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Things seemed to go well at the beginning. Due to the pandemic and the objective challenges of the traditional Brick & Mortar business, the business operated by Nike Direct (the business unit in charge of DTC) was flying and justifying the important strategic decisions of the CEO. Then, once normality came back, things slowly but regularly, quarter by quarter, showed that the separation line between being ambitious or being wrong was very thin.

In 6 months, hundreds of colleagues were fired and together with them Nike lost a solid process and thousands of years of experience and expertise in running, football, basketball, fitness, training, sportwear, etc., built in decades of footwear leadership (and apparel too). Product engine became gender led: women, men, and kids (like Zara, GAP, H&M or any other generic fashion brand).

Consumers are not so elastic as some business leaders think or hope. And consumers are not so loyal as some business leaders think or hope. So, what happened? Simple. Many consumers - mainly occasional buyers - did not follow Nike (surprise, surprise) but continued shopping where they were shopping before the decision of the CEO and the President of the Brand. So, once they could not find Nike sneakers in “their” stores – because Nike wasn’t serving those stores any longer -, they simply opted for other brands.

Until late 2010s, Nike had been on a total offense mode (being #1 in every market, in every category, in every product BU, basically in every dimension), a sort of military occupation of the marketplace and a huge problem for competitors that did not know how to react under such a domination. The strategic focus was only one: win anywhere. The new strategy determined the end of the marketplace occupation. Nike opened unexpected spaces to competitors, small, medium, or large brands (with exception of the company based in Herzogenaurach, that – as they usually do - copied and pasted the Nike strategy and executed it in a milder format).

One of the empiric laws of business says that online, the main lever of competition is “price” (as the organic consumer funnel is built on price comparison). The proverbial ability of Nike to leverage the power of the brand to sell sneakers at 200$ began to be threatened by the online appetite for discounts and the search for a definitive solution to the inventory issue. Gross margin – because of that – instead of growing due to the growth of DTC business, showed a rapid decline due to a never-ending promotional attitude on Nike.com

Nike has been built for 50 years on a very simple foundation: brand, product, and marketplace. The DC Investment model, since Nike became a public company, has been always the same: invest at least one tenth of the revenues in demand creation and sports marketing. The brand model has been very simple as well: focus on innovation and inspiration, creativity and storytelling based on athletes-products synergy, leveraging the power of the emotions that sport can create, trying to inspire a growing number of athletes* (*if you have a body, you are an athlete) to play sport. That’s what made Nike the Nike we used to know, love, admire, professionally and emotionally.

What happened in 2020? Well, the brand team shifted from brand marketing to digital marketing and from brand enhancing to sales activation.

shift from CREATE DEMAND to SERVE AND RETAIN DEMAND, that meant that most of the investment were directed to those who were already Nike consumers

as of 2021, to drive traffic to Nike.com, Nike started investing in programmatic adv and performance marketing the double or more of the share of resources usually invested in the other brand activities

the former CMO was ignoring the growing academic literature around the inefficiencies of investment in performance marketing/programmatic advertising, due to frauds, rising costs of mediators and declining consumer response to those activities.

Because of that, Nike invested a material amount of dollars (billions) into something that was less effective but easier to be measured vs something that was more effective but less easy to be measured.

To feed the digital marketing ecosystem, one of the historic functions of the marketing team (brand communications) was “de facto” absorbed and marginalized by the brand design team, which took the leadership in marketing content production (together with the mar-tech “scientists”). Nike didn’t need brand creativity anymore, just a polished and never stopping supply chain of branded stuff.

He made “Nike.com” the center of everything and diverted focus and dollars to it. Due to all of that, Nike hasn’t made a history making brand campaign since 2018, as the Brand organization had to become a huge sales activation machine.

It symbolizes everything everyone has ever hated about digitization. It celebrates a lossy, creative compression for the most flimsy reason: An iPad shedding an irrelevant millimeter or two. It's destruction of beloved musical instruments is the perfect metaphor for how utterly tone-deaf technologists are capable of being. But the real story is just how little saved up goodwill Apple had in the bank to compensate for the outrage.

This should all be eerily familiar to anyone who saw Microsoft fall from grace in the 90s. From being America's favorite software company to being the bully pursued by the DOJ for illegalities. Just like Apple now, Microsoft's reputation and good standing suddenly evaporated seemingly overnight once enough critical stories had accumulated about its behavior.

Apple had such treasure chest of goodwill from decades as first an underdog, then unchallenged innovator. But today they're a near three-trillion dollar company, battling sovereigns on both sides of the Atlantic, putting out mostly incremental updates to mature products.

A hundred years ago, when image creation and distribution was more constrained, commerce was arranged by class. You can conceive of it as a vertical model, with high and low culture, and magazines and product catalogs that represent each class segment. Different aspirational images are shown to consumers, and each segment aspires upward to the higher level.

The world we live in is no longer dominated by a single class hierarchy. Today you have art, sport, travel, climbing, camping, photography, football, skate, gamer.

Class still exists, but there’s no longer just one aesthetic per class. Instead, “class” is expressed merely by price points that exist within consumer subcultural categories

In the starter pack meme, classes of people are identified through oblique subcultural references and products they are likely to consume. Starter pack memes reverse engineer the demographic profile: people are composites of products they and similar people have purchased, identified through credit card data and internet browsing behavior tracked across the web. While Reddit communities for gear were self-organizing consumer subcultures from one direction, companies and ad networks were working toward the same goal from the other direction.

API-ification has happened across the entire supply chain. Companies like CA.LA let you spin up up a fashion line as fast as you’d spin up a new Digital Ocean droplet, whether you’re A$AP Ferg or hyped NYC brand Vaquera. Across the board, brands and middleware were opening new supply chains, which then became accessible entrepreneurs targeting all sorts of subcultural plays. And with Shopify, Squarespace, and Stripe, you can open an online store and accept payments in minutes. Once the goods are readily available, everything becomes a distribution problem—a matter of finding a target demographic and making products legible to it.

Products begin their life as an unbranded commodities made in foreign factories; they pass through a series of outsourced relationships —brand designers, content creators, and influencers—which construct a cultural identity for the good; in the final phase, the product ends up in a shoppable social media post

way: in the cultural production service economy, all culture is made in service of for-profit brands, at every scale and size.

European and American commentators of all political stripes recognize the current cultural moment as one that is stuck in some way. Endless remakes and reboots, endless franchises, cinematic universes, and now metaverses filled with brands who talk to each other; a culture of nostalgia with no real macro narrative

Beyond our workplaces, what else is stepping in to provide a sense of community and belonging?

All in all, product marketing businesses can only do so much to situate their goods in these broader cultural worlds without eating into their margins. This seemingly insurmountable gap is what my workshops were trying to address. But what would it mean for brands to stop pointing to culture, and to start being it?

Culture is a process, with the end result of shaping human minds.

Today, social media has become a more perfect tool for culture than Arnold could have imagined, and its use a science of penetrating the mass mind. All communication now approaches propaganda, and language itself has become somebody else’s agenda. Little

When you bought Bitcoin and Ether, it’s with the knowledge that there was also a culture there to become part of. Now years later, there are many tribes to “buy into,” from Bitcoin Christians to Bitcoin carnivores, from Ethereum permissionless free market maxis to Ethereum self-organizing collective decentralized coop radicals. Even if none of these appeal to you, you still end up becoming what “the space” (crypto’s collective term for itself) calls a “crypto person.” The creation of more and more “crypto people” is driven by the new revenue model cryptocurrencies exhibit. The business logic of these tokens is “number go up,” a feat accomplished by getting as many people to buy the token as possible. In other words, the upside opportunity is achieved with mass distribution of Bitcoin and Ethereum culture—the expansion of what it means to be an ETH holder into new arenas and practices. Buyers become evangelists, who are incentivized to promote their version of the subculture.

In the 2010s, supply chain innovation opened up lifestyle brands. In the 2020s, financial mechanism innovation is opening up the space for incentivized ideologies, networked publics, and co-owned faiths.

Under CPSE models, companies brand products. They point to subcultures to justify the products’ existence, and use data marketing to sort people into starterpack-like demographics. Subcultures become consumerized subcultures, composed of products

Authenticity, I came to understand, was more than a culture of irony and suspicion of everything commercial culture has to offer. It drew on a deep moral source that runs through our culture, a stance of self-definition, a stance of caring deeply about the value of individuality.