What Is The Purpose Of Nike's New Shoe Listing For 5 Months And 72% Off Sales?

Around March 1st, Nike launched a promotional event on the theme of "International Women's Day" at a Nike discount store in Qingdao, Shandong.

According to the notice of the discount store, Nike took the sales promotion method of "30 percent off discount".

Some of the running shoes originally priced at about 1000 yuan have even dropped to below 300 yuan.

"The intensity of Nike's reduction is very rare, and it even makes me feel weird."

Li Hua, a staff member of the Nike discount store, has expressed his interest in lazy bear sports.

Through the lazy bear sports survey, Nike's discount activity is not a single store behavior, but a large-scale sales promotion covering many parts of the country.

Apart from Qingdao, Shandong, Nike has conducted similar promotions in many discount stores in Guangdong, Shenzhen, Shanxi Taiyuan, Sichuan Chengdu and Mianyang.

The most popular product categories are running shoes.

According to the information provided by many shoe vendors, EpicReact Flyknit (selling price is 1299 yuan), Odyssey React (selling price is 969 yuan), Air ZM Pegasus 35 Shield (selling price 999 yuan), Air Zoom Pegasus 35 (selling price 899 yuan) and other running shoes discount sales at discount stores range from 72% off to 60 percent off.

Take the Air ZM Pegasus 35 Shield, which was launched in October 2018, for example, the price in the discount store is 399 yuan, and after the "discount 30 percent off", the price is 279 yuan.

It is worth noting that the most discounted running shoes are not the old ones. There are Epic React Flyknit that has just been on the market for about a year, and even Air ZM Pegasus 35 Shield has been listed for only 5 months.

"Nike usually carries out two large-scale clearance activities in the summer and the end of the year, but this big discount on women's Day is not like the usual regular clearance."

Li Hua told lazy bear sports, "and in the past, Nike's activities of" folding up and folding up "generally did not exceed 20 percent off, and most of the products that enjoyed discounts were female products.

Such a big promotional effort has also led to many shoe vendors across the country competing for goods at Nike discount stores around the country.

According to lazy bear sports, many shoe vendors recently "stationed" in discount stores, through friends circle, cargo group, leisure fish and other online channels point to point markup sales, different shoes, the retail price increase range from 30 yuan to 100 yuan or so.

Some shoe dealers told lazy bear sports that because they heard the news too late, they went to the discount store on the second day and found that "those running shoes with great discount" had been swept away.

At a Nike discount store in Shenzhen, shoe vendors clashed and even fought for shoes.

There are also some big sellers on Taobao who sell sweeps at discount stores.

Taobao sellers usually have a larger volume of goods, less than a dozen pairs, and more than 100 pairs.

Compared to WeChat's point to point direct sales of shoe vendors, Taobao sellers usually increase slightly.

Take the Air ZM Pegasus 35 Shield as an example again, as of Taobao's search results, the top three sellers of the search results were priced at 369 yuan, 399 yuan and 499 yuan respectively.

Although it is not clear that the promotion of Nike is to take the initiative to test the market at a low price or merely to reduce stock prices, it is likely to bring some volatility to the current Chinese running shoes market.

In recent years, the running market has become a battleground for all major sports brands.

Since the beginning of 2012, Adidas has gained a high growth in the market of running shoes with the technology of Boost.

From 2013 to 2018, Adidas's share of the American running shoes market rose from 2% to 9%, with a cumulative growth rate of 350%, according to data released by John Kernan, an American investment bank Cowen, who is responsible for providing financial analysis services to Adidas. From 2013 to 2018,

Take Ultra Boost, a running shoe equipped with Boost technology as an example. The price of the shoe used on the second-hand shoe trading platform has remained high.

According to Kiernan, from the profit margin alone, Ultra Boost running shoes are several times higher than other Adidas running shoes (several hundred percent more).

Inspired by the success story of Adidas on running shoes, more and more sports brands began to make an essay on the midsole cushioning foam.

Since then, the new midstream materials include: HOVR of andmar, Puma's Hybrid, Reebok's Floatride Foam, New Balance Fresh Foam, Anta's A-Flashfoam, Drive Foam of Lining and PEAK's "state pole" and so on.

Nike has been holding a variety of heavyweight technologies in mid bottom cushioning materials, but in view of the strong competition of Adidas in recent years, Nike must also take corresponding countermeasures to respond.

So, in June 2017, Nike launched the latest midsole technology Nike React, and in February 2018 released the first application of Nike React midsole running shoes Epic React Flyknit.

At that time, Nike CEO Mark Parker had high hopes for Nike React Technology: "when we enter the summer, Nike React will expand rapidly in every important price range, becoming Nike's next one billion dollar level performance platform."

Extended reading: Nike wants Nike React to become the next one billion level business. What kind of story will they tell this time?

However, Epic React Flyknit, the $1299 running shoes, was sold for 1 years or so, and was held in the discount army with a discount of less than 60 percent off.

"Nike has released a lot of new products in recent years, but it has failed to create a full" explosion fund ".

One industry analyst told loo bear sports that "in order to continue to grow, Nike's practice is to repeatedly sell the classic section, and on the other hand, it will be able to withdraw funds through a larger discount sale."

Nike's earnings data show that from May 31, 2013 to November 30, 2018, Nike's total global stock reached 5 billion 388 million US dollars, up 56.9%.

Although inventory is the industry characteristics embodied in the marketing process of footwear and other seasonal goods, the rising global stock will still bring some pressure to inventory for Nike.

In recent years, Chinese brands have been trying to launch high-end products in the running shoes market, exploring the price space, while the promotional activities of brands such as Nike and Adidas are also eroding the low price market dominated by domestic brands.

As mentioned earlier, domestic brands have launched their own product line while launching new midsole technology.

For example: 361 degrees SPIRE, SENSATION series, Lining's "chase wind" series, Anta's C202 series and so on, the price range is between 548 and 1499 yuan.

Another major Chinese sports brand, XTEP, also announced in March 4th that it was a joint venture with Wolverine Group, the parent company of Saucony, the world's four largest jogging shoe brand, responsible for Saucony's sales in mainland China, Hongkong and Macao.

Ding Shuibo, chairman of XTEP's board of directors, said: "Saucony's market positioning in China, we will focus on high-end products sold at 800 to more than 1000."

Therefore, Nike's "price dropping" and the price of domestic brands will definitely make the competition of the whole running shoe market more intense, and this will further affect the consumer's choice of purchase.

On the afternoon of March 4th, Oteri J, a lazy boy in Beijing, interviewed several customers who were interested in buying running shoes.

A customer said, "I originally saw a pair of domestic running shoes priced at 899 yuan, but if I could buy a pair of Nike running shoes after a break, as long as 300 yuan would be enough, I might still choose Nike."

Some customers think: "the key is not brand."

If the price gap is small, the performance and materials of domestic brands will be better. I will choose domestic brands. "

But some customers think that it is important not to care about performance but to design and match colors: "the most important thing for me to choose running shoes is to look at the color value."

Also in March 1st, Tesla announced that the whole range of vehicle prices in China were substantially reduced, which is like throwing a "blockbuster" in the Chinese electric vehicle market.

Similarly, if Nike and other international sports brands try to reduce the price in a larger area in the Chinese market in the future, the domestic sports brand will also face greater challenges at home.