In a sea of people talking about only ads, creative and socials, it’s so refreshing to see this case study about how powerful distribution is as a reminder that marketing was never just about ‘promotion’ but all the 4Ps!
Something tells me that this is just a dip. The move to go DTC was a mistake of catastrophic magnitudes. The consequences have been compounding, but I think if they get back to the basics, they'll be okay in the end. It took a lot for Adidas to reach this point.
Agreed. They are in a tough spot right now but I think the recovery is more a question of “when” rather than “if”. They are still a behemoth in this space, but it will take time!
The line that nails it: Nike confused owning the channel with owning demand. Cutting wholesale to chase DTC margin looks smart on a spreadsheet, but shelf space doesn't sit empty waiting for you to come back - On and Hoka filled it in about a season. The performance-marketing mistake is the same shape: it looks like it's working right up until the brand equity it's spending down runs out. Distribution and brand equity are both accounts you can draw down. Nike drew down both at the same time.
In a sea of people talking about only ads, creative and socials, it’s so refreshing to see this case study about how powerful distribution is as a reminder that marketing was never just about ‘promotion’ but all the 4Ps!
Great read!
Thanks a lot for reading and leaving a comment, Manya. Glad you found it interesting!
Something tells me that this is just a dip. The move to go DTC was a mistake of catastrophic magnitudes. The consequences have been compounding, but I think if they get back to the basics, they'll be okay in the end. It took a lot for Adidas to reach this point.
Agreed. They are in a tough spot right now but I think the recovery is more a question of “when” rather than “if”. They are still a behemoth in this space, but it will take time!
The line that nails it: Nike confused owning the channel with owning demand. Cutting wholesale to chase DTC margin looks smart on a spreadsheet, but shelf space doesn't sit empty waiting for you to come back - On and Hoka filled it in about a season. The performance-marketing mistake is the same shape: it looks like it's working right up until the brand equity it's spending down runs out. Distribution and brand equity are both accounts you can draw down. Nike drew down both at the same time.
I'm afraid the worst is yet to come.
It might get worse before it gets better... but in the long term I expect them to recover!
Thank’s for sharing. NKE has more than one problem: https://oakridgecapital.substack.com/p/nikes-986-million-windfall-saved?utm_source=share&utm_medium=android&r=8jjgxy