Casual Runners Are Racing Away From Nike and Toward Competitors — Here's Why CEO John Donahoe admitted the company is "struggling to connect with everyday runners."
By Amanda Breen •
Key Takeaways
- Nike's dip in popularity among casual runners could be due, in part, to the direct selling strategy it rolled out in 2017.
- The company is also grappling with a talent exodus, which began with a 1,400-person layoff several years ago.
Some of the highest-paid athletes in the world sport Nike sneakers thanks to the brand's extensive endorsement commitments.
That includes professional runners: On Sunday, 23-year-old Kelvin Kiptum ran the Chicago Marathon in a pair of unreleased Nike Alphafly 3 sneakers — and set a men's world record at two hours and 35 seconds.
But casual runners are racing the other way — and toward the company's competitors — for several reasons, OregonLive/The Oregonian reported.
Related: 4 Branding Lessons From Nike's Colin Kaepernick Ad | Entrepreneur
CEO John Donahoe admitted the company is "struggling to connect with everyday runners" on a September earnings call, and analysts told the outlet it could be tied to Nike's emphasis on direct sales and a talent exodus.
Nike's "Consumer Direct Offense" strategy, announced in June 2017, paid off big time — in the beginning. Within a couple of years, the company's stock climbed more than 73% with $10.7 billion in quarterly revenue, Footwear News reported.
But Nike's absence in many brick-and-mortar stores is a problem now.
"In running specialty, Nike's not the boss," Sean Rivers, owner of the Portland running retailer Foot Traffic, which has a Nike account but no longer sells the brand, told OregonLive/The Oregonian. "Brooks and Hoka are running the show."
Nike also cut 2% of its workforce — roughly 1,400 jobs across the globe — as it ramped up its direct selling, CNN Business reported, and laid off 700 workers, including those with decades of experience, in 2020, per OregonLive/The Oregonian.
Related: Toxic Culture for Women at Nike Revealed | Entrepreneur
Nike Inc is up more than 14% year over year. The company reported 10% growth for the year in June but no longer publicly reports sales for its running division, a $4 billion wholesale business as of 2021, per the outlet.
