Nike reported a 10% drop in quarterly sales and withdrew its annual forecast on Tuesday.I rescued this phrase from an article in the Financial Times in October of this year. If I were in the classroom, some eager student would come with the question: "But what does this have to do with marketing, Poli? This is a topic for finance class!”. In this situation, the funereal silence of that teacher, even if for a few moments, it would be enough to generate a deep regret in the mind of the "mouthy" student. With all certainty that may exist, that student would remember a famous phrase from their teacher: "Marketing is the twin brother of finance", what is justified by the fact that the word "profit" is present in the most classic definitions of marketing
Who could imagine that a company holding such a powerful and admired brand, with such an intriguing story, would become news for such unfortunate reasons
I dare to take the risk, without the slightest intention of valuing the bones of my trade, that the reasons revolve around issues primarily related to marketing. While reading and rereading some articles about the topic, certain facts that could go unnoticed, certainly for those who think that marketing only happens in the digital world, they captured my attention. Some of them are unbelievable
Part of NIKE's "corporate" justification in light of the current situation revolves around the decline in demand for its products, something I suspected right away. In a quick Google search, one comes to the following fact: "In first place, the fitness fashion market is expected to grow from US$13,00 billion in 2023 to an impressive US$16,30 billion by 2028.Logo, it is easy to conclude that, almost always, the most obvious answer is the most fragile. The blame always comes from somewhere else or is from someone, it is not true
Discarded the main uncontrollable variable of the equation, one must consider the maxim that "today's result is the consequence of yesterday's planning". У світлі цього, the aforementioned news reports indicate that the CEO who took over the direction of NIKE in January 2020, that is to say, shortly before the famous pandemic, was initially praised for the management of the business, having rapidly accelerated the shift to direct-to-consumer sales
It is not a new fact, given that numerous brands have also done so very competently. However, a large part of them fell into the devilish temptation that they could grow and prosper without the presence in traditional distribution channels after the pandemic. Not having to pay the toll for wholesalers and retailers was truly the siren's song for some of them. Even for the brand whose name refers to a goddess of Greek mythology. Apparently, even the gods make mistakes
Staying out of traditional distribution channels during the pandemic was almost mandatory, even though the presence on those same channels in its digital form was also. But the temptation came precisely from the possibility of having one's own "electronic" distribution channels. After all, nothing like directly engaging with your various target audiences. Overcoming logistical challenges, it has everything to go right, how did it happen
The temptation became even more seductive when people started to believe in the so-called "new normal", so widespread, spread and defended by numerous analysts and gurus of the digital world. An idea that this pretentious writing teacher has always suspected, mainly after reading some articles by serious anthropologists who portrayed historical contexts following past pandemics. I expressed this idea clearly in a sentence in a consulting project for the largest beverage manufacturer in this country: "After the pandemic, "people will want their lives back"
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 staying in their own digital channels while neglecting a return to traditional distribution channels has come at a cost. 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 like On and Hoka, mainly in Uncle Sam's lands and in Greater China. According to the FT article, such brands achieved significant growth in the "post-pandemic", opposite fact to what happened at NIKE
As Isaac Newton would say, two bodies cannot occupy the same place in space. Recovering shelf space has become the great challenge for NIKE. This will take a lot of time, even more so when one has to face the resentment of once-abandoned retailers. It is time, in this case, it's literally money. I would dare to say that this is a good time to buy shares in this company with a view to a good return in two to three years, but it is wise not to believe me when the subject is this
Finally, another justification involves portfolio management. Some analysts argue that NIKE has been too bold regarding "mid-level" fashion trends, segment that has also been invaded by more premium brands appealing to consumers in this segment. У світлі цього, other analysts point out that "the concept of offering everything to everyone" no longer applies to the sector in question, even more for the strategic group of NIKE. In other words, a shock derived from the downgrading 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's believe in the analysts
NIKE has always prioritized its focus on the development of innovative products in terms of design and technology. For a long time, preferred to keep its manufacturing and distribution processes separate from the core business, just as COCA-COLA does to this day
Meanwhile, "Adidas reports a 10% increase in sales in the third quarter and raises its forecast for the third time this year", say another subject, published at the end of October by Footwearnews
In the business world, just like in life, everything is allowed, but not everything is convenient
