Nike is losing the race

“A Nike reported a drop of 10% in quarterly sales and withdrew its annual forecast on Tuesday.” I rescued this sentence from a Financial Times story in October this year.If I was in the classroom, some “adinho” student would come with the question: “But what does this have to do with marketing, Poli?This is a subject for finance class!” In this situation, the funeral silence of this teacher, even for a few moments, would be enough to generate a deep regret in the mind of the“bocado” student.Without all certainty that can be a classic phrase, such a student is a fact that it remembers of a fact that it is a celebrity

Who could have imagined that a company with such a powerful and admired brand, with such a thought-provoking history, would become news for such misfortunes?

I dare to risk, without the slightest intention of valuing the bones of my craft, that the reasons revolve around issues eminently linked to marketing. When reading and rereading some articles on the subject, certain facts that could go unnoticed, certainly for those who think that marketing happens only in the digital world, captured my attention.

Part of the justification “corporativa” of NIKE in the face of the current situation revolves around the fall in demand for its products, something I distrusted right away.In a quick Google search comes to the following fact: “First, the fitness fashion market is expected to grow from US$13.00 billion in 2023 to impressive US$16.30 billion by 2028.”, it is almost always the most obvious answer is the weakest. Guilt is always coming from somewhere else or from someone else, is not true?

Once the main uncontrollable variable of the equation is discarded, the maxim that “ today's result is a consequence of yesterday's planning” must be considered. In view of this, the aforementioned news reports report that the CEO who took over the management of NIKE in January 2020, that is, shortly before the famous pandemic, was initially praised for conducting business management, having rapidly accelerated the change to direct sales to the consumer.

It is not a new fact, since numerous brands have done so also very competently. However, most of them fell into the devilish temptation that they could grow and thrive without the presence in the traditional distribution channels after the pandemic.No longer need to pay the toll of wholesalers and retailers was really the mermaid's corner for some of them. Even for the brand whose name refers to a goddess of Greek mythology.

Staying out of the traditional distribution channels during the pandemic was almost mandatory, although the presence in these same channels in their digital form was also. But the temptation came precisely from the possibility of having the own distribution channels”. After all, nothing like directly relate to its most diverse target audiences.Overcome the logistical challenges, has everything to work, as it happened.

The temptation became even more seductive when it came to believe in the said “novo normal”, so propagated, disseminated and defended by countless analysts and gurus of the digital world. Idea that this teacher involved in the scribbler always suspected, especially after reading some articles by serious anthropologists who portrayed historical contexts after past pandemics. I expressed this idea clearly in a sentence present in a consulting project for the largest beverage manufacturer in this country: “After the pandemic, people will want their lives back in”.

The demand for shows and tourism are examples, more than evident, that the stubbornness in swimming against the current of obvious ideas was not in vain. Insisting on remaining in the digital channels themselves neglecting the return to the traditional distribution channels charged its price. After all, people returned to stroll in the malls, more than ever. Not being present in physical retail necessarily implies that someone will be. In this specific case, brands such as On and Hoka, especially in lands of Uncle Sam and Greater China. According to the FT, such brands have obtained significant growth in the “pandemic”, a fact opposite to what happened in NIKE.

As Isaac Newton would say, two bodies cannot occupy the same place in space. Recovering the space on the shelves has become the great challenge for NIKE. This will cost a lot of time, especially when you have to face the resentment of once abandoned retailers. And time, in this case, is literally money. I would venture to say that this is a good time to buy shares of this company with a view to a good return in the future of two to three years, but it is prudent not to believe me when it comes to this subject.

Finally, another justification involves portfolio management. Some analysts defend the idea that NIKE dared too much with regard to fashion trends of “in intermediate”, a range that was also invaded by more premium brands and attractive to consumers of this aspect. In view of this, other analysts point out that “the concept of offering everything to all” is no longer valid for the sector in question, even more so for the strategic group of NIKE. In other words, a shock derived from the lack of awareness of some against the elevation of others. I confess that such analysis is complex and requires a very consistent study to reach such conclusions. For now, let us believe in the analysts.

NIKE has always been focused on developing innovative products in terms of design and technology.For a long time, it has preferred to leave its manufacturing and distribution processes unrelated to the core business, just as COCA-COLA does to this day.

Meanwhile, “Adidas reports 10% sales growth in the third quarter and increases the projection for the third time this year”, says another article, published at the end of October by Footwearnews.

In the business world, as in life, everything is allowed, but not everything is convenient.