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 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 seemed to be going well, so Donahoe doubled down, accelerating the virtual and Nike strategy from a slew of brick-and-mortar stores.
Soon Nike severed a third of 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 believed that other people had moved to the internet and left physical fun behind.
“But as soon as things started to reopen, the social facet of shopping, the networking facet of shopping, came back and Nike was no longer there. “
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 introducing new ideas, specifically 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 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 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 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.
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 looking for consumers to learn 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 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, 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 for 4 years in a shoe store,” said another. “The leading cause of death at Nike has been rising prices.
“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 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 peak videos don’t show how excited they are about buying their new sneakers.
“Why do I spend £200 on a pair of Nike shoes that are likely to arrive covered in glue stains and break 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.
Paris recovering
But it’s not all doom and gloom for Nike. This summer, he has a golden marketing ace up his 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 moment for Nike for years,” Heidi O’Neill, Nike’s president of consumer, products and brands, told Reuters in April.
Nike secured prestige as an official sponsor of Team USA. 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 claimed glory in the 100 meters, and swimmer Katie Ledecky was 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 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 profits and averaged 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 knowledge also showed that Nike was able to convert many visits to its online site into sales. And it 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 Olympics marketing push may not end all of Nike’s real and perceived upheavals 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 sincerely and firmly believe that the logo is still capable of recovery. ”
Nike did not respond to a request for comment.
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 had the most recent fiscal figures and here the picture is significantly closer to Reeves’ editing than to those other insights. “
The government’s borrowing in July exceeded expectations, and the consequences for the public and the fiscal burden in the October budget now look “ominous,” 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 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 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 US 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 follow the arrival of the EU Entry/Exit System (EES). The government will require other people to register their fingerprints and take photographs. Arrival at the airports.
Addressing the launch, EU Home Affairs Commissioner Ylva Johansson said that 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 heavily reliant on imported energy 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 the costs of football blouses as the new Premier League season begins. . .
To learn more about this story, watch this explanation produced 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’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. . .
Surprised, the false elegance of the “town” of Walthamstow resists Gail’s expensive offers. They already seem very happy to pay market prices at her existing Spar store without complaint. Hot Ingredients Sausage Package Approximately 6 Pounds. !
Keith
Most places would love to have Gail’s opening. Their food and bread are excellent, as is their café, they have a very nice decoration and bring a touch of elegance to any important 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 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. Do I get auto credit customer coverage if I pay part money and part auto credit?
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 shared how they and their shared things. . .
We split all expenses more or less equally. He earns much more than me and helps me keep his money and his savings after 50 years of living together. I probably have no idea how much he saves and probably not a percentage of anything. Yes, you read that right!
CP
100% of all cash goes into a single account for bills, disposable income, etc. We manage everything in one spreadsheet! We’ve never had a war of words after thirteen years and we only have 30!I can never believe that I go to dinner and someone says “I’ll get it”. 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 child, all the cash goes into a joint account to get a small allowance for each. Financial equality is 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 earns around £60,000 more than me 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. He 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 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 expansion of fines for parents who take 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
Totally disagree with the penalty of temporary leave. There are countries where parents can authorize up to five days off depending on the year. A long weekend here and there, or a week-long once a year, probably wouldn’t hurt a child’s outlook!
TermTimeTravel
Starbucks’ new chief executive, Brian Niccol, is under fire over the company’s offer to fly him 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 offer 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 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 cancelled 14 flights from Heathrow and others delayed, while two flights from Leeds Bradford Airport were cancelled and 3 early morning arrivals were diverted to Liverpool.
The increase in the energy price cap has prompted new calls for a change in fuel bills for the winter.
The government plans to make the payment to pensioners subject to means-tested, making it available only to those who get a pension credit.
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, says it suspended orders from suppliers who hired young people under 16.
Both cases were “resolved quickly”, he said, with corrective measures such as terminating the contracts of junior employees, organizing medical checks and facilitating 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 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.
Coupons are only valid for two years from the date they are 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, ‘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, 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 for debt.
As a result, the FTSE hundred is trading up 0. 2% in early trading 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 limit each quarter and estimates how much the average family would pay over 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 how much energy you actually use. If you use more fuel and electricity than you buy for £1,717, 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.
Here’s what’s limited:
The Ofgem value limit only applies to other people who live in England, Scotland and Wales and who have 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 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 October’s price cap with the cheapest 12-month consistent tariff, said Richard Neudegg, Uswitch’s chief regulatory officer.
At £1,592 a year, it would also avoid another small increase 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 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, 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 a pension credit, it is estimated that up to 880,000 families entitled to this aid have already applied for it, according to the Ministry of Labour 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 focus on “myths” that would possibly dissuade other people from applying, such as the fact that having savings, a pension, or owning a home is not necessarily a barrier to getting a pension credit.
You can learn more about how to claim pension credits on the How to Apply for Government page.