Nike vs. Physical Availability: 0–1

On September 21, 2026, Nike was removed from the S&P 100, an index it had been part of since 2008. Formally, the reason was market capitalization, which had become too small for the index. Since its 2021 peak, Nike has lost about 78% of its value, or more than $200 billion, Fortune reports.

The reasons usually cited are China, tariffs, weak product launches, and strong competitors. As marketers, we are more interested in what happened to Nike’s availability to buyers over those years. A good part of this crisis, after all, was the company’s own doing.

How Nike Took Itself Off the Shelves

It all started in 2017, when Nike announced its Consumer Direct Offense strategy. At a meeting with investors, one of its senior executives said the company worked with 30,000 retailers worldwide and would carry out the new strategy with about 40 partners. That executive was Elliott Hill, who runs Nike today and is dealing with the consequences of that decision.

From there, the company kept moving in the same direction, and faster. In 2019, Nike left Amazon, saying it wanted to build direct relationships with consumers. In 2020, new CEO John Donahoe, a former eBay chief, told investors that half of the company’s sales should become digital and that there would be fewer wholesale partners.

And there were fewer. Over three years, according to its chief financial officer, Nike exited about half of the wholesale accounts it considered “undifferentiated.” The retailers the brand dropped or scaled back with included Zappos, Dillard’s, Macy’s, and DSW. Even Foot Locker was affected, a retailer where Nike accounted for three-quarters of purchases. In 2022, the retailer warned that this share would fall to about 60% and attributed it to Nike’s shift to direct sales.

Why could this have looked like a good idea? A company’s own channel brings higher margins and direct contact with the consumer. And the pandemic, as Mark Ritson writes in Marketing Week, created the impression that shoppers had moved online for good. For a while, it really did look like a success, as the direct channel’s share of revenue grew from about 30% to 42%.

What the Science Says

According to the Ehrenberg-Bass Institute, brands grow mainly through penetration, meaning by increasing the number of buyers. This is covered in Byron Sharp’s book “How Brands Grow” and in the institute’s later work. And penetration comes from a brand’s mental and physical availability.

Mental availability means that a buyer easily recalls the brand at the moment of purchase and quickly recognizes it. Physical availability means that the brand is easy to find and buy in a form that suits the buyer. In one of its reports, the institute puts it very briefly: buyers choose brands that are easy to mind and easy to find. The same report says brands grow through new buyers, while raising the loyalty of existing ones does not have that effect.

By cutting the number of wholesale partners, Nike was reducing its own physical availability. In other words, the brand removed itself from some shelves and websites where buyers choose among several brands. And a person who walks into a multibrand store and doesn’t find Nike there buys what is on the shelf. Nike’s own website and app don’t make up for this, because they mostly reach people who have already chosen Nike and are ready to buy directly. And growth, as we already know, comes from new buyers.

In fact, the score could have been 0–2. In December 2024, Elliott Hill acknowledged that Nike had shifted investment from creating demand for the brand to performance marketing, which captures that demand for its own digital channel. So alongside physical availability, support for mental availability was weakening too.

A Shelf Never Stays Empty

Retailers had to fill the space, and they did. Foot Locker began working more actively with other brands. And at Dick’s Sporting Goods, according to YipitData figures cited by Reuters, On’s share of footwear sales grew from 0.8% to 6.1% in less than a year. Hoka doubled its share over the same period.

Of course, product is part of the story here too. Analysts quoted by Reuters attribute Hoka and On’s success to that, and say Nike has fallen behind on innovation. So Nike weakened its shelf presence at the very moment when competitors with strong products were going after it. Even so, it remains the largest brand in the category by a wide margin, although its global share, according to Euromonitor data, is gradually declining.

The Direct Channel Didn’t Make Up for the Loss

Then the very channel all of this was done for started to decline. According to Nike’s financial reports, between fiscal 2024 and fiscal 2026 the company lost about $5 billion in revenue, and roughly three-quarters of that decline came from its own stores, website, and app. Wholesale barely changed over that time.

Back in 2024, Mark Ritson wrote that the lack of physical availability hurt Nike so much that direct sales fell along with indirect ones. Inside the company, the drop in traffic was attributed to a lack of new products and weak brand storytelling. Both explanations likely hold some truth.

Two Nike CEOs Have Admitted the Company Went Too Far

In April 2024, John Donahoe told CNBC that in its push toward digital, the company had moved away from wholesale a little further than it intended. Six months later, he was replaced by the same Elliott Hill who had told investors about the 40 partners in 2017. That December, Hill acknowledged that some partners feel Nike turned its back on them, and that prioritizing digital sales had hurt the company’s entire sales system.

Nike began returning to retailers back in 2023, when it restored its relationship with Foot Locker and returned to DSW and Macy’s. In 2025, it announced its return to Amazon. Wholesale revenue has since recovered to its 2023 level.

But the stock kept falling and, according to Fortune, lost more than another third between the start of 2026 and September alone. So returning to the shelf did not stop the crisis.

Distribution Is a Major Cause, but Not the Only One

Of course, distribution alone cannot explain all the problems. Sales in China, according to Reuters, have been falling for nine straight quarters. Tariffs, by Nike’s own estimate, added about $1.5 billion in costs for the year. Management acknowledges a lack of new products and a reliance on classic models. And Mark Ritson, in his analysis, names four strategic mistakes by Nike, of which the retreat from wholesale is only one.

Exactly how much of the decline distribution explains cannot be worked out from public data. What is known is that Nike deliberately cut the number of places where it can be bought, that most of the revenue decline came from the channel it bet on, and that two CEOs in a row acknowledged the move went too far.

What to Take from This for Your Own Business

Distribution is a brand asset. By cutting it, a company loses part of its physical availability, and that loss must be weighed against the gain in margin.

A company’s own channel complements broad distribution well, but it can’t replace it, even for a brand of Nike’s scale. So its share of revenue says little about success, and the numbers worth watching are total revenue, penetration, and market share.

One more thing. A shelf is easy to give up but hard to win back. Nike has been rebuilding wholesale since 2023, and its total revenue is still lower than it was then. Ultimately, the choice of sales channels determines how many buyers get a chance to choose the brand at all.

inseed.agency is a strategic digital agency. If you want to assess how sales-channel decisions will affect your brand’s availability, get in touch with us.