The CEO led on a high-level observation. “We lost our obsession with sport,” he told investors. This informs Nike’s strategy henceforth. “Moving forward, we will lead with sport and put the athlete at the centre of every decision,” Hill said. “The sharpness in each sport is what differentiates our brand and our business and fuels our culture.”
Near-term action: “We’re gonna move fast”
On the call, Hill outlined his near-term plan to get Nike back on track.
Ignite culture through a focus on obsessing over sport and getting back to winning
This is a direct response to Hill’s key observation of Nike’s loss of obsession. “With sports as our North Star, we will re-energise our culture and identity,” he said. This first step – which includes clearing out the marketplace of products that don’t fit the bill – lays the groundwork for his more specific agenda items.
Accelerate a complete product portfolio
Nike is shifting into sport-led teams segmented by men’s, women’s and kids. The brand dubs each of them “fields of play”, which Hill characterised as a “segment to grow” approach. “We will do this by empowering more nimble cross-functional teams to assess the needs of sports-specific athletes by gender,” he said. Hill’s time at Nike previously was characterised by disciplined franchise management, he said — the goal is to get back to this.
This approach will be driven by athlete insights, Hill added. “We will get back to leveraging deep athlete insights to accelerate innovation, design, product creation and storytelling.” Hill is optimistic about the innovation across Nike’s field of play in the next several seasons, especially in high-volume areas like running, training, sportswear and the Jordan brand.
Increase investment in the Nike brand to deliver bold marketing statements
The goal is to balance major global marketing moments and day-to-day efforts in local communities. “To do that, we’re going to be much more intentional about investing to move the brand forward,” Hill said.
He highlighted key moments from Nike’s last quarter, including the New York Liberty winning the WNBA championship and city takeovers for the Berlin, Shanghai, New York City and Chicago marathons. In the last 60 days, Nike announced the re-signing of the NBA and WNBA; Brazil Football Federation; FC Barcelona; and, just last week, the NFL. Hill called the organisations’ athletes “the creative fuel for our brand”. Hill also highlighted the importance of showing up in communities that run, train and compete at the local level. “It’s about showing up and building relationships every day with athletes and influencers,” he said.
Invest in and empower teams in key countries and cities
Referencing his years working in as president of geographies for Nike, Hill flagged the need to invest in specific regions. “We will resource our key country and key city teams to create stronger consumer connections, build relationships with athletes, influencers and partners, and unlock incremental growth for our brand and business,” he said. Of Nike’s 12 key cities across 10 key countries (New York, London, Shanghai, Beijing, Los Angeles, Tokyo, Paris, Berlin, Mexico City, Barcelona, Seoul and Milan), it will start with three key countries and five cities, Hill said. (He didn’t specify which on the call.)
Elevate the marketplace
Prioritising Nike’s digital revenue has negatively impacted marketplace health, Hill acknowledged, driving competition with wholesale partners instead of collaboration. Traffic has softened due to lack of newness in product and inspiring stories, driving Nike to become overly promotional, Hill said. “The level of markdowns not only impacts our brand, but it disrupts the overall marketplace and the profitability of our partners,” he said.
