms for the Paris Olympics Games, Nike seems to be missing the mark on creating inspiring and outstanding products that people love.
Nike needs to rethink its innovation pipeline and playbook to create truly innovative products and build meaningful connections with consumers.
The recent running boom must have shocked Nike. New competitors like HOKA and New Balance have created catchy styles with trendy fashion collaborations that took off with huge success. ON’s revolutionary running shoes, with innovative technology and design, have not only built a cult-like following globally but are also endorsed by up-and-coming athletes who represent the next generation of world-class talent.
Unlike these hot competitors, Nike was lacking in new news. Over the past couple of years, Nike continued to reuse the same playbook in pushing more of the same and focusing resources on only the most marketable athletes. More critically, Nike’s fallback in innovation has resulted in these competitors seizing opportunities quickly to gain market share in niches across the running category.
Nike needs to truly push the boundaries of athletic performance and design. For a brand of such influence and legacy, consumers expect more. Not just more of the same in different colours but groundbreaking product innovation. Not just another marketing campaign but authentic brand experiences that engage customers.
Greg Paull
Principal R3
Nike thought it owned the competitive set. However, customers’ perceptions of the competitive set changed. They left behind its heritage of being the superior, cutting-edge footwear for serious athletes. Nike cut off the development of more affordable footwear, leaving behind Nike lovers with smaller budgets.
They need to return to a more balanced approach with an investment in brand and innovation, balanced against their DTC approach.
Martin Roll
Business and brand strategist, author, Asian Brand Strategy
First, Nike's sales have been hurt by the general state of the global economy, which includes inflation and changing consumer purchasing trends. Demand for expensive trainers and athletic apparel has decreased as customers cut back on discretionary spending.
Second, Nike has more products in stock than is being sold, which has caused the company to face inventory problems. This excess inventory, which frequently results from overproduction, inaccurate forecasts, or declining customer demand, can cause markdowns and lower profitability.
Nike's market position and pricing methods have been under strain due to increased competition from firms like Under Armour, Adidas, and developing brands. It will be more difficult for Nike to outpace previous growth rates in some areas where the market for trainers and athletic gear is getting close to saturation.
Recessions in important economies like China and Europe have also affected Nike's sales. China, a key market for Nike expansion, is dealing with geopolitical and economic challenges that have an impact on consumer spending.
While the running market has seen significant growth, fuelled by increased health and fitness awareness, some competitors like HOKA, On, New Balance, and ASICS have capitalised on this trend more successfully, potentially eating into Nike's market share.
These brands have leveraged the running boom by offering innovative products that appeal to serious runners. HOKA, for instance, is known for its maximalist cushioning, which has gained a loyal following. On has introduced unique design features like the "CloudTec" cushioning system, appealing to both performance runners and lifestyle consumers. New Balance has revitalised its brand with a focus on technical performance and style, while ASICS continues to be a favourite among serious runners due to its consistent focus on performance and reliability.
In contrast, Nike, while still a dominant player in the athletic footwear market, may not have been as agile in responding to the specific demands of the running boom.
Although Nike continues to release new running shoe models and maintains a strong presence in major marathons and running events, the rapid innovation and niche marketing by competitors has made them more prominent in the eyes of dedicated runners.
Additionally, Nike's broad brand strategy, which includes fashion and streetwear, might have affected its perception among core running enthusiasts. While Nike's Pegasus, Zoom, and Vaporfly lines are popular, the brand's association with lifestyle and fashion could detract from its focus on pure performance running in the eyes of some consumers.
Therefore, while Nike has not faded from the scene, its response to the running boom might not have been as swift or focused as that of some of its competitors.
Nike needs to renew its contract with its global consumer base. While competitors have gained ground, Nike's ability to adapt and leverage its strengths suggests it can overcome current hurdles. By investing in direct-to-consumer strategies and maintaining a sharp focus on product quality and customer experience, Nike is well-positioned to sustain long-term growth.
Huiwen Tow
Head of strategy, APAC at Virtue
Sport is experiencing a seismic shift, and Nike, as the brand that defines the category, could be left behind.
Sport is shifting from competition to community, from hyper-performance to simply having some fun. The inclusion of breakdancing, skateboarding, surfing and climbing in the Paris Olympics, the rise of alternative sports in the mainstream like pickleball and padel, and the emergence of pillow fighting as a competitive sport demonstrate this shift. Cycling communities, run clubs, indoor climbing spaces, or even Strava becoming a proxy dating app are clear signals that people are gravitating towards the sport to satisfy their deep desire for communal connection and not simply to beat their personal best.
As a brand that has historically stood for being at the top of your athletic game, the mantra of “just do it” can feel alienating and inaccessible for the new faces of sport and disconnected from the new communities that will define the future of the sport.
On the other hand, Nike is also suffering from the rise of hyper-functionality in culture. Techwear and gorp core’s fashion moment is not fading any time soon. The evolution of The North Face from an outdoor brand for hikers to a lifestyle choice for hype beasts is indicative of this generation’s defensive reaction to a world collapsing all around us.
Hyper-specialist brands like Hoka, On, Salmon, and Asics feed this deep-rooted obsession with practicality and functionality with cutting-edge technology and innovation. How do you even start comparing a shoe inspired by a waffle iron, created by a runner on a college track team, with a technological masterpiece, developed with Swiss engineering, created by a six-time Ironman champion and former professional triathlete?
With sport expanding towards both ends of the spectrum—on one hand, sport being a social activity to fuel connection, on the other hand, sport enabled by Swiss engineering and next-gen technology—Nike is stuck in no man’s land. It is a mainstream brand that is known to everyone but deeply identifies with no one.
To predict the end of Nike would be naive. The cultural juggernaut’s latest showing at the Olympics is sending strong signals of Nike reclaiming its place in culture—from the signing of the first refugee athlete and being the official kit for the IOC Refugee Olympic team, to its provocative Olympic comeback campaign “Winning isn’t for everyone. Winning is everything” that goes back to the root of elite sport - winning. Both initiatives being hyper—focused on specific community groups, taking a stand in culture and driving deep, meaningful engagement.
Nike should continue building on this community-focused approach, especially in a region where the young are asserting themselves and demanding to be heard, and where a plethora of collectives are pushing for social progress and change.
With sport expanding beyond the usual suspects, there is a massive opportunity for Nike to broaden its endorsement beyond typical athletes and start aligning itself more actively with amateur sports communities, social sports spaces, and emerging unconventional sports genres focused on fun, not performance or competition.
Simon Lee
CCO & partner, The Hallway
Although Nike is unarguably synonymous with sneakers, as a dedicated runner, I don’t ever think of turning to the brand when I need a new pair of running shoes, and I suspect that many other runners are the same. Competitor brands, and HOKA in particular, have done a brilliant job of positioning themselves as specialist running brands—a 'go-to' for people who are looking to start pounding the pavements or trails.
With a vast array of sports for which it provides footwear and clothing when it comes to capitalising on the running boom, one could argue that Nike is somewhat a victim of its own scale and lack of specialisation. Whilst running might once have been the brand’s heartland, from a runner’s perspective, it no longer is. It’s perhaps an inevitable consequence of trying to be all things to all sports.
Like many brands in this tough macroeconomic climate, Nike is facing some challenges. This is Nike we’re talking about here though—a brand with extraordinary equity, a proven innovation track record and a history of bold advertising. If anyone has what it takes to make a dramatic comeback, it’s these guys, and I’m looking forward to seeing it.
Nike has built an extraordinary business and brand on the answer to how to face up to challenges and achieve the impossible. In times like these it really pays to walk the talk.
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This post is filed under... Brand Health Check: We assess and (if necessary) solicit suggested remedies |
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