Remember the past

A new year and new predictions from journalists, business leaders and pundits about the future of everything. Each year the process is repeated, and most predictions are never checked to see if they were accurate or not. As Spanish-born American philosopher George Santayana (1863-1952) wrote in his book The Life of Reason, “those who cannot remember the past are condemned to repeat it”. Santayana produced five volumes from 1905 to 1906 consisting of Reason in Common Sense, Reason in Society, Reason in Religion, Reason in Art, and Reason in Science. It’s a pity he did not write Reason in Sport because rationale or reasoning by some leaders, brands, athletes, coaches, and other influencers in the sports industry is thin on the ground today.

Out of curiosity, I reviewed the January edition of this blog from 2019 to see what I wrote. It was about the transition to digital marketing and the prediction that brands need to be more digital-first and mobile centric, which would be a challenge for legacy brands. Examples of Black Friday, Cyber Monday and Singles Day were quoted to illustrate the growth of online purchases. Manchester United announced the opening of three physical experience centers in China in 2020 to serve 107 million Chinese fans and sell them more merchandise and memories. Nike invested $2.1 billion in NikePlus to establish a single customer profile, supported by the acquisition of data analytics firm Zodiac. At the time 29% or $10.5 billion of Nike sales came via Nike Direct. Today Nike generates revenue of $51 billion so I guess the D2C strategy is still working.

Latest predictions by a study from WARC about global advertising forecasts a growth of 8.2% in 2024, a boost that will see the market exceed $1 trillion for the first time. Even more notable is that five tech firms will account for 51.9% of the market, including Alibaba, Alphabet (Google & YouTube), Amazon, ByteDance (TikTok & Douyin) and Meta (Facebook & Instagram). Key channels include social media, retail media and connected TV driven by EURO 2024 in Germany, the Paris 2024 Olympic Games, and the US Presidential Elections. And guess what, social media will be the fastest growing medium….

There are few things that make me stand still and reflect on events in the sports industry as history keeps repeating itself. But the announcement of Tiger Woods and Nike ending a 27-year partnership was worthy of some reflection. This partnership was created in an era when generational talents like Tiger Woods and Michael Jordan stood for something different. Jordan in basketball and Woods in golf transcended culture with a rebel cause that appealed to millions beyond the court and golf course. Iconic is an overused word in sport today but Woods and Jordan were iconoclastic athletes of their era.

With brands like Hoka and Lululemon entering a busy market, maintaining growth and market share is a challenge for the legacy brands like Nike and Adidas. But if we unpick the pre-Christmas statement from Nike CFO, Matthew Friend, the writing was on the wall. Friend referred to a “highly promotional retail environment” where Nike is looking for $2 billion of savings, read ‘cut marketing expense’. The future focus will be on accelerating new product development and was summarised neatly as “we need to accelerate our pace of innovation, elevate our marketplace experiences, maximise the impact of our storytelling and increase our speed and responsiveness, all in service of the consumer”.

There was a time when most people thought Roger Federer and Nike were inseparable. But, as we later learned, Federer had other plans. Today Federer is also known for his stake in shoe brand On who are making inroads into the running and tennis markets. Whilst legacy brands have enormous equity in the past, it is clear consumers and sport fans have different wishes and expectations. Perhaps this is a lesson for the wider sports industry. We need to remember the past but focus on delivering products, services and experiences that will genuinely enhance our performance, engagement and memories of the future. Otherwise, I suspect Santayana’s often quoted saying will still be true in 100 years’ time.