On the first Sunday in November, Nike Chief Executive Officer Elliott Hill was at the finish line of the New York City Marathon in Central Park, greeting the sport’s elite athletes. But runners in Nike sneakers weren’t at the top of the podium. Benson Kipruto won the men’s race in a pair of Adidas; Hellen Obiri, wearing Ons, took the women’s race.
Nike Inc. has a problem on roads, tracks and treadmills where its sneakers used to dominate. Hill knows that the world’s largest sportswear company has fallen behind, and he has made reviving the running division an urgent priority since rejoining Nike last year.
“We expect more of our running team,” he says during a recent visit to Nike’s sport research lab at headquarters in Beaverton, Ore., where testing facilities include an indoor track and sprint lane. “It is critical to the success of our company.”
Nike has lost market share in the $7.4-billion U.S. running shoe market, which represents about 8% of the footwear market, according to research firm Circana. Previous management focused on selling lifestyle sneakers such as Air Force 1s and Dunks and moved away from offering its products through third-party stores.
Now Nike is trying to course-correct. The company is designing new shoes geared toward performance, reaching out to run clubs to rebuild the brand and getting its products back into the specialty running stores that dedicated runners frequent.
Kristyn Smith, a 43-year-old New Yorker who coaches other runners, was once a hardcore Nike devotee. In 2018 she began running in the brand’s Zoom Vaporfly 4%, the $250 mass-market version of the super-shoes made for marathon legend Eliud Kipchoge, and she adored the new technology.
But over time, Smith began hoarding old versions of Nike shoes because she didn’t like the changes to the brand’s new releases each year. Rivals had developed their own super-shoes, giving her plenty of alternatives to choose from, and she’d test them out at running events.
These days Smith, who works in entertainment and runs about 4,000 miles per year, wears a rotation of brands including Adidas and Puma.
“I used to be a huge Nike fan. I would basically only wear Nike shoes,” says Smith, who pays close attention to elite runners and the shoes that help them win. “They have to come up with something that is really good again.”
The comeback effort begins with new super-shoes designed for the best athletes.
Inside one building at headquarters, about a dozen of Nike’s recent running shoes are laid out on a table, some surgically sliced open to reveal their guts: foams, plates, leathers and synthetic fibers.
One of the track spikes was created for Faith Kipyegon, a middle-distance professional runner who attempted to break the four-minute mile in June while wearing a custom pair of Nikes.
Staff say it’s the lightest and most propulsive energy-returning spike they’ve ever developed. It has a curved carbon fiber plate and the tallest air unit ever put into a track spike in order to return as much energy as possible with each step. This means the air pocket in the shoe does a better job of cushioning runners’ feet and helping to propel them forward.
Nike engineers take the advanced concepts and integrate them into products that eventually land on store shelves.
“The best way we can do it is put on a Hoka, put on our shoe, price for price,” says Tony Bignell, Nike’s chief innovation officer. “Close your eyes. Which one do you think is better?”
Under Hill, Nike has rearranged its running products into three core lines. Pegasus road running shoes are versatile and responsive daily trainers suitable for a variety of runs. Vomero is the comfort-focused offering, with plush pillows of Nike’s proprietary ZoomX foam to dampen the impact to the feet and legs on longer easy runs. The Structure line provides the most support and stability. Each has versions at different prices, from $140 to $230.
Last month, Nike released the Vomero Premium, stacked high with foam, two air units and a waffle outsole, a follow-up to the slightly slimmer Vomero Plus that launched over the summer. Both look much more like chunky Hokas than their predecessors.
“I’m spending more time on the product, making certain that we do have the innovation moving forward,” Hill says. “I have a high sense of urgency and a high degree of impatience.”
It’s not just about performance but about style, too. Sneakers, he says, are “the silhouette of choice right now out on the streets, beyond just running.”
Executives at headquarters repeat a common refrain: Running is the heart of Nike.
They speak of co-founder Bill Bowerman, a former track and field coach, as a folk hero. The new LeBron James Innovation Center on campus has a waffle pattern on its ceiling, an homage to Bowerman getting the inspiration for the Waffle Racer, Nike’s first breakthrough running shoe, over breakfast in 1971.
Despite that, Nike has spent the last several years losing runners in what’s usually a loyal market segment.
Its product-development engine slowed at the wrong time — just as people turned to running during the pandemic, sparking a global boom in run culture. There was a major shift underway in sneaker technology as well that Nike missed.
A decade ago, the fastest sneakers were minimalistic, slamming against the ground with each stride to spur peak performance. Since then, they’ve ballooned in size and cushioning as designers added layers of squishy superfoams and airbags to make them more comfortable while retaining speed.
The shift can be seen across brands, including Hoka’s engorged Bondi sneakers and On’s honeycombed Cloudmonster shoes, which feature the latest and greatest innovations: carbon speedboards, energy-returning foams and heel cushions. The companies accumulated billions of dollars in sales while performance products coming out of Nike headquarters slowed to a trickle.
Nike also made a crucial misstep with its retail partners.
In a survey last year, RunStyle found that 75% of runners already have a brand in mind when they enter a store to buy a pair of shoes, ready to re-up to the next version of whatever shoe they’re used to. Most shoppers turn to specialty running shops and sporting goods stores, according to the market research firm.
But Nike began pulling back from those locations in 2020 to prioritize its own stores and website. Suddenly, the shelf space at chains such as Fleet Feet and Big 5 Sporting Goods were bereft of Nikes.
The void was filled with competitors like Brooks, Asics, Mizuno, Saucony and Salomon that found themselves with more exposure than ever. Hoka became a household name and surpassed $2 billion in revenue in its last fiscal year. On went public in 2021 and now expects its net sales to reach more than $3 billion this year.
Hill has vowed to rebuild Nike’s retail relationships. This year, the company resumed selling on Amazon for the first time since 2019. At Foot Locker, one of its most important partners, Nike sneakers have regained the spotlight at the front of the stores for the first time in years.
“Insights from our retailers are really key,” says Tanya Hvizdak, vice president and general manager of global running at Nike. That includes “education, real feedback and their personal take on the competitive landscape. We’re hyper-focused on winning back their trust.”
Nike is also increasing its outreach to run clubs, where runners meet regularly to jog and train together. Many of the big sportswear brands have capitalized on running clubs’ growth through sponsorships and community events.
A big test for Nike’s efforts was the New York City Marathon, where nearly 60,000 runners took to the streets with just about every brand of running shoe on their feet.
Kipchoge, now 41 and Nike’s top running endorser, stuck with the lead pack for much of the race in prototype shoes developed at headquarters.
The next day, Hill went to Nike’s Fifth Avenue flagship, where employees had decked out the ground floor in Nike running gear for an event with Kipchoge, who wore a pair of retro Vomeros. Kipchoge’s endorsement is critical even as his career enters its final stages.
Sibel Canlar, a 41-year-old certified running coach who works at a private equity firm, says when Kipchoge unofficially broke the two-hour marathon mark while wearing Nikes in 2019, she was sold on the brand and has worn them ever since.
“I never tried anything else,” Canlar says. “The fastest people in the world run in them, and I run in them.”
The new products are starting to show results. Though Nike doesn’t consistently break out sales figures for its running business, executives said last quarter that running sales rose 20%, a sign that Hill is prodding the brand in the right direction.
“There are days when I feel like I’m running 150 miles an hour and there’s days when I don’t feel like I’m moving fast enough,” Hill says. “The reality is our consumer and our competition isn’t sitting around and waiting.”
Bhasin writes for Bloomberg.
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