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 sales efforts and away from the conventional.
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 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 ended around the world, other people returned to retail 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 believed that other people had moved online and left physical fun behind.
“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 waiting 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 introducing new ideas, specifically in a segment of the market that Nike has long dominated: functional running.
HOKA’s thick foam soles are a big draw for runners, while On’s generation of well-marketed (and now patented) cushioning formulas have proven popular with casual and professional runners alike.
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; The then Prime Minister Rishi Sunak already owned a pair 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 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 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 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 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 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 edition of sneakers that costs less than £120. Most “highly anticipated” shoes cost between £150 and £200.
For older products, like the Air Max 95, a new pair starts at £174. 99. Some historically less expensive options, such as the Air Jordan 1, now charge around £130 at 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 main cause of death at Nike has been price increases.
“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 to each other. Like those who raise the biggest complaint of the moment that consumers have about Nike shoes: 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 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 very well that glue smells like a palette,” says another.
Recovering Paris
But it’s not all bleak for Nike. This summer, there’s a golden marketing asset 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 a good brand can motivate consumer confidence and percentage value: it was essential that things go 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 moment for Nike for years,” Heidi O’Neill, Nike’s president of consumer, product and brand, told Reuters in April.
Nike secured the prestige 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.
Nike’s lifetime sponsor, LeBron James, donned trendy metallic gold shoes from his own traditional LeBron 22 line to win a gold medal.
And it’s not just at festivals that the Nike brand discovers its moment. Each American athlete won a special package containing 50 pieces of clothing, shoes, and accessories, adding “interview wear” and “peoplewear” to keep the logo visual in each and every imaginable moment in Paris.
This is important, because Paris 2024 broke audience records worldwide. In the UK, BBC Sport’s Tightening Policy was broadcast 218 million times, more than double that recorded in Tokyo.
On the other side of the Atlantic, NBCUniversal’s multiplatform policy generated record advertising profits 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.
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 logo that suffers 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 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 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 public finance figures and here the picture is significantly closer to Reeves’ edition than to the other knowledge. “
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 the 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 timetable for the new European visa rules.
Citizens of the United Kingdom will have to pay a visa waiver fee of €7 to Europe starting next year. The additional payments, similar to 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 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 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.
Friday morning showed the energy price cap would rise in October, with another increase expected in January.
“Unfortunately, a volatile wholesale market and a country that relies heavily on imported energy have 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 Value Checking readings are. . .
We’ll be logging off from regular updates until the end of the holiday week, but check out our weekend reading starting at 8am. m. on 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 comments. We’ll start with the updates we’ve made to Gail. . .
Some readers agreed with the reaction, but others didn’t see what all the fuss 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
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 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. Do I have credit car customer cover if I pay part in money and part in car credits?
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 have shared things. . .
We split all expenses more or less equally. He earns much more than I do and helps to preserve his money and savings after 50 years of living together. I surely have no idea how much you have stored and probably not percent anything. Yes, you read that 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’re only 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 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 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 pass out, she pays once, I pay later, she doesn’t even check out 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 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 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’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
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 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 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 commuters 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 U-turn 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 misguided” and “it would be a crisis for pensioners on low and modest incomes” following the latest bad news about 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 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 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 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 £14m will run 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 and go to ‘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 hesitant start to the day in the 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 for debt.
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 every quarter and estimates how much the average family would pay in a year at the new unit price.
This figure of £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 gain advantages from constant rates.
Another quarter, fluctuating energy costs to face – replace them to 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 the October price cap on the cheapest 12-month rolling tariff, said Richard Neudegg, head of regulation at Uswitch.
At £1,592 consistent with the year, it would also avoid any other small build-up expected in January, he said.
It’s worth noting that Uswitch has an interest in other people moving, and a constant rate may still end up costing you more if the value cap falls below that constant rate 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 seeking safety to shop around to see what’s being offered and personalized pricing based on how much energy they’re likely to use. “
Here are the top 10 lists of constant energy prices 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.
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 for Work and Pensions.
The government’s awareness campaign will identify families claiming these benefits and inspire retirees to apply by the Dec. 21 deadline for retroactive application for pension credits to get winter fuel payment.
It will be based on “myths” that may discourage other people from applying, such as that having savings, a pension or owning a place is not necessarily a barrier to getting a job. a pension credit.
You can learn more about how to claim pension credits on the How to Apply for Government page.