Retail Matters Podcast: Just Do It!: What Brands Can Learn From Nike’s Mistakes

For years, Nike has been the Louis Vuitton for everybody else — building a premium business in fashion around a logo, a great passion — in Nike’s case for sports — and a mammoth advertising budget.

The active giant spent $4.3 billion last year alone on “demand creation” — shelling out 10 figures to cover the “costs of endorsement contracts, complimentary product, television, digital and print advertising and media costs, brand events and retail brand presentation.”

Nike’s formula has been a powerful one — studied by competitors and partners looking to take market share or get in on the action. But the competition is heating up. It has been particularly fierce in running, where brands like On, Hoka and Brooks are in ascent, but there are also plenty of others coming for Nike, including Adidas, which has been successful lately with its more casual Samba style.

Nike is still well in the lead — with sales of $51 billion last year and a market capitalization of nearly $110 billion — but its advantage is slipping and it is becoming a case study in how a company with the benefits of scale, brand recognition and passion can stumble anyway.

John Donahoe, who’s been president and chief executive officer since 2020, told analysts last month that Nike is “taking our challenges head on and we’re regaining our edge.”

But it’s still a work in progress…