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.
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 pulled 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 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. “
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 introducing new ideas, specifically in a segment of the market that Nike has long dominated: functional running.
HOKA’s thick foam soles are a huge draw for runners, while On’s well-marketed (and now patented) cushioning system technology has proved popular for casuals and professionals 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; already the then Prime Minister Rishi Sunak owned a couple of Sambas. . .
So where has Nike’s innovation been this time?
Air-cushion sneaker soles, known as the Air Max bubble, debuted in 1978.
The most recent major innovation in Nike shoes, according to Herval, is 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.
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 more than a decade ago, the streetwear fandom 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 looking for consumers to find out 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 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 cost around £130 at 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 in a shoe store for 4 years,” said another. “The biggest killer at Nike has been price increases.
“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 to each other. Like those who raise the biggest complaint of the moment that consumers have 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 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 maximum videos don’t show how excited they are about purchasing 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 palette,” 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 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 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 won glory in the 100 meters, and swimmer Katie Ledecky was on the podium 4 times.
Nike’s longtime sponsor, LeBron James, donned gold-style metallic shoes from his own traditional 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 global audience records. In the UK, BBC Sport’s Match Politics was broadcast 218 million times, more than double the figure 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 struggling logo 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 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 value has slowly recovered, gaining roughly 14% last month following the recent investment by billionaire U. S. 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 recovery. “
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 were given the latest figures on government finances and here the picture is significantly closer to Reeves’ edition than to the other knowledge elements. “
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 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 timing of the new EU 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 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 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, which would take 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 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.
A typical annual bill will now rise to £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 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 covered in Money over the past week have sparked an avalanche of comments. We’ll start with the updates we’ve made about 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 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
Some of us wondered why we were covering this story. . .
Who or what is Gail?
Alangillie
When did Walthamstow become a “green suburb”? Did you imagine this to be East17’s home?And why is it national news? Stores open and close all the time in all parts of the country. Do any of your publishers live there and oppose it?I don’t see this as 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 coverage 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 pay a penny by credit card. Everything you want to know is here. . .
Many of you have 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?
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 was mature enough, I put the difference into shared savings. Since I have a son, all the cash goes into a joint account to get a small allowance for each of us. Financial equality is vital to a successful 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 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 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’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 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!
TermTimeTravel
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 offer stated that he would not have to move to the company’s headquarters in Seattle, Washington, from his family’s 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 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 payment to pensioners subject to a means test, making it available only to those who get a pension credit.
But Caroline Abrahams, director of the Age UK charity, called it “reckless and wrong” and “would be a crisis for pensioners on low and modest incomes” following the latest bad news about energy costs.
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 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 quell 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 £14m will run out on Saturday.
Vouchers are only valid for two years from the date of issue, so it’s worth making sure you don’t have any hidden in your account.
To check online, go to the Tesco Clubcard online page and ‘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 complimentary 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 chairman of the U. S. central bankHe will deliver a highly anticipated speech in which he is expected to sign that the first interest cut through the Federal Reserve will come next month.
Jay Powell, however, should 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 has lately been 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 reduce borrowing costs.
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 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 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 how much energy you actually use. If you use more fuel and electric power than you buy for £1,717, pay more.
Since prices have fluctuated significantly with each quarterly release over the past four years, using an annual figure also provides an imperfect basis for a medium-term household budget.
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 get constant rate benefits.
Another fourth, the fluctuation in energy costs to manage – replace your family budget.
But there are constant 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 a year, it would also avoid any other small increase 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 of 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 lists of constant energy prices 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.
Previously, cash was available to anyone over state retirement age, but will now be limited to those who have passed state retirement age and receive pension or other credits on resource terms.
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 before December 21, the deadline to submit a retroactive application for pension credits to obtain the 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.