Sometimes it seems like Nike Inc. (NKE) just can't help but stick its finger in someone's eye. That became obvious during the Olympics when Nike, which made its name in the '90s with edgy, in-your-face advertising, featured a spot showing runner Suzy Favor Hamilton escaping a would-be chainsaw murderer. The ad flashed the question, "Why sport?" followed by the answer: "You'll live longer." Nike says it was intended to be a spoof of a horror movie. Consumers balked at what they saw as a jokey portrayal of violence against women, and NBC yanked the ad.
Nike is learning a painful lesson. After years of playing mainly to young men and teen boys with action shots of sports heroes like Michael Jordan, it is struggling mightily to appeal to a much broader audience--especially women. The embarrassingly off-putting Hamilton ad and some old-fashioned megabuck endorsement deals with celebrity athletes are lingering vestiges of that old Nike image. But as sales of women's sports apparel eclipses that of men's, the Beaverton (Ore.)-based company is being forced to experiment with a softer, more nuanced pitch. "A single hard sell just doesn't work anymore," says Richard H. Burton, director of the University of Oregon's James H. Warsaw Sports Marketing Center.
ORDINARY PEOPLE. It's no surprise that Nike is using big-name female athletes in its new spots. But whereas the chainsaw ad got most of the attention, Nike has been quietly shifting to show stars in "real" poses to which everyday people can relate. A current print ad for its women's Air Max Plus sneakers, for instance, pictures soccer star Brandi Chastain standing in a modest Nike tee-shirt and long pants with the word "ladylike" plastered across the page. Another apparel ad has sprinter Marion Jones in subdued poses, such as seated on the floor. Under the old traditional Nike approach, "we could be intimidating for a lot of women," admits Jacqueline Thomas, Nike's director of women's marketing.
Nike has no choice but to change its appeal. Sales of women's shoes and apparel account for only 20% of Nike's U.S. total, but they're a rare bright spot in its slow recovery. The company's total sales in the fiscal year ended in May rose just 2.5%, to $8.99 billion. But women's products are among its fastest-growing categories. The whole U.S. market for women's sports apparel grew 6.8% last year, to $15.7 billion, according to the Sporting Goods Manufacturers Assn., compared with only a 2.6% growth in sales of men's apparel, to $15.6 billion. And in the moribund athletic-shoe business, spending on women's shoes held steady at about $6.3 billion last year, while men's purchases fell 2.6%, to $5.5 billion. Says Clare L. Hamill, vice-president of a unit that Nike recently set up to design and market women's products: "Women's now has a higher share of Nike management's mind space."
But Nike doesn't enjoy anything close to the dominating presence in women's products that it did in men's basketball shoes. And competition is heating up. Reebok International Ltd. has revived an advertising effort behind its Classic line of white sneakers. New lines of women's athletic-style apparel are emerging from Gap, Tommy Hilfiger, Prada, which started the Prada Sport brand in 1998, and Ralph Lauren, which launched Polo Sport RLX last year. Longtime Nike rival Adidas-Salomon AG on Oct. 11 said it plans to launch new lines of sports-style clothing.
Meanwhile, Nike seems confused about whether to transfer its softer approach over to the men's side, too. The Swoosh continues to court young male hoopsters much the same way it has for years--which is why Nike recently inked a $30 million endorsement deal with NBA star Vince Carter. And even in golf, which attracts an older demographic, Nike is relying on a big-money contract with Tiger Woods, reportedly paying him more than $100 million to pitch golf balls and apparel. Yet Nike is dabbling in sensitive-guy touchy-feelyness. A spot that ran during the Wimbledon tournament showed Andre Agassi and Pete Sampras joking about their underwear and reminiscing about Sampras' late coach. "That ad shows that of the various sides to the Nike brand, emotion is one of them," says Ira Matathia, head of trendspotting at Young & Rubicam.
Can Nike pull off this emotional balancing act? A muddled image will only make its precarious comeback even tougher. "When you try to expand, there's a danger of undermining and diluting the power of the brand," notes Al Ries, an Atlanta-based marketing consultant. But Nike must make the transition. Its old approach has already sent some prized would-be customers screaming into the night.