If i were Elliott Hill’s advisor, here’s what i’d do for Nike
I love Nike, who doesn’t?
Sure, some people prefer other brands that have emerged as strong competitors, but Nike has long been the pioneer of athletic footwear.
If you're a Nike fan, you’ve probably noticed some troubling news about the company lately.
Sales have declined year over year for the past three quarters across all regions.
Nike’s stock price plunged 20% in a single day after a rough June earnings call, wiping out $28 billion in shareholder value. By the end of 2024, the stock was down nearly 60% from its November 2021 peak.
Customers are shifting to competitors, and in July 2024, Nike laid off around 750 employees, including 32 vice presidents, 112 senior directors, and 174 directors.
It’s been a tough time for the company, and I imagine the new CEO is feeling immense pressure.
Now, put yourself in the CEO’s shoes, how would you handle these challenges?
As someone who loves the brand and wants to see it thrive even in tough times, I analyzed strategies Nike could implement to withstand fierce competition and reinforce its market position.
Some of these ideas may already be in motion, but with the right execution, they can make a significant impact.
1. Enhance membership benefits
Nike is facing aggressive competition from brands like:
Adidas
Puma
New Balance
Reebok
Under Armour
Fila
Kappa
Skechers
Asics
Lululemon
These brands are investing heavily, creating stiff competition. To stay ahead, Nike should strengthen its membership benefits, which would drive repeat purchases and attract new customers.
Think about how you’d feel if a membership program you belonged to suddenly offered even better perks, you’d be more likely to stay loyal, right?
Nike already has solid rewards and offers, but enhancing and personalizing them could directly boost sales.
One way to do this is by surveying members to understand what additional benefits they’d like to see.
Here are some potential survey questions:
What types of rewards or benefits would make your Nike membership more valuable to you? (e.g., discounts, exclusive products, early access, experiences, etc.)
How satisfied are you with the current Nike membership benefits, and what improvements would you suggest?
Would you be interested in personalized perks based on your purchase history and activity, such as custom discounts or VIP experiences? Why or why not?
Are there any brands or partnerships you’d like to see Nike collaborate with for exclusive member rewards? If so, which ones and why?
By leveraging customer feedback, Nike can develop unique, high-value membership perks that solidify customer loyalty and drive revenue growth.
2. Zoning China with a lean specialized local sales and marketing team
Nike’s declining sales and increasing customer churn in China pose a significant challenge, as China remains one of its key markets.
If Nike continues to lose ground, Adidas, which already has a strong presence in the region, stands to gain.
To counter this trend, I recommend that Nike’s CEO and President, Elliott Hill, establish a specialized marketing and sales task force dedicated to China.
This initiative, which I call "zoning," involves sending a team to China to strategically map out target areas, aggressively market the brand, and acquire new customers. While this approach requires significant investment, it has the potential to yield substantial returns.
Here’s how Nike can execute this strategy:
Form a lean, localized team, preferably composed of professionals from China who understand the market dynamics.
Identify key target areas for expansion and tailor marketing efforts accordingly.
Collaborate with local influencers to enhance brand visibility and credibility.
Partner with local radio stations and media outlets to strengthen brand awareness.
Localize product lines and campaigns to align with Chinese consumer preferences.
Strengthen digital presence by optimizing partnerships with Tmall, JD.com, and WeChat Mini Programs.
Engage local business leaders who can facilitate market penetration.
Analyze local competitors and develop strategies to outperform them.
Host weekly discussions on podcasts and radio stations to foster brand engagement.
Invest in community initiatives such as charity programs and local sporting events to build brand loyalty.
By implementing this localized marketing approach, Nike can regain its competitive edge, increase revenue, outpace both local and international rivals, and cultivate a strong brand presence in China.
3. Poach top talent from your strongest competitor
Employee poaching is a strategic move that, when executed effectively, can significantly impact an organization.
CEOs and leadership teams should analyze their fiercest competitors to identify key employees who can be recruited to help achieve company goals.
If you look at top companies, you’ll notice that many professionals have worked for competitors before joining their current roles—either through direct poaching or referrals.
A notable example is Sonny Vaccaro, Nike’s former marketing executive. Before leaving Nike, Vaccaro played a crucial role in signing Michael Jordan to a partnership when Jordan was just 19 years old.
Later, Vaccaro moved to Adidas, Nike’s direct competitor, where he secured an $18 million, five-year deal with 18-year-old Kobe Bryant in 1996, just before he entered the NBA from high school.
However, poaching comes with risks and should be handled with caution. The last thing you want is to recruit employees who steal company strategies and return to their former employer.
A real-world example is Rippling’s lawsuit against Deel, alleging corporate espionage and trade secret theft. You can read more about it here.
To mitigate risks, CEOs should consider the following before poaching talent:
Ensure the candidate is not bound by a non-compete agreement or other legal restrictions.
Assess whether the employee aligns with the company’s culture, values, and long-term strategy.
Weigh the impact of hiring this employee against potential backlash from the competitor.
Prepare for counteroffers and ensure the company’s offer is compelling enough for long-term retention.
Handle recruitment professionally to avoid reputational damage or industry conflicts, ensuring it doesn’t appear as corporate aggression.
Where Nike can poach talent
To strengthen its direct-to-consumer (DTC) strategy and community-driven brand approach, Nike could target key employees from:
Amazon (Fashion & AI Divisions) – To enhance Nike’s e-commerce and technological capabilities.
Lululemon – A leader in athleisure and community engagement strategies.
Strategic hiring from these companies would help Nike achieve its goals in DTC growth and brand positioning, particularly in the Chinese market.
Summary
There aren’t many strategies to consider, just three simple but powerful approaches that can elevate Nike’s brand, sales, and growth, even in challenging times.
They may have attempted some of these before, but likely not with full commitment.
If you analyze Nike’s slowing growth, you’ll see that the Chinese market plays a crucial role. That’s why Nike must take this market more seriously.
Final thoughts
These three strategies can propel Nike forward and help the CEO provide positive updates during all-hands meetings, perhaps even allowing for a better night’s sleep.
If you have any questions, feel free to leave them in the comments below.