Data from analytics firm Vertical Knowledge indicates that retailers have significantly reduced prices on a greater number of Nike sneakers in 2024 compared to two years ago, posing a challenge to the sportswear giant’s usual strong pricing power. The analysis of online pricing data from major chains, including Foot Locker, Dick’s Sporting Goods, and Macy’s, reveals that, on average, retailers discounted 44% of their Nike sneakers in 2024, up from 19.4% in 2022.
This shift in pricing strategy is noteworthy as it breaks from the past when Nike retailers typically sold their inventory at full price. The trend of slashing prices on Nike sneakers could impact the company’s position, particularly considering Nike’s reputation for charging premium prices to the mass market.
Discounted Nike shoes were observed in various stores, with reductions seen on Lebron 20 basketball sneakers and Nike Air Max styles. The average price of Nike sneakers at major retailers dropped to $79.92 in early 2024, down from $103.61 in the first quarter of 2022.
Nike investor Brian Yacktman expressed concern about the discounts, emphasizing the need for Nike to return to regular pricing. He highlighted the importance of Nike regaining its premium positioning and stepping away from promotional pricing.
Despite Nike’s recent focus on direct-to-consumer sales, the company announced its return to certain retailers in June, emphasizing the significance of these partnerships. However, the increased discounting observed by Vertical Knowledge suggests challenges in the current market, leading to Nike’s surprise cut in its annual sales forecast for 2024.
Analysts suggest that Nike’s strategy of releasing numerous styles to retailers, including retro lifestyle sneakers and iterations of its Jordan brand, may have contributed to an oversaturated market. The prevalence of discounts on Nike styles raises concerns about the brand’s allure for consumers and the risk of it being perceived as just another shoe brand.
Furthermore, the resale market for Nike sneakers, including popular styles like Nike Dunk Low Retro, has experienced a decline in prices. The oversaturation of releases may have contributed to this trend, as some releases that initially sold for high resale prices are now available for close to or less than their original list prices.
