Nike went back to sport, and back to the shops it had left

In 2020, under chief executive John Donahoe, Nike accelerated a strategy it had begun a few years earlier: sell more through its own stores, website and apps, and less through other retailers. It cut its wholesale accounts sharply, reorganised its teams around consumer groups (men, women, kids) in place of sports, and leaned heavily on a few big franchises such as the Air Force 1, the Dunk and the Jordan retro models. For a while, with shops closed and buyers online, the numbers supported the move.

By 2024 they no longer did. Online growth slowed, the big franchises were discounted to clear stock, and running brands such as Hoka and On had won shelf space and attention in the specialist shops Nike had stepped back from. Analysts and the press asked where the next innovations were. In June 2024 a weak outlook sent the shares down by roughly a fifth in a single day. In September Nike named Elliott Hill, a long-time executive who had retired in 2020, as its next chief executive, and he took over in October 2024. His plan put sport back at the centre, organised teams around sports again and rebuilt relations with retailers. For the year to May 2026 Nike reported wholesale revenue rising and its direct business shrinking, with total sales roughly flat, and Hill said the turnaround was taking longer than he would like. The story is still moving.

A channel is part of what you sell

In the formula we use, the value proposition is the product of channels, core values and the promise, with the USP added on top. The multiplication is deliberate: if any factor drops towards zero, so does the whole. A strong brand with a strong promise, placed in the wrong channels, is worth far less than its parts suggest.

Nike’s direct strategy treated channels as a question of margin and customer data, and both arguments had merit. The cost appeared where the spreadsheet did not look. A specialist running shop does more than hand over a box: someone watches you run, suggests a model, and lets you try three brands side by side. That is a proof channel, where a performance claim is tested in front of the customer. Step away from it and another brand’s proof takes the place yours used to hold.

Three roles on one map

We sort channels by the role each one plays: conquest, which reaches new people; proof, which shows that the promise holds; and belonging, which gives existing customers a place inside the brand. Nike’s app and stores were very good at belonging, and its advertising kept doing conquest. The proof role had moved, in large part, to shelves where Nike no longer stood and where younger brands were glad to stand. Owning your channels is valuable. Walking away from the ones you do not own has a price that tends to show up a few seasons later, in someone else’s results.

Back to the premise

The premise states who a promise is for. Nike’s has always been the athlete, widened by Bill Bowerman’s line that if you have a body, you are an athlete. Reorganising the company around consumer segments made sense on a planning chart, and it also loosened the tie between each product and a sport, the source of Nike’s innovation and credibility. A shoe built for a segment tends to compete on style, and runners judge a running shoe by what it does for them on the road.

From outside, Hill’s return to sport reads as a return to that premise. The test is whether new products in running, basketball and football give it fresh proof, since a premise needs products that keep it true.

Where the pendulum stops

Swings like this tend to overshoot in both directions, from wholesale to direct and back again. The useful outcome for Nike is a channel map where each channel has a clear role, and where the decision about where to sell is taken together with the decision about what to promise.

When the channel plan is written by finance and the promise by marketing, the two drift apart without anyone deciding it. Train your team to read them as one equation before the next swing.