Can These Shoes Reverse The Decline Of Nike?

In order to reverse the declining trend of Adidas, athletes professionalism has been upholding in the past.

Also began to bow to the stars and explosions.

According to the world clothing and shoe net, although this year is a tough year for Nike (NYSE:NKE), but Morgan Jay analyst Jay Sole believes that sales of Nike will rise in the coming months. He has upgraded the rating of Nike from holding to wait-and-see, predicting that the earnings of Nike shares will expand and share prices will rise at most 20%.

Jay Sole analysis said that the key driving force for the rise of Nike stocks was the new Air VaporMax, which was launched in March this year. The new shoe is expected to bring up to US $1 billion in sales for Nike.

He thinks that the new products released by Nike and the improvement of Nike market ability are faster than expected, which will reverse the decline experienced in the past 18 months.

Over the past year, the media has constantly reported that Nike market share is constantly suffering from the German brand.

Despite the fact that the latter is still at a distance from Nike, its rapid growth can not be ignored by the market, which is also a great pressure on Nike.

Adidas with Star Marketing and "little white shoes" quickly conquered the appearance.

Nike, which is deeply influenced by social media, has been criticized for being too complacent, overemphasizing functionality and ignoring design innovation. The last popular Flyknit has been launched for some time.

Now Nike finally has a pair of Adidas Ultra Boost and Stan Smith to contend with the "explosion" Air VaporMax.

However, it is worth noting that this shoe from design to marketing reflects Nike's completely different logic from the past.

To celebrate the birth of classic shoe Air Max 1, Nike launched the new Air Vapormax in Air Max Day in March 26th this year, and the theme of Air Max Day this year is named "Air". "Nike"

This shoe has a strong conceptual design only from its design. The upper part of the shoe is still woven with Flyknit technology. The pparent air cushion groove of the sole is very avant-garde, and the new air cushion is adopted in the function, which is gentle and light.

It is easy to see the market expectations of Nike for this pair of shoes, in line with the popular slogan of "stepping the air under the feet".

In order to catch up with the younger generation of consumers and cater to the consumer preferences of the current young consumers who like the visual impact products, Nike finally realizes the importance of fashion, so the first improvement is the product shape.

This is only the first step, followed by the carpet bombing marketing offensive.

Always repel the star strategy and insist on using Nike as an endorser.

On March 26th, at the Air Max Day celebration party held at the 800 Show in Shanghai, the national youth idol star Li Yuchun was invited to perform live performances. She also planned to shoot a "Kiss My Airs" publicity video. Data showed that the video was broadcast 8 million times within two days after the release of Nike official micro-blog.

Becoming Ruby Rose of Air VaporMax advertising image

Adrianne Ho uploads pictures of Air VaporMax on Instagram.

In addition, Quan Zhilong, Li Yuchun, Joey Yung, Hilary Tsui and model Ruby Rose also become the advertising image of Air VaporMax, frequently appearing in the public communication space such as subway advertising.

Then, Instagram and other social media appeared a number of new KOL models, such as the new model Adrianne Ho. They spread the photos of Air VaporMax to the social media, and used their social influence to make the new shoes unsold.

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At the same time, Nike also released a joint venture with Wakubo Rei's personal brand Comme des Garcons and NikeLab.

The joint series of Air VaporMax and Edison Chan trend CLOT is also on sale.

NikeLab Air VaporMax x Comme des Garcons

This marketing strategy is exactly the same as that of Stan Smith.

Earlier, Adidas used the star effect to spread in social media, collaborated with celebrities such as A$AP Rocky and Alexander Wang, publicized Stan Smith shoes, and made a two minute network video specially for the shoes, pushing Stan Smith to its peak.

Adidas also invited singer Pharrell Williams to hand draw 10 Limited Edition Stan Smith on sale at the famous buyer shop Colette in Paris.

It is worth noting that Air VaporMax has also adopted the same hunger marketing method as Adidas.

A lot of consumers reflected that after the first sale, the new Air VaporMax shoes were hard to find. Only more and more KOL on social media were seen wearing new shoes, but they could not buy them.

This reminds me of the marketing strategy of Adidas Stan Smith.

Looking back in 2012, Adidas first used hunger marketing strategy to withdraw all the Stan Smith on the market back to the warehouse, reducing the supply and causing consumers' concern. By the middle of 2013, Stan Smith was almost impossible to buy on the market. Many fans wrote letters and protested strongly, demanding Adidas to re sell Stan Smith.

According to the data, under the careful planning of Adidas, the total sales volume of Stan Smith shoes is much higher than that of other shoe groups of the group.

Nike chairman and CEO Mark Parker also pointed out recently that about 75% of the sales growth of Nike now comes from Nike Style. Reducing the shipment volume of this category 25% is conducive to stimulating consumers' desire to buy products.

The analysis commented that this means that Nike will follow the successful hunger marketing strategy of Adidas last year.

However, after 4 months, Air VaporMax is no longer available for shoes, and Nike, Tmall's official flagship store and other channels have been able to purchase normally, with sufficient market supply and stable price at around 1600 yuan.

From the visual impact of the shape, star effect, social media marketing, to hunger marketing, "burst money" has been completed, Nike has finally begun to bow to celebrities and explosions.

Behind this is the increasing market pressure of Nike.

According to YAHOO's May footwear market share data, Adidas's share of the American sports shoes market jumped from 6.3% last year to 11.3%, pushing Jordan Brand to 11.8%.

Although Nike's market share is still in the lead, it has been on a downward trend, from 35.9% last year to 34.7%.

The share of other major sports brands Skechers, New Balance, Converse and Under Armour in the American sports shoes market is 6.3%, 3.7%, 3.6% and 2.4% respectively.

According to NPD, a market research firm, sales of Adidas and Nike outside the US have been neck and neck.

C dric Rossi, an analyst at Garnier Bryan investment bank, also pointed out that the pace of development of Adidas is accelerating, and gradually approaching the position of the Nike sports industry hegemony.

Last year, excluding the exchange rate factor, Adidas's global sales revenue increased by 18%, and net profit exceeded 1 billion euros, setting a new historical record.

Sales in Greater China increased by 28%, becoming the fastest growing market in Adidas.

Since last year, adidas has been far ahead of Nike in terms of sales and profit growth, brand exposure and share price performance. It is known that Adidas was the worst performing brand in 2014.

Data show that in the past year alone, adidas has sold 8 million pairs of Stan Smith and 15 million double Super Star.

Over the past year, analysts have warned Nike to be vigilant. After all, adidas has increased its market share by only 6% in one year.

In April, Adidas's share of the American sports shoes market recorded a record 13%, exceeding Jordan Brand for the first time.

In December last year, Nike chairman and chief executive officer Mark Parker also admitted for the first time that the group felt the competitive pressure of rival Adidas and Under Armour and will continue to do so. However, he reiterated that the group revenue target before 2020 would increase to $50 billion.

Now, Nike has realized the seriousness of the problem. To reverse the unfavorable situation, this year Nike continues to move.

As the performance growth continued to slow down, Nike 6 released the latest restructuring plan, "Consumer Direct Offense", which will carry out a structural pformation within the world. About 2% or 1400 employees in the world are facing dismissal, but the group has not disclosed the number of layoffs in various regions.

According to the latest statistics from Nike, the total number of employees is 77 thousand.

The reorganization is mainly divided into 3 parts: first, increase the number of direct outlets, reduce the number of third party distributors; secondly, simplify the regional structure from the original 6 to 4 sectors, namely, North America, Europe, Middle East and Africa (EMEA), Greater China, and Asia Pacific and Latin America (APLA). Each business department has only one vice president to reduce the number of vice presidents. Third, streamline products and shorten the production cycle. Nike will reduce 25% shoe styles and focus on developing ZoomX, Air VaporMax and Nike React. With the help of technological innovation such as intelligent production and 3D printing, the production cycle of Nike is expected to be shortened from 18 months to 4 months.

According to Morgan Stanley, the production cost can be saved up to 10%.

Nike President Trevor Edwards said that in today's highly competitive market environment, Nike as a leader in the industry must become faster and more flexible. After adjustment, the efficiency of the group's operations will be greatly improved. The ultimate goal of the reorganization is to fill the Nike with innovative and creative products faster and more directly to consumers.

Nike also listed 12 cities such as New York, London, Shanghai, Tokyo and Paris as its core market. By 2020, sales of these cities and regions will account for more than 80% of the total sales growth of Nike.

At the same time, combined with the advantages of online and offline, the implementation of full channel marketing mode is also an important step in Nike's restructuring, aiming to further improve the consumer's buying experience.

Mark Parker points out that the future product design and creativity of Nike will be based on the consumer big data gathered to better respond to the changing consumer preferences and needs.

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Nike's latest action to strengthen the online offensive is to announce the entry of the global electricity supplier giant Amazon to stimulate sales growth and better clean up unmarketable stocks. At present, Nike chose to enter Tmall mall in Alibaba in China. In Europe, it chose Germany's largest e-commerce platform Zalando, plus the brand self run official website. The total annual sales volume of Nike's electricity business has reached 2 billion US dollars.

If Nike can sell directly on Amazon, the annual sales volume is expected to increase by 300 million to 500 million US dollars, making the competition for sports goods more intense, Goldman Sachs analysts said.

According to Bloomberg data, consumers purchase 55% of their links from Amazon when searching for products.

At present, Amazon has taken 34% of the US Internet retail market share, and the analysis predicts that its market share will expand to 50% by 2021.

However, in the Nike and Amazon cooperation, Amazon needs to develop more stringent anti counterfeit measures and control the number of similar dealers on the website. Nike hopes to improve the experience of Amazon Nike consumers, and will continuously evaluate the role of Amazon platform.

To better integrate into social media, Nike also plans to sell products directly through Instagram.

At present, the reform of Nike seems to have achieved initial success.

According to the 2017 financial year report released by Nike group in June, profits in the fourth quarter increased 19% to 1 billion 10 million US dollars over the same period, exceeding analysts' expectations, and sales increased by 5% to 8 billion 630 million US dollars, the growth rate slowed down compared with the same period last year, and the growth rate was 6% in the same period last year.

Among them, Nike group's Converse performance increased by more than the core brand Nike, Converse sales increased 10% to 554 million dollars, Nike brand sales increased 7% to 8 billion 100 million dollars.

In the 12 months ended May 31st, Nike Group sales increased 6% to 34 billion 400 million US dollars compared with the same period last year, net profit rose 13% to 4 billion 200 million US dollars, Nike brand sales increased 8% to 32 billion 200 million US dollars, and the gross profit margin of the group fell further by 160 percentage points to 44.6%. Some analysts pointed out that this meant that Nike launched more discounts in the period to stimulate sales growth.

But Nike's performance in the core market has not improved, and the US market is the key to the future competition between Adidas and Nike.

Adidas has begun to exert its strength in the US market. The group CEO Kasper Rorsted also said that Adidas's brand loyalty in the US market needs to be improved. It will increase investment in the US market, improve the speed of the supply chain, and expect to sell more full price products.

As the golden age of Stan Smith is declining, Adidas is also looking for the next "Stan Smith" to continue to make the brand a profit engine.

With the constant provocation of Adidas, Nike and other sports brands finally move towards a similar development path with Adidas.

The sports brand Under Armour, founded in 1996, originally focused on sweaty clothing worn by football players. The product gene is functional. Until now, most of its products are still functional and inconsistent with the trend that sportswear is becoming casual.

Chen Grazutis, an analyst at Bloomberg think tank, believes that Under Armour has fallen into a passive situation when the market trend has shifted from functional to fashionable.

However, Puma, which originally turned to rely on the star effect, is now committed to regain its competitive advantage and reputation in the professional sports areas such as running shoes, so as to seize the market share of competitors such as New Balance and Under Armour.

According to the analysis, under the influence of Rihanna and sprinter champion Usain Bolt, Puma has gained more and more consumers' attention and love in sports and fashion.

However, some people think that Puma, which starts with sports equipment, has to rely on fashion elements to get rid of the dilemma.

Now, Puma has begun to realize this problem and has begun to lay emphasis on the professional sports market. Currently, the sponsoring competition team involves running, football, golf and even racing.

Therefore, following the trend is a risky move. If you are careless, you will be completely abandoned by the loyal customer of the brand.

An important fact is that the brand that has lost the core soul will be more easily replaced in the increasingly fierce competition.

Some analysts have pointed out to reporters that marketing is easy to imitate, but brand genes are not easy to establish.

Nike now bow to celebrities and explosions, just to prove that Nike now deviates from its brand genes and begins to lose patience to run brand culture and become a brand that relies on marketing, celebrities and explosions as Adidas.

Nike has followed Adidas's way of putting itself into the same starting line as other brands, instead, it provides a new opportunity for new sports brands to enter the market.

For some people, Nike, which has become a popular culture, is not cool. Consumers who attract customers through celebrity marketing may not become a loyal fan of Nike, and the loyal customers will continue to drain away.

Behind a pair of Air VaporMax is the change in the logic of Nike products, where it can take Nike to where, and it is not yet able to make a firm conclusion.

However, people should be alert to the fact that when the explosive money has been carefully manufactured, the explosive payment mode has become a replicable success, but the easier it is to copy, the easier it is to be replaced.

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