Nike last week had a SNKRS reckoning in an internal meeting led by SNKRS global vice president Ron Faris, whose slide presentation was leaked to Complex. Faris spoke to the group about how the app is causing foundational members of the sneaker community to seek other brands.
Reflecting frustration with Nike among longtime time members of the sneaker community, one slide read, “We are at risk of losing our most sneaker-obsessed consumer. High heat, hype is killing the culture and consumers are migrating towards New Balance and smaller, independent brands.”
The presentation included a breakdown of the app’s growing popularity along with its revenue growth. Over the past year, SNKRS app user numbers increased 57 percent with revenue of $1.69 billion, still a drop in the bucket given Nike boasted $44.5 billion in revenue in fiscal year 2021. Still, while the numbers may be relatively small, SNKRS generates an outsized level of publicity and frequently trends on Twitter on days featuring popular sneaker launches. While some of the feedback is positive, a lot more is generated by people frustrated by losing out on a shoe.
Part of the issue was viewed simply as an issue of the supply and demand being out of whack with demand among users growing 70 percent over the past year with only seven percent of those users obtained a pair of shoes. Addressing the need to up “fairness,” one slide read, “Our community is becoming disenfranchised by our low fairness numbers. Our fairness numbers are not where they should be. They’re at, like, the mid-20s; they need to be in the 80s.”
Based on slides, it appears Nike recognizes it needs to do a better job reaching minority communities foundational to the brand’s success: “We’re gonna shape the marketplace to reflect the community we serve. Especially in Black and brown communities and Asian communities, so that we actually show and we actually give equity and inclusion to the communities that have been gentrified out and alienated by the resale market. What does that mean for us? It means we must listen more. It doesn’t mean that we’re going to be dictating culture. It means our community must dictate the culture. And we have to listen to them.”
More than just talk, the meeting goal laid out a goal of changing how it conducts launches on SNKRS and at boutique accounts on the receiving end of its most coveted launches. Additionally, “Nike also wants to create better content to engage with its audience, build more fair and fun experiences around launches, and work to include people who feel like they’ve been pushed out of sneaker culture.”
While none of the slides laid out an action plan, Nike recently switched up the way it conducts launch with the 50 Off-White Dunk drops by using exclusive access, which “extends personalized purchase offers to members of the SNKRS community based on their engagement with the SNKRS app.”
Reflecting a wish to better reward frequent SNKRS users, Nike CEO John Donahoe claimed in the company’s most recent earnings call that “90 percent of the invites for the Off-White Dunk went to members who had lost out on a prior Off-White collaboration over the past two years.” Whether or not the percentage is accurate, there was wide pushback on the statement on social media.