Nike’s “Consumer Direct Acceleration” strategy — prioritizing DTC margins over wholesale partnerships — created a vacuum that category-specific disruptors filled.
Foot Locker derived 75% of its revenue from Nike in 2020. When Nike prioritized direct-to-consumer, Foot Locker began aggressively diversifying its brand portfolio.
The Vacuum Created
Nike’s wholesale exodus left empty shelf space in thousands of retail locations. These weren’t just distribution points — they were discovery moments for consumers.
Who Filled the Gap
Hoka: Expanded to 50 Foot Locker stores by 2023
On Running: Grew to 420 retail locations
Brooks: Hit $1 billion annual revenue by owning serious runners
Between 2021 and 2023, challenger brands like Hoka and On grew revenues by 29%, compared with just 8% for incumbents.
The Strategic Miscalculation
Nike optimized for margin — cutting wholesale meant keeping more profit per unit. Competitors optimized for presence — being visible where consumers discovered and tried new brands.
Presence won.
The retailers Nike abandoned became showcases for insurgent brands. The shelf space Nike surrendered became the launch pad for competitors who now own “serious running” as a category.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
