Nike was slow to innovate.

While a leader in professional sports , Nike is facing increasingly fierce competition in the running shoe and lifestyle segments.

Earlier this month, Nike returned to the high-quality professional athletic shoe market, with marathon runner Kelvin Kiptum setting a world record while wearing a new version of the Alphafly 3. But the company is still losing momentum in other segments, according to the WSJ .

Competitors like Hoka and On are gaining a larger foothold in the running shoe market as well as in comfortable shoes for work or school. Adidas and New Balance are also leading the way in the streetwear market by releasing dozens of new colorways for older models.

Meanwhile, sales in North America – Nike's largest market – fell 2% in the third quarter. Higher product prices were not enough to offset a 10% drop in sales, the first decline in over a year.

Nike remains the world's largest athletic footwear and apparel company, generating $48.7 billion in revenue for the fiscal year ending May 31. However, some consumers and industry analysts say Nike's pace of innovation is slowing. The company is also struggling with rising prices, causing consumers to reconsider their spending plans.

Workers install Nike logo lights outside the Wukesong Arena in Beijing, China, on August 28, 2019. Photo: Reuters

Del Shaffer, a real estate agent in Charleston, South Carolina, has worn Nike running shoes for decades, but last year switched to Hoka's Mach 4 because he wanted a softer shoe with more cushioning. The 44-year-old runs daily after dropping his children off at school and says he feels a significant difference in material since switching to Hoka. "It's much more comfortable, and I'm looking forward to not having knee surgery when I'm older," Shaffer said.

Hoka-owned Deckers Outdoor brand generated $1.4 billion in revenue for the fiscal year ending March 31, up from $223 million in 2019, when the company first reported sales for the brand. In 2021, the company abandoned its previous description of shoes only for "ultralong-distance runners and athletes," instead including "world champions" and "aesthetic leaders."

On Holding, the owner of the On brand, reported revenue of approximately $1.3 billion last year, a 69% increase compared to the same period in 2021. The Swiss company aims for $1.9 billion in revenue by 2023 and expects to double that figure by 2026.

Footwear industry analyst Matt Powell argues that all these brands are taking market share away from Nike. In response, Nike announced a roadmap for innovation spanning over 50 years. According to this roadmap, the company's products "will deliver innovation, performance, style, and comfort, exciting consumers for years to come."

In 2017, the company introduced the lightweight Vaporfly running shoe, which became a focal point in running competitions. Analysts say this shoe is groundbreaking, but it's more suited to athletes willing to spend over $200, not necessarily those simply looking for a comfortable pair of shoes.

During the pandemic, Nike focused on redesigning and adding new colorways to some of its most popular lines, such as the Air Force 1, Air Jordan 1, and Dunk. This pleased some fans but annoyed others, including sneaker enthusiasts and limited-edition shoe dealers.

"Nike is really good at innovating, but they keep innovating the wrong things," commented James Hesse, who has owned a YouTube channel about sneakers for decades.

From design concept to shelf, the development process for a shoe at Nike takes approximately 18 months. The pandemic and subsequent supply chain disruptions have thrown their production process into disarray. Nike is also grappling with inventory issues caused by the pandemic – initially insufficient stock to sell, but then an oversupply. To boost sales, the company is reconnecting with some retail partners they had cut ties with just over a year prior.

Nike CEO John Donahoe said the company prioritizes daily runners who are looking for something new and aims to reach those customers whether they are in a Nike store or not. "We are focused and actively addressing areas where we need to improve our capabilities," Donahoe said.

The company released the $80 Nike Interact Run last month as an affordable performance shoe. They are now rolling out a new technology for running shoes, expected to be ready for the 2024 Summer Olympics.

Nike's leadership is also working to improve marketing and product categorization, while fostering more meaningful connections with everyday runners. The decision to move further into the mass market represents a shift away from the company's reliance on limited-edition products to drive sales.

In 2020 and 2021, new limited-edition releases on Nike's SNKRS app typically sold out quickly, but now some models remain available for weeks. According to data from Earnest Analytics, average transactions on sneaker resale platforms—specializing in rare shoes, such as StockX and GOAT—have declined since April 2022.

Nike is recognized as the leading apparel and footwear brand for teenagers, according to a recent survey from investment bank Piper Sandler. However, footwear analyst Powell says young customers want new and unique products to stand out, and Nike needs to avoid using different colors of the same sneaker model if it wants to grab their attention.

Some sneaker enthusiasts and resellers believe Nike needs to create new collaborations, similar to the success of the Jordan collaboration with rapper Travis Scott. A pair of golf shoes from that collaboration, released last week, fetched around $1,000 on the resale market, equivalent to about six times the original retail price.

However, this approach isn't guaranteed to succeed either. The latest collaboration between Nike and hip-hop superstar Drake, released about a month ago, is still not selling well. Retailers say it's not generating any profit in the resale market. Currently, you can buy it on StockX for less than Nike's list price.

Phiên An ( according to WSJ )

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