I recently wrote about the swift rise of ON running shoes in a market historically dominated by Nike and Adidas.
Today brings news that perfectly illustrates what I’ve been exploring about the power of being someone’s favorite brand — that quality that transforms a company from merely recognized to passionately championed.
Nike, the industry giant, is about to report its steepest revenue decline in five years.
The numbers are enough to give you a brain cramp:
- Mobile app downloads down 35%
- Foot traffic at Nike stores down 11%
- Retailers like Foot Locker warning of margin pressure from Nike discounts
- Overall revenue expected to fall 11.5% to $11.01 billion
What’s happening to Nike isn’t as simple as a poor quarter.
It’s the consequence of losing your position as someone’s favorite.
And then, many millions of “someones”.
For decades, Nike enjoyed the enviable status of being many athletes’ and sneakerheads’ absolute favorite brand — the one they’d eagerly recommend and defend.
People identified with Nike.
That passionate loyalty is fading. And in its place, smaller, more focused brands like ON, Saucony, and Salomon are creating devoted customer bases who aren’t only buying shoes but raving about them.
In I Need That, I discuss how products succeed when they trigger what I call “the flip” from want to need. Nike’s struggle illustrates what happens when that flip reverses — when a must-have brand becomes yet another ho-hum option.
As Morningstar analyst David Swartz put it, “It needs to create a whole new franchise, like a family of products that add billions in sales. That takes years.”
Swartz is right, but what he’s describing isn’t as simple as a product challenge. It’s going to mean somehow reclaiming that passionate devotion.
Can Nike once again become the favorite of enough customers to drive its massive business?
Product Payoff: TikTok became the fastest-growing social platform in history by creating what competitors couldn’t: an algorithm so addictively accurate that teenage users spent an average of 95 minutes daily on the app — nearly double Instagram’s usage. The secret wasn’t features (which competitors could copy) but building such deep understanding of user preferences that the app became many users’ favorite social experience. This is why Meta’s similar-looking Reels feature has failed to dethroned TikTok despite massive investment.
Action for today: Conduct an honest audit of your product experience. If you disappeared tomorrow, what percentage of your customers would actively seek out ways to replace you specifically (not just your category)? If that number isn’t at least 20%, you’re vulnerable to exactly the kind of decline Nike is experiencing.
Want to explore how to build genuine devotion for your product? Tap that spiffy reply arrow and let’s discuss creating experiences that transform customers into evangelists. Or reach out to my team of product strategy specialists at Graphos Product.