Posts tagged with "Nike"

Over and out: Nike to complete pilot with Amazon Retail; sell its own products directly

November 14, 2019

Nike is breaking up with Amazon, Bloomberg reports. The athletic shoe and apparel brand will stop selling its products directly through Amazon Retail—ending a pilot program that began in 2017.

The split reflects a massive pivot in Nike’s retail strategy. It also follows the hiring of ex-EBay Inc. Chief Executive Officer John Donahoe as the company’s next CEO, effective January 13, 2020—a move that signaled the company is going even more aggressively after e-commerce sales, apparently without Amazon’s help.

Indeed, the footwear titan says the move is just one piece of its plan to shift to a “more direct, personal” retail experience.

Specifically, the company said in a statement, “As part of Nike’s focus on elevating consumer experiences through more direct, personal relationships, we have made the decision to complete our current pilot with Amazon Retail. “We will continue to invest in strong, distinctive partnerships for Nike with other retailers and platforms to seamlessly serve our consumers globally.”

Nike said it will continue to use Amazon’s cloud-computing unit, Amazon Web Services, to power its apps and Nike.com services, Bloomberg reported.

Amazon, through a spokeswoman, declined to comment. The company has been preparing for the move, according to two people familiar with the matter. It has been recruiting third-party sellers with Nike products so that the merchandise is still widely available on the site, they said. Amazon has also been working to stem the flow of counterfeits on the site through various initiatives, including one project that lets brands put unique codes on their products to make it easier to identify fakes.

Nike shares rose as much as 1.4% in New York trading Wednesday, while Amazon was off as much as 0.6.

The question now, according to Bloomberg, is whether other Amazon partners follow Nike’s lead. The financial news outlet said, “Few other brands possess the kind of muscle Nike has, so it may be harder for them to leave.”

“Nike has enormous reach and its products are in demand, so it can afford to be selective about where its products are distributed because customers will come find Nike where it is offered,” Neil Saunders, managing director at GlobalData Retail, said in an interview. “I don’t think as many brands can be as selective as Nike.”

For years, the only Nike products sold on Amazon were gray-market items—and counterfeit—sold by others. Nike had little control over how they were listed, what information about the product was available and whether the products were even real.

That changed in 2017, when Nike joined Amazon’s brand registry program. Executives hoped the move would give them more control over Nike goods sold on the e-commerce site, more data on their customers, and added power to remove fake Nike listings. The news of the Amazon tie-up, which Nike executives called a “small pilot,” sent shoe-retailer stocks tumbling and left many wondering if other major Amazon holdouts would quickly follow.

But Nike reportedly struggled to control the Amazon marketplace. Third-party sellers whose listings were removed simply popped up under a different name. Plus, the official Nike products had fewer reviews and, therefore,received worse positioning on the site.

Analysts said physical sporting-goods retailers would benefit from Nike’s departure from Amazon.

Research contact: @business

Nike’s first sneaker club targets new customers while they are young

August 13, 2019

Does your child like sneakers that light up? Or roll? Or high tops? Or a special color? The experience of shoe-shopping for young kids can be complex. At first glance, it’s all about the child—but, as many parents quickly realize, it’s also about their own preferences for sizing, fit, support, and aesthetics.

The reasons why are universal: Kids’ feet are continually growing, and many kids can’t articulate what they want, even after shoebox after shoebox comes out of the back room. (The foot size issue isn’t helped by the fact that 60% of people, kids included, are walking around in the wrong-sized shoe at any given time.)

But now, Nike is offering a solution to parents and children alike: Nike Adventure Club, Nike’s first footwear subscription service for children.

Through the new club, Nike not only gets a loyal, young shopper who has many years of brand preference ahead of him or her; but also gets to make personal contact with the child and parents as often as 12 times a year. (The subscription service makes three tiers of service available, ranging from four pairs of sneakers a year to 12.)

Nike Adventure Club lets kids regularly swap Nike and Converse shoes for the right-fitting shoe as their feet—and tastes—evolve.

“In providing footwear, we’re always trying to answer, ‘What do kids want?’” says Dominique Shortell, director of Product Experience and Retention for Nike Adventure Club. “But an equally important question is, ‘What kind of experience are we providing for their parents?’ We want to make shopping for footwear as convenient as possible for them.”

Here’s how it works:

  • Nike Adventure Club serves kids who wear sizes 4C to 7Y. (That’s roughly from age two through ten.)
    • Choose from three tiers of subscription services, ranging from four pairs a year to 12 pairs a year. You’re free to upgrade, downgrade or pause your subscription at any time.
    • Choose from more than 100 different sneaker styles, ranging across the spectrum of performance and sportswear.
    • If you like the shoe, you can keep the pair. If you’re ready to replace it, send it back and Adventure Club will send the next pair of your choosing. Nike Adventure Club will either donate or recycle the returned sneaker.

“We see Nike Adventure Club sits as having a unique place within Nike, and not just for it being the first sneaker club for kids,” says Dave Cobban, VP of Nike Adventure Club. “It provides a wide range of options for kids, while at the same time, it removes a friction point for parents who are shopping on their behalf.”

In addition to shoes, the subscription service comes with exclusive adventure guides, filled with outdoor games and activities that parents can do with their kids. The guides are a collaborative partnership between Nike and KaBoom, a national nonprofit focused on encouraging kids to lead active, healthy lifestyles.

Activity guides lay out fun ways for kids to get moving.Nike Adventure Club fulfilled its first subscriptions beginning August 12.

Research contact: @NikeAdventure

Nike pulls ‘Betsy Ross Flag’ sneakers off shelves after Colin Kaepernick intervenes

July 3, 2019

Nike pulled its special, commemorative Fourth of July sneakers featuring a “Betsy Ross Flag” from store shelves this week after former San Francisco 49ers Quarterback Colin Kaepernick—best-known for taking a knee during the playing of the national anthem as a protest against police brutality—complained that the company shouldn’t use a colonial symbol that he and others see as offensive, The Wall Street Journal reported.

Kaepernick, who remains a national hero for his gesture, also has clout and leverage with Nike: He was named the new face of the sportswear and footwear firm’s “Just Do It” marketing campaign in February.

According to a report by Fortune, the Betsy Ross Flag design on the Air Max 1 USA was intended as a celebration of U.S. Independence Day—with a flag that featured 13 white stars in a circle on the heel. The design was created during the Revolutionary War.

“Nike has chosen not to release the Air Max 1 Quick Strike Fourth of July as it featured an old version of the American flag,” said Mark Rhodes, a spokesman for the company, in an email to the media on July 1.

Kaepernick contacted the company after the shoes were posted online, saying the flag is an offensive symbol because of its connection to an era of slavery, the newspaper said.

Research contact: @Nike

170 footwear firms, including Nike and Adidas, sign letter imploring Trump to halt tariffs

May 21, 2019

More than 170 footwear manufacturers, distributors, and retailers—including Nike, Under Armour, AdidasFoot LockerUgg and Off Broadway Shoe Warehouse—signed and delivered a letter to the White House on May 20, asking President Donald Trump to reconsider his decision to raise tariffs on footwear imported from China, CNBC reported.

The request comes after the White House last week released a new list of about $300 billion in Chinese goods that could get hit with 25% tariffs, if Trump decides to move forward. The list includes footwear, CNBC said— everything from sneakers to sandals, golf shoes, rain boots and ski shoes.

The Footwear Distributors and Retailers of America, a trade organization for the industry, has estimated the tariffs could cost shoe shoppers more than $7 billion each year.

“There should be no misunderstanding that U.S. consumers pay for tariffs on products that are imported,” the letter said. “As an industry that faces a $3 billion duty bill every year, we can assure you that any increase in the cost of importing shoes has a direct impact on the American footwear consumer. It is an unavoidable fact that as prices go up at the border due to transportation costs, labor rate increases, or additional duties, the consumer pays more for the product.”

Indeed, if the tariffs are enforced, the price of a pair of shoes could hurtle $15 to $20 higher. The shoe companies estimate that a popular type of canvas “skate” sneaker, currently retailing at $49.99, with a 25% tariff, could increase to $65.57. The price of a typical hunting boot would increase from $190 to $248.56. And a popular performance running shoe could jump from $150 to $206.25, FDRA said.

What’s worse, the shoe companies said, “High footwear tariff rates fall disproportionately on working class individuals and families. While U.S. tariffs on all consumer goods average just 1.9 %, they average 11.3% for footwear; and reach rates as high as 67.5%. Adding a 25% tax increase on top of these tariffs would mean some working American families could pay a nearly 100% duty on their shoes. This is unfathomable

The U.S. imported $11.4 billion worth of footwear from China last year, according to data from the U.S. Census Bureau, making it an industry that is strongly reliant on that country for its cheaper yet skilled labor.

The companies implored the president, “On behalf of our hundreds of millions of footwear consumers and hundreds of thousands of employees, we ask that you immediately stop this action to increase their tax burden. Your proposal to add tariffs on all imports from China is asking the American consumer to foot the bill. It is time to bring this trade war to an end.”

Research contact: @FDRA

Tiger Woods swings back with a Masters win

April 17, 2019

It’s been a long time since Tiger Woods last won a Masters tournament—14 years—but Americans love a comeback.

Branding experts say his single-stroke victory on the 18th green during the final round on April 14 at the Augusta National Golf Club in Georgia also shows that Woods, at 43, is still a winning investment for Nike and his other sponsors, NBC News reported.

Woods delivered $22.5 million in media exposure for Nike during the tournament on Sunday, according to Apex Marketing Group.

“He’s eclipsed what he provided Nike in brand exposure for the four majors last year with just this one major,” Apex President Eric Smallwood told the network news outlet. “He’s got that drive now and he’s playing the best golf he’s played in recent years. I think he’s going to continue to provide Nike with enhanced exposure because the TV is going to follow him.”

President Donald Trump announced in a tweet on April 15 that he would be awarding Woods the Presidential Medal of Freedom: “Spoke to @TigerWoods to congratulate him on the great victory he had in yesterday’s @TheMasters, & to inform him that because of his incredible Success & Comeback in Sports (Golf) and, more importantly, LIFE, I will be presenting him with the PRESIDENTIAL MEDAL OF FREEDOM!

Bob Dorfman, creative director at Baker Street Advertising in San Francisco told NBC News that Woods’ victory—especially if it is followed by future wins—could go a long way to helping him to re-engage the wide variety of brands he endorsed before a sex scandal and tabloid-ready divorce prompted brands like Gatorade, Accenture, and AT&T to drop him.

“It legitimizes him — there were certainly questions about whether he was still viable,” he said.

This is good news for sponsors seeking a return on their investment, and for Woods’ own bottom line. “I would not be surprised if, in the long run, this win yesterday at Augusta is worth $50 to $100 million in future benefits to Tiger. He will see revenue streams from this win for years to come,” said Rick Burton, the David Falk professor of sport management at Syracuse University.

Research contact: @NBCNews

MLB uniforms and footwear will feature the Nike Swoosh starting in 2020

January 28, 2019

Major League Baseball, Nike and Fanatics have announced a new ten-year global partnership that makes Nike the official uniform and footwear supplier of MLB starting in the 2020 season.

The new cooperation among the three organizations will provide Major League Baseball players with on-field uniforms developed by Nike’s team of designers and will provide fans with the widest assortment of MLB fan gear ever, manufactured and distributed by Fanatics.

Starting in 2020, on-field uniforms will feature the Nike Swoosh, along with base-layer, game-day outerwear and all training apparel for the 30 MLB clubs.

Fanatics has been granted broad consumer product licensing rights to manage the manufacturing and distribution of the Nike MLB Authentic Collection, as well as Nike and Fanatics fan gear, sold through the retail community, including MLBShop.com, MLB clubs and brick & mortar stores.

Enhancing both assortment and speed-to-market of MLB products, Fanatics will use its vertical commerce model to create and distribute a wide range of MLB fan apparel sold at retail, including jerseys, Postseason apparel, and hot market gear that captures the latest events happening on the field.

“Nike’s global brand and reputation as a leader in marketing and driving innovation makes them an ideal partner,” said Baseball Commissioner Robert D. Manfred, Jr. “In addition, Fanatics is a valuable partner [that] has proven to serve our fans with speed, agility and quality service. We’re very excited about the possibilities this unique arrangement provides us over the next decade.”

In addition, Nike will continue as an official MLB sponsor, supporting league initiatives, grassroots marketing and fan events. Nike, as part of the new agreement, will partner with all 30 MLB Clubs and promote its brand and products across MLB media assets including MLB Network, MLB.com, and MLB Social.

Nike currently has endorsement relationships with over 500 MLB and Minor League players including Mike Trout, Giancarlo Stanton, George Springer, José Ramirez, Max Scherzer, Jacob deGrom, Javier Báez and Nolan Arenado to name a few.

“We’re thrilled to bring more innovation and creativity to Major League Baseball and the incredible athletes who play the game,” said Tom Peddie, VP/GM of Nike North America. “This is an exciting time for baseball, and we look forward to partnering with MLB to grow the sport both across America as well as around the globe”

“Given the continued rise in real-time demand by both fans and retailers, this three-way partnership will ensure MLB fans always have access to the products they crave regardless how, where or when they want to shop,” said Fanatics Founder and Executive Chairman Michael Rubin. “This progressive approach around joining forces between an elite performance brand and the innovative vertical capabilities of Fanatics continues to be the future model for licensed sports merchandise.”

Research contact: @MLB

Nike ‘just does it,’ giving 10% of employees raises

July 25, 2018

Athletic footwear and apparel giant Nike intends to raise salaries for more than 7,000 employees and change how it awards annual bonuses to its global staff in an attempt to address concerns about pay equity and corporate culture, CNBC reported on July 23.

The company decided to overhaul its compensation practices after conducting an internal review of its pay practices earlier this year, the business news network said. Nike said about 10% of its employees—both men and women—will receive adjustments to their pay to ensure equal and competitive compensation for the same job functions around the world, according to an internal memo reviewed by CNBC. The company has about 74,000 employees worldwide.

“With movement of internal talent, and the demands of a dynamic market, we analyze pay each year. This year, we have conducted a deeper analysis of all roles, at all levels globally,” the memo said. The company said its benefits program is designed to “support a culture in which employees feel included and empowered.”

The company said bonuses now will be based on company-wide performance instead of a combination that also included team and individual performance, beginning in fiscal year 2019.

Like several other U.S. companies, Nike got caught in its own #MeToo movement this spring after a group of women circulated an informal survey that examined disparities in pay and advancement at the Oregon-based company. Several senior male employees resigned. In May, Nike CEO Mark Parker apologized to employees for cultivating a corporate culture that excluded some of its employees and did not take complaints about conduct seriously.

Changes to compensation are just the latest attempt from Nike to improve its corporate culture for women. Nike appointed Amy Montagne as vice president and general manager of Global Categories and Kellie Leonard as its new chief of Diversity and Inclusion. Hilary Krane already is on the list of the company’s top executives as EVP, Chief Administrative Officer and General Counsel.

Research contact:  @laurenthomasx3