Nike CEO John Donahue cut ties with retailers like Foot Locker in 2020 to push direct online sales, betting consumers wouldn't return to stores. When lockdowns ended, shoppers went back to physical retail anyway. Nike now calls it a billion-dollar mistake and is rebuilding those partnerships.
Nike made a huge mistake that today is costing them billions. And here's what they did wrong. It starts in 2020 when Nike cans their veteran CEO Mark Parker, and in comes John Donahue as the fourth ever CEO at Nike. And his background is totally different. He comes from tech. He kickstarts the area of e-commerce for Nike. They start selling directly to you instead of through big retail stores like Foot Locker. But sometimes things that look great on paper forget that people are involved in every aspect of business. And in this case, consumers like buying in different ways, not just Nike stores and not just through a Nike app. So things are looking great great, especially when COVID hits and everyone is shopping online. And along the way, Nike cuts ties with many of their longtime retail partners. Donahue is confident this is the future.
He says, the consumer today is digitally grounded, will not revert back.
But reality is that we can often see the future coming, but it's harder to predict when it will actually arrive. And in this case, Mr. Donahue was wrong. As soon as the lockdowns lifted, consumers returned to the shopping in store. And today Nike says, my bad, and is trying to build back those relationships.
