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Last week, Nike laid out its plans for the Paris 2024 Olympics with a spectacle designed to show off — and remind the industry of — its strength. The company flew in 400 media, creators, marketplace partners and investors for a multi-million-dollar, three-day extravaganza. Though Nike won’t share specific figures, it plans to spend more on this Olympics than past games.
To kick things off, Nike brought together 40 athletes, including tennis player Serena Williams, sprinter Sha’Carri Richardson and marathon runner Eliud Kipchoge, to Paris’s Palais Brongniart to debut the brand’s Olympics uniforms. Nike also unveiled 13 AI-generated sneakers, co-created with athletes including soccer player Kylian Mbappé. The goal was to demonstrate to the world “the power of Nike”, says Heidi O’Neill, Nike’s president of consumer, product and brand. “It will only build to Paris.”
The Olympics arrive at a pivotal moment for Nike, once an untouchable leader now operating in an increasingly crowded market. “Competition has been fierce, with innovative brands taking share,” Bank of America analysts said on Nike’s recent struggle in a Thursday note. To Vogue Business, managing director Lorraine Hutchinson says: “You have two major new soles in the running world that are taking share — and neither of them are Nike.” They’re Hoka and On Running, she says, while sportswear brands like Lululemon are also coming up on Nike’s heels.
Nike has felt the heat. In December, the sportswear giant lowered its sales outlook to 1 per cent growth for fiscal 2024 (down from mid-single digits) and announced $2 billion worth of cost-cutting plans over the next three years. This would be the lowest annual year-on-year growth since 2010, save for 2020’s pandemic slump. This outlook still stands, Nike confirmed.
Hutchinson anticipates that much of the planned $2 billion cuts will be reallocated to marketing spend. “An admission of lack of innovation, a renewed focus on it and $2 billion to spend — I think that’s a very interesting combination,” she says.
The market seems to agree: on Thursday, Bank of America upgraded Nike shares from ‘neutral’ to ‘buy’ for the first time in over two years. Shares rose 2.5 per cent on Thursday. Hutchinson attributes the bump not to the Olympics, but to the proactive cuts and preparation for newness. “Nike’s history would say that they’ve always come out swinging after a time of lower levels of innovation,” Hutchinson adds.
Last week in Paris provided a glimpse into Nike’s plans to fight back through a reinvention of the Nike Air sneaker. The brand debuted new iterations to be worn by its athletes at the Olympics; a new Pegasus Premium model for consumers, launching in 2025; and an AI-generated interpretation of Air tech, co-created with athletes. Nike contextualised this innovation with a look back at Air’s historical significance post-1978 launch, and its recent cultural clout by way of collabs with brands from Sacai to Comme des Garçons.
Making noise
Nike is gearing up to make big noise come 26 July. The International Olympic Committee has loosened its rules this cycle via a Rule 40 pilot programme Nike is participating in, O’Neill says. This means brands that aren’t official Olympic sponsors can have a bigger presence during the games, including reacting immediately on social media. Previously, non-sponsor brands were not allowed to post wins on social media and could never use the Olympic IP or athlete imagery during the games. The goal is to broaden the Olympic brand reach to younger consumers and increase traffic, as well as to increase athlete advertising opportunities.
This is good news for Nike, O’Neill says. “Our brand voice is going to be loud and it’s going to be confident and it’s going to have some head snaps,” she says. “I’m really excited for that to be something that will be a difference-maker in Paris.”
It’s about balancing online and IRL. Paris will play a key role, with the games expected to have an impact on the overall EMEA market. Nike will host a set of in-person activations at the Centre Pompidou art museum (the outside of which inspired an Air Max 1 sneaker design) that will be accessible to the public, including athlete meet-and-greets.
“Digital and physical need to be strong; and wholesale partners, which gives us an opportunity to be in the path of consumers and get them to touch and feel innovation that they’re not as familiar with, will be equally as strong,” says Craig Williams, president of geographies and marketplace.
Already, Nike has generated Olympics noise on socials — though not the kind it hoped for. The brand has copped backlash from commentators and athletes for its US women’s track kit thanks to its “too-high-cut” bottoms. There are, however, other options. Richardson wore the shorts version of the kit at the Thursday show. Nike athletes have also spoken in support — and the brand has confirmed that, in addition to a range of style choices, the brand will have tailoring options for athletes.
Innovation rules
Nike has faced analyst critique for a lack of innovation. The pandemic slowed down new releases, and analysts have flagged a need for new shoe styles, not just new colourways. Last week, Nike aimed to tackle analyst concerns head-on by outlining — shoe by shoe — just how it’s innovating.
This innovation trickles down from Nike athlete gear to consumer products, execs say. Set for release in spring 2025, Nike’s latest Pegasus sneaker, which made its debut at the Paris event, is a case study in Nike’s ‘athlete-to-consumer’ pipeline. It marks the first time the Air bag is sculpted to the foot, instead of sitting flat in the shoe.
“There is a cascading effect [where] those technologies that help the elite athletes are then applied to the everyday,” says chief innovation officer John Hoke. “We take the ‘super shoe’ methodology and drive that into the Pegasus. We’re repackaging and reimagining that for the everyday.”
This renewed emphasis on the consumer is needed, Hutchinson says. “Nike needs to have more newness: something that really appeals to the everyday runner, not just the elite marathoner. That’s what they’re working on.” After all, Hoke says, top athlete or not, consumers want the best. This new running shoe tech aims to deliver that.
Tapping the AI zeitgeist
Thursday evening’s show closed with Nike’s most prominent embrace of AI: 13 shoes created using generative AI, in collaboration with Nike athletes. The project is called A.I.R.
Earlier this year, Nike tapped 13 athletes to work with the Nike innovation team and generative AI tools to co-create their dream shoe. Mbappé, for instance, wanted “unlimited speed”, while Richardson wanted “relentless force”. The team leveraged generative AI to produce hundreds of per-athlete images, from which they chose three top contenders. They evolved these from images to actual footwear designs using a combination of hand sketching, immersive 3D sketching and computational design. O’Neill recalls one athlete at Nike HQ, VR headset on, talking through options with the team in a factory. They then 3D printed the final products, which were on display at the show.
Don’t mistake this for new adoption — Nike has used computational design and AI for years, O’Neill flags. This is simply the first time it’s done so in such an overt way — and shouted about. The timing is intentional, Williams says: “Everyone is interested in AI.”
The debut of the AI-generated sneakers is a signal for what’s to come, O’Neill says. “We see our future as prototype after prototype,” she continues. “We’re exposing quite a bit of the future of Air here.” The goal is to make A.I.R part of the consumer experience in the near future, she adds. Especially given this pilot’s quick timeline (it began just this year).
But for now, it’s about (re-)introducing Air — and Nike as the go-to brand — to the next gen, O’Neill says. “The combination of athletes, innovation, culture and sport has a distinctive youthful feeling. It’s our timeless formula and we have to keep doing it over and over and over,” she says. “It’s our next chapter of growth.”
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