As a longtime runner and Nike devotee, I recently found myself with an unexpected dilemma. While shopping for new running shoes prior to a business trip, I was drawn to a pair made by On Running instead of my usual Nikes. I loved my ON Clouds, and the salesperson talked about the running shoe’s performance and versatility. I could wear them for my morning jogs as I enjoyed the local environs and then don them again for afternoon meetings or even dinner. They were both comfortable and good looking, saving me the need to pack an extra pair of shoes, and possibly having to check luggage (please, no!).

​

I share this personal experience to spotlight the severe challenge facing Nike, one of the world’s most iconic brands. In a terrible earnings report at the end of June, Nike showed an estimated $28 million loss in market value, slashed its sales projections by ten percent and, subsequently, saw its stock price hit a new 52-week low. As Wall Street pundits might say, this downfall was slow, and then quite sudden. What happened?

​

From my perspective as brand expert, not a runner, the reason Nike got into trouble wasn’t because their products performed less well. It was not that their classic playbook of connecting with high profile athletes across various sports failed. It’s not that the familiar “swoosh” wasn’t visible at every touchpoint. Nike’s branding has been consistent and very, very strong for years. The reason Nike is in a fix has nothing to do with its branding – the visual and messaging elements that identify and distinguish the brand. Nike is in a slump because its brand story, the overarching narrative that explains why it exists, is no longer relevant relative to the experience of how and why today’s consumers are buying sneakers.

​

As a result, Nike is giving up critical market share, not just to upstarts like On Running, but to traditional competitors like Adidas, brands in sync with what consumers now want and need from their leisure footwear. Nike’s brand story, based on making incredible performance sneakers enabling anyone to perform like an athlete, is not the plotline consumers are now looking for. People, young and older, want a more distinctive look when it comes to design, something both fashion-forward and all-day useful. Sneakers that look and feel great, and are good for any number of occasions. Today’s consumers want a product story that reflects an understanding of their current lifestyles. A long and dedicated brand loyalist who’s gone rogue, I’m a perfect example of the problem Nike is having. Multiply that by millions.

​

I’m not alone in this assessment of how Nike found itself in this sticky wicket. A fellow brand expert and my colleague at New York University’s Stern School of Business, Scott Galloway, pointed this out on his recent podcast, Prof G Markets. “Nike has extraordinary talent and remains one of the strongest brands over the past 30 years,” he began. Yet, he noted the company has struggled to maintain the same level of innovation and excitement in its brand story. Competitors like HOKA and ONS (which Galloway quickly volunteered he also wears), have captured the market by offering narratives more closely aligned with consumer needs. Nike’s CEO, John Donahoe, brought in to digitize the company and improve supply chains, has, Galloway said, “inadvertently neglected the brand,” focusing on technology at the expense of evolving the brand story. Galloway went so far as to predict that as a result of Nike’s recent dismal Wall Street performance, the company may well be “dinner for an activist.”

​

As both Scott and I agree, as would most other marketing professionals, Nike is an amazing brand, with an outstanding track record. It has fallen off its track, not because of its branding, but because of its brand story. The company needs to recraft its story. It needs to focus on a plotline that goes beyond athletic performance, emphasizing how the inventive nature of its products – the innovation at the core of its DNA – works to enhance aspects of daily life beyond sports. It must show how and why the experience of its offerings are relevant to a wider audience, once again differentiating its brand within the growing category. Only by evolving its narrative while staying true to its core values can Nike hope to reclaim its once undisputed place as a leader in its industry. Dare I say it? Sure. Now, they need to “Just Do It.”

​

As seen in Advertising Week