The American sportswear giant is experiencing its worst slump in a decade. New competition is part of the problem but according to industry insiders and athletes, many of Nike’s wounds are self-inflicted: the results of disruptive restructurings, stalled innovation and uninspiring marketing.
https://www.businessoffashion.com/articles/retail/nike-sportswear-market-challenges-john-donahoe/
When I started at Nike in the 1990s, for the first 2 years it was just a job. I looked around and thought the long time employees had drank a little too much of uncle Phil’s Kool-Aid.
Then after a few year, something happened. I got it. Nike became a passion for me. I loved the company and it became a way of life. I loved how we did everything so well and it was all I could do to keep up with my peers. Anything was possible!
Then Phil retired and the culture changed. Turnover got so high that I recall a coworker bragging that they had been there for 2 whole years, and I thought “sh*t, it takes 2 years just to know which way is up. This is still just a job to you.”
As turn-over increased and the company voluntarily laid off the very people who made it great to replace them with cheap and young labor, I saw the culture vaporize.
No longer was staying fit and using the gym a broadly held value. People worked themselves to death and didn’t have time for the gym. In fact, I’d go to the company gym and it would often be empty!
Slowly, the average employees tenure, and the growth of too many contractors, ate away at the people who realized what a special place Nike was. They were replaced with people who felt like I did during my first 2 years: it’s just a job.
The sad fact is that Nike didn’t value its DNA and culture, and it dissolved.
Replacing or rebuilding it may not possible.
Phil Knight deserves more credit for what a special company he built (and lost.)
Honor the greats who made Nike what it was.
Pity the fools who destroyed what was the best company in the world.
Years of “good old boy” politics, promoting incompetence and laying off good people who were trying to make positive change, has caught up to them.
Oddly, a culture devoid of accountability isn’t a recipe for success.
Nike is inundated by mediocre people from the top to the bottom of the chain. The article is right, this is self-inflicted.
@1fgt yes Nike is getting flanked on both sides with footwear. Eight major retailers were recently surveyed to determine how they are currently pricing footwear. On average those retailers are lowering prices on 44% of the Nike footwear they sell. Those retailers aren’t lowering prices as much for Nike’s competitors:
“The sample of eight retailers whose pricing Vertical Knowledge tracked sold far more Nike sneakers at a discount than they did Hoka sneakers (4.5%), Adidas shoes (18.9%), Switzerland-based ON Running shoes (23.1%) or Puma styles (37.4%), the data show.”
Nike has had slumps before and it has always recovered. I’m genuinely afraid this time is different though. To me it feels different. Past slumps were mostly due to the economy and factors Nike couldn’t control. This time it feels like we did it to ourselves by not effectively innovating and marketing. We opened the doors to both long time competitors and upstarts and said “Come on in! Here’s some market share for YOU, some for YOU, and hey you little upstart sitting over there in the corner…we have some market share for YOU too! Don’t be shy now!”
It’s been like Oprah up in here just giving it all away! If Nike doesn’t get back to being Nike this current layoff won’t be the last.
https://money.usnews.com/investing/news/articles/2024-02-02/retailers-slash-prices-on-more-nike-sneakers-in-2024-data-shows
It’s a combo of things.
Product: Aside from high-end Alpha and Vapor footwear, Nike is getting flanked on both footwear sides by more nimble competitors. Don’t even get me started on apparel. I literally can’t remember the last time I saw a new apparel item that struck me as innovative or a must buy.
Marketing: The ability to mass market that catapulted Nike to success is gone. It’s all about niche marketing now, getting your cred one consumer at a time. In addition Nike marketing is now in no way inspirational. It’s bland and stale. Moreover the younger generations are much more aware that they’re constantly being marketed to…and they resent it more than previous generations.
Leadership: When I was at Nike senior leaders were competent and respected (mostly). That was when those leaders had more autonomy, less bureaucracy, less DE&I to deal with, and less “you should be offended by everything” internal culture to deal with. They were bold and made bold decisions. Sometimes those leaders messed-up. But they largely got it right. Those leaders are now mostly gone.
Mojo & Culture: Nike used to have it. For many years I would strut into work everyday myself knowing “This is THE place!” We worked very hard and produced results but played just as hard. If you’ve never been to an off-site that people were still remembering and laughing about five years later, you missed out. My last couple years at Nike however? It was a job. A job for which I was increasingly uninspired. You could see the internal culture declining and it was sad.
Nike knows what works: Innovation, product, groundbreaking marketing. It just isn’t doing those things like it used to. Nike now needs a hard reset, but one in which the RIGHT people are let go rather than the wrong people. That starts at the very top.
The CEO is the least of our worries - he seldom makes decisions that make
It to retail. But the second and third line is garbage and those people have not done anything to set us up for success in the last 4 years
Yeah @kgp+1qVqiC6X, the company will go on but the culture has gone to sh-t
LMAO.. Nike is doing fine.
JD is that you?
Sure, this behemoth isn't going anywhere, but the consultants have no grasp on culture, taste and priorities that are shifting. No little brand is going to come close to Nike's numbers, but collectively 100 brands WILL dent it's market share and be nimble and take the risks that Nike can't afford to do anymore.
Nike used to lead the design space, now they follow. That's undeniable.
Anyone who thinks JD is a good CEO is delusional.
This is ridiculous and people love to take shots at a winner. There aren’t actually good justifications for these layoffs except the pivot in strategy and everyone needs to contribute
Nike is doing fine.
LOL..keep promoting people like TT to a VP and Nike will continue to be off course for a longtime.
it hasn't at all
"It’s hard to pin Nike’s problems on any one cause. But sneaker industry insiders trace many of the brand’s shortcomings to decisions made early in the tenure of John Donahoe, who was named chief executive in January 2020. His arrival came amid an exodus of veteran designers, marketing gurus and executives. Several waves of restructuring caused further upheaval. Decisions once left to the heads of categories such as basketball or running were centralised. The company invested ever-more design and marketing resources into its booming retro sneaker business, capitalising on seemingly bottomless demand for iterations on vintage Jordans and Air Force 1s."
The gloves are off
To avoid the paywall:
https://archive.ph/hW0dl
And yet Nike's top competitor Adidas gross sales is only 50% of what Nike sales...when you are at the top....everybody takes shots.
paywalled