Nike & Competition in Sports Footwear

"Your competitors can be your best teachers." - Unknown

I’ve always been a fan of sports shoes. Brand names mattered to me from my teenage years to my senior years. Skellerup, Adidas, Puma, Reebok and Nike were early in my awareness followed by New Balance and recently Skechers. Teenagers of my generation bought Skellerup, a local New Zealand manufacturer, if you couldn’t afford the big brands Adidas or Puma. Basketball fans at school chased after the Converse All Stars brand. In my 30s I bought my first pair of Nike shoes; I’ve been a fan ever since. In my 60s, while still a Nike fan I was attracted to Skechers. Skechers looked soft, comfortable and attractive with a bold, white sole. Later I bought New Balance for work when I perceived their quality, and appearance had improved sufficiently over their earlier products.

Why a Sport Shoe

There are many good reasons for people buying a pair of sport shoes. Walking for fitness and for work, buyers looked for shoes with more grip and traction or were more stable. As fashion trends change a big attraction has been the acceptance of wearing sport shoes with a suit, and the casualisation for office wear.

The decline of Nike

I couldn’t help noticing Nike shoes were available in a Nike dedicated store and in other general shoe stores like Foot Locker, JD Sport and Rebel Sport. 

In 2017, Nike still the number one retailer of sport shoes, decided to adopt the direct-to-consumer approach to selling its shoes. Nike boldly reduced the number of sales through stores like Foot Locker and the like, in favour of more online sales.

The strategy created opportunities for other manufacturers to take up shelf space that Nike had abandoned. In hindsight this is the main reason for Nike sales to slow compared to its competition over the years since 2017.

There were other reasons for the decline of Nike. Nike’s Vaporfly running shoe also released in 2017 raised competition efforts in the rest of the industry to match it. I suspect this competition plus the available shelf space allowed New Balance and Skechers to increase their brand awareness and sales, through Foot Locker and others.

Nike Readjusts

Other brands continued to innovate, sport shoes with more grip and traction, shoes customised for individual sports, offering more support and stability, while allowing for body movement to efficiently reduce fatigue. When the pandemic eased and shoppers returned to stores, Nike was not able to take full advantage as their competitors occupied the shelf space.

Nike have admitted it was an error giving up shelf space in attempting to increase online sales. The company is now rebuilding the relationship with stores, retail stores it once scorned, to access more shelf space in Foot Locker, JD Sport, and similar retailers. 

Other brands in other industries have suffered the same fate as Nike in adopting the direct-to-consumer approach. Rather than sacrificing successful sales strategies, such as instore retailing, to pursue another without the proven history, has hurt the brand and profits of the company, Nike.