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As I went looking for a new pair of sneakers the other day, you could immediately feel the buzz, or not, with the different brands.\u00a0 Adidas looked revitalised with the \u201cSamba\u201d or \u201cGazelles\u201d lines. Hoka and their big, almost platform-like soles seemed to be everywhere.\u00a0 \u201cOn\u201d, as a new brand, seems to be pumping, and even New Balance has a bit of pizzazz.<\/p>\n
For streetwear like sneakers, there is either buzz or not\u2026. a zeitgeist that captures what\u2019s \u201cin\u201d. Nike, in comparison to other brands, looked stale, like an also-ran brand. It also seemed to be less prevalent — I just didn\u2019t see it as much in my sneaker-shopping journey.<\/p>\n
As I dug a little deeper, I saw that the stock has tanked and is half of what it was a year and a half ago. And as we speak, there is a huge investor activist push for significant change.<\/p>\n
Yikes, Nike, what happened?<\/p>\n
Nike has long personified innovation and leadership in key sporting goods categories such as basketball or running.\u00a0\u00a0 The new incoming CEO (John Donahoe) inherited this rich legacy but wanted to show his leadership.\u00a0\u00a0 Lots of media coverage and analysis love to point out that he engaged McKinsey, and the strategy outcome was to reorganise and double-down on \u201cdigital-first\u201d to drive new efficiencies.<\/p>\n
The theory behind the new strategy was to move away from divisions around individual sports categories and go deeper on demographic\/persona data and analytics.\u00a0\u00a0 This would enable the company to sell more to each market segment.\u00a0\u00a0 Simultaneously it would increase digital direct-to-consumer, improve margin and adjust its ecosystem players, such as reducing on-prem wholesaler and retail partners.<\/p>\n
\u201cThese changes led to hundreds of layoffs and a reorganisation of the company<\/a> into men\u2019s, women\u2019s, and kids\u2019 categories, moving away from divisions focused on individual sports.\u201d<\/p>\n Nike took its eye off the ball.<\/p>\n True category innovation at the sport level was stifled.\u00a0 The focus became initiatives such as \u201chow do we sell more to the 35 \u2013 45 male, runner segment?\u201d\u00a0\u00a0 And it is less about innovation, and driving the sports categories, and more about a 360 view of consumer behaviour.<\/p>\n Also Read:\u00a0Lead, don’t follow: The essential guide to category creation and market domination<\/a><\/strong><\/p>\n In other words, I don\u2019t lead you, I listen to you. And that perspective went all wrong: \u201cthe company\u2019s failure to innovate and reliance on classic models like Air Force 1s, Air Jordan 1s, and Dunks have left it vulnerable in a rapidly evolving market.\u201d<\/p>\n The leadership and innovation at the category level was kicked aside, in favour of a flawed go-to-market strategy.<\/p>\n If you want to read more on this monumental failure, then The Atlantic had a great article in January this year pointing out the raft of issues from flooding the market with too many of the same line, to a market exhaustion with the retro-cool of Air Jordans.\u00a0 Unfortunately, they weren\u2019t cool anymore and competitors stole a step on Nike.<\/p>\n And that is at the heart of the issue: true Category Designers and Innovators don\u2019t just look at the data. They look beyond past behaviour. They look at the problem from a different perspective. What\u2019s happening on the urban basketball courts? What happens before and after the hoops game? What\u2019s the missing and how can I attack and solve this gap\/problem? How do I define and truly lead the Category?<\/p>\n Also Read:\u00a0Leading the category, then losing it all: What WeWork can teach us<\/a><\/strong><\/p>\n So Nike whiffed big time on creativity and innovation in the key categories that they used to lead.\u00a0 And then they made it worse.<\/p>\n Categories don\u2019t exist as a singular company and need an ecosystem to endure. Nike by all accounts messed that up as well. \u00a0The overwhelming focus on D2C seemed like a great way to drive improved efficiencies and margin. They exited multiple wholesale and retail relationships (and are now negotiating to get them back). The reality is that many consumers still wanted the physical experience to look and feel the shoe.<\/p>\n Key analysts have commented \u201cNike\u2019s decision to disengage from long-standing wholesale partners in favor of a direct-to-consumer strategy backfired.\u00a0 This move allowed competitors like Hoka, On, and New Balance to capture market share at key retail chains.\u201d\u00a0 Nike clearly blinked, and the competition moved on it.<\/p>\n Will Nike get its \u201csoul\u201d (\u201csole\u201d ahem) back? They are hiring previous talents who left and that may help, but at the heart of the issue is innovation at Category level, reinforced with an ecosystem that buys into that vision and leadership.<\/p>\n Of all brands, we expect Nike to lead, and not follow. Somehow that got lost, and we will now need to see if they can just do it.<\/p>\n For nimble startups and aggressive growth companies, it offers a master-class in how to look at their own category and ecosystem, and seize opportunities when the competition blinks.<\/p>\n —<\/p>\n Editor\u2019s note:\u00a0e27<\/b>\u00a0aims to foster thought leadership by publishing views from the community. Share your opinion by\u00a0submitting<\/a>\u00a0an article, video, podcast, or infographic<\/p>\n Enjoyed this read? Don\u2019t miss out on the next insight. Join our WhatsApp channel<\/a> for real-time drops. This article was first published on September 24, 2024<\/p>\n<\/div>\n The post Seizing opportunity when the competition blinks: Look for category and ecosystem openings<\/a> appeared first on e27<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" As I went looking for a new pair of sneakers the other day, you could immediately feel the buzz, or not, with the different brands.\u00a0 Adidas looked revitalised with the \u201cSamba\u201d or \u201cGazelles\u201d lines. Hoka and their big, almost platform-like soles seemed to be everywhere.\u00a0 \u201cOn\u201d, as a new brand, seems to be pumping, and […]<\/p>\n","protected":false},"author":1,"featured_media":1580,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[14],"tags":[],"_links":{"self":[{"href":"http:\/\/www.fresnoforeclosure.com\/index.php\/wp-json\/wp\/v2\/posts\/1578"}],"collection":[{"href":"http:\/\/www.fresnoforeclosure.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.fresnoforeclosure.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.fresnoforeclosure.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.fresnoforeclosure.com\/index.php\/wp-json\/wp\/v2\/comments?post=1578"}],"version-history":[{"count":2,"href":"http:\/\/www.fresnoforeclosure.com\/index.php\/wp-json\/wp\/v2\/posts\/1578\/revisions"}],"predecessor-version":[{"id":1581,"href":"http:\/\/www.fresnoforeclosure.com\/index.php\/wp-json\/wp\/v2\/posts\/1578\/revisions\/1581"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.fresnoforeclosure.com\/index.php\/wp-json\/wp\/v2\/media\/1580"}],"wp:attachment":[{"href":"http:\/\/www.fresnoforeclosure.com\/index.php\/wp-json\/wp\/v2\/media?parent=1578"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.fresnoforeclosure.com\/index.php\/wp-json\/wp\/v2\/categories?post=1578"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.fresnoforeclosure.com\/index.php\/wp-json\/wp\/v2\/tags?post=1578"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
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