Nike announces new $100-and-under sneakers to capture price-sensitive consumers and boost sales, as the company faces competition from Adidas, On, and Hoka.
Bollywood Fever: Nike plans to introduce new sneakers priced at $100 and under in various countries worldwide, according to Chief Financial Officer Matthew Friend. This move is part of the sportswear giant’s strategy to revamp its product lineup and reignite sales growth.
In recent years, Nike has significantly increased the prices of its premium sneakers. Currently, top-end Air Jordan 1 sneakers retail for up to $200 at certain stores, including Nordstrom and Nike.com. Similarly, Air Force 1 sneakers are priced around $150 on Nike’s website. In contrast, Adidas offers its popular three-striped white and black Samba sneakers for $100 and multi-colored Gazelle sneakers for $120.
On Friday, Nike shares plunged by 19.98%, marking the largest one-day percentage drop in the company’s history. The decline followed a surprise sales drop in the latest quarter. Nike has experienced a slowdown in sales growth due to intensified competition from Adidas and emerging brands like On and Deckers’ Hoka.
Executives also noted decreased foot traffic in factory stores that sell discounted items, indicating increased pressure on budget-conscious consumers.
“This is likely a bid to secure some more price-sensitive consumers,” commented GlobalData analyst Neil Saunders, regarding the new $100-and-under line. Friend assured investors, “Our teams are also attacking opportunities across price points.”
With Americans becoming more cautious in their spending, especially on non-essential items like trendy sneakers, Nike faces a challenging market. Rival brands like On’s Cloudflow 4 and Hoka’s Clifton 9, priced at $159.99 and $145 respectively, have been gaining traction among shoppers.
Analysts believe Nike can better compete in the affordable sneaker category. “That’s an area that they can compete in better in the near term,” said Joseph Civello of Truist Securities.
However, the rollout of a new budget-friendly line carries risks. “It might work to a degree, but it does not remedy the wider problem of a lack of innovation,” Saunders noted. Some of Nike’s key styles have recently lost value on the resale market. For example, Air Jordan 1 Retro High OGs have seen a resale price drop of about 32% as of May, according to Altan Insights, which analyzes the collectible sneaker market.
As Nike, a sponsor of the Paris Olympics, navigates these challenges, the new line of $100-and-under sneakers aims to attract more price-sensitive consumers and bolster the company’s position in a fiercely competitive market.
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