Raise your hand if you’ve ever been personally victimized by the cost of a pair of Nike shoes…
Idk about you, but my hand is raised high.. Feels a little personal, doesn’t it?
But how exactly does Nike gain it’s industry power & make us feel a major case of FOMO (fear of missing out for all of you sleeping under a rock) if we don’t purchase their products?
It’s actually quite simple! Let’s dive in!
Nike knows what their value is. And after all, they do have an estimated market share of 50% if that puts it into perspective for you. Nike is the real deal in their industry.
they know they can charge higher prices and we (as the consumers) will pay the pretty penny. This is simply because of the brand they have built for themselves over time. They give themselves credit, because they know credit is due and they have earned it.
Guess where majority of the “trends” in this world come from… I will give you a minute.
If you guessed “influencers” then you are correct my friend!
You see, its 2023… influencers are the backbone of this world’s marketing strategy. And Nike knows how to increase the demand for their products by making them relevant. How do they make their products relevant? Influencer marketing.
They are fully aware that streetwear is in and Dunk Lows fir the exact vibe to complete any trending outfit, no matter the style.
You know what happens when supply is limited? Demand increases. And so do their prices. This is due to the fact that limited releases make consumers go crazy and increases the urgency to buy what they’re selling.
You see my friend, it’s all about how you position your product. And Nike has nailed down their intense and constructive strategy to maintain their cult-like following of loyal consumers.
Nike’s buyer psychology tactic is to charge high prices so our perceived value of the shoe increases. Sounds crazy, but it’s the truth.
It’s like any other luxury or higher priced brand… the value and quality are pretty comparable to other brands out there selling the same thing. But you’re paying for name brand… you’re paying for the label.
Dunks have been around since the 1980’s and they have only ever increased in price.
Nike pays a fat stack in retail markup (about 50%), operating and manufacturing expenses, labor costs, the actual cost of goods and raw materials, and much more.
So yes, they’re making a nice chunk of change off of the shoe itself, but it’s not all going straight to their profit column. There’s other costs associated with creating and selling the pair of Dunk Lows.
Nike found what works for THEIR brand. If you focus on doing the same things as them and straight up copying what worked for their company, you’re not going to see results. But if you ALSO focus on finding what works for your business through trial and error, then your brand’s impact will be unstoppable!
Side note: I am 100% guilty of purchasing my own pair of Nike Dunk Lows… and am sorta addicted to this particular style… anyone else want a full closet collection of one pair in every color??
This article was written by me, Kaylie Miller - the founder & CEO of the Elevated Education Company! I'm a small business coach & educator helping you see your blind spots that are holding you back from reaching your business goals!
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