No. 309: Hudson Yards is Not For Everyone

Non omne quod nitet aurum est: all that glitters is not gold. This is a widely used line derived from Shakespeare’s The Merchant of Venice – a story of a merchant who must default on a loan. To understand the new era of high-visibility retail developments, you have to understand the times that we are living in. The 41 page report by the Schwarz Center of Economic Policy Analysis (SCEPA) details the funding initiatives, costs, and opportunity for Hudson Yards. There is a passage that summarizes the gist of the entire document:

The cost overruns and revenue shortfalls of the Hudson Yards project stem from the realization of financial and economic risks common to large development projects. While well known in multi-faceted development projects, the cost of these risks were not included in the project’s budget, leaving the city to bear the responsibility if they materialized.

The start of the one million square foot Hudson Yards development was billed “the largest private real estate development in the United States by square footage” [note]. In the midst of 2008’s Great Recession, developer Tishman Speyer ceded the rights to the property to developer and Miami Dolphins owner Stephen A. Ross, the magnate who also owns a sizable stake in Gary Vaynerchuk’s 880 person Vaynermedia agency. While completing the deal, Ross reduced his company’s risk by introducing stalling mechanisms to give the economy time to recover before the clock began on the costly project. The rights were purchased during the 2008 downturn and the development team broke ground in 2012.

The idea of Hudson Yards was born out of recession. This is important to note, 2008 was a frightening time for retailers and consumers. The previous downturn allowed direct to consumer brands to take advantage of the physical retail shortcomings of incumbent product marketers.  Like many of the higher end mega-developments that are now in the works, Hudson Yards is both a barometer for our consumer economic health and a localized antidote for the next downturn. Originally intended to attract commercial partners with tax benefits, Ross’ development eventually extended the commercial benefits package to retailers – incumbent and challenger brands alike. These brands include: Rhone, Mack Weldon, Milk & Honey, Stance, B*ta, Batch, M. Gemi, and a yet-to-be-announced deal with Wone. On page 18 of the New School’s SCEPA report:

Another factor feeding the revenue shortfall was the IDA’s decision to extend PILOTs to retail development projects. With PILOTs were originally designated only for commercial developments, the extension of the tax break for retail development was not included in C&W’s 2006 revenue projections.

New York’s newest mini-city is just one of a number of developments popping up around the country. But Hudson Yards is perhaps the most vulnerable; it’s an experiment with the most to lose. Far from a private development, a city rife with public transportation and infrastructural shortcomings has and will be footing the bill for the one million square foot property. This tax burden is distributed to all New York residents but the development will directly benefit upper-middle class residents and visitors alike.

What Hudson Yards represents

In the The First Roundtable, 2PM explained:

Physical retail is rebounding because DNVBs are achieving great success with shoppers that are moving up market or, sometimes, down market (Boxed, Brandless, Dollar General). Additionally, data-driven customer acquisition is extending to physical retail. This is making it easy to account for investments into physical marketing and retail.

Hudson Yards is not for everyone, despite Ross’ recent, disingenuous public relations attempts. This fact should be by design and it likely would have been had the deal gotten done without taxing the middle class. A recent Forbes article mentions the high-end retailers like Cartier, Dior, Fendi, and Michelin-starred restaurants. And the financial service providers like BlackRock and Point72. It goes on to cite a range of $2 – $30 million for condos on the property. Ross’ wager is one that brands, developers, and retailers should take note of. This is one of the first developments to be built after the lessons of the last downturn: the middle class withers, the poor get poorer, and the wealthy remain so.

America saw the growth of middle class malls for nearly 60 years and those malls are now failing. Hudson Yards is built for a polarized consumer economy where middle class retail is penalized for their lack of focus. And the timing couldn’t be better for the brands in the direct to consumer economy who focus on upper-middle to upper class consumers.

The Overton Window

In a masterful article chock full of polymathic thought, David Perrell weaves a narrative that blends political, economic, and psychological research. His flowing essay connects the evolution of mass media, commerce, higher education, and politics in a way that is rare for publishers today. The three pillars that he discussed: commerce, higher education, and politics. One line summarizes the entire piece:

Commerce and media are interdependent. You can’t understand commerce without understanding the media environment.

This is a capstone belief for 2PM readers. Perrell goes on to discuss the current vulnerability of many traditional CPG brands who’ve – thus far – depended on mass media and traditional ad buying to generate demand for their product. At first, the rise in availability of information gave rise to challenger brands. For a window of time, obscure brands could compete with larger conglomerates by pursuing 1:1 relationships with consumers.

This era of connectivity gave rise to brands who took advantage of an Overton Window-like time for the consumer web (2007-2016). As diffusion increased, so did the difficulty in which brands met when acquiring new customers (rising CAC). In one essay, Perrell directly communicates the collapse of the Overton Window in the context of American politics. But unbeknownst to him, he also communicated the collapse of the Overton Window in the context of DTC retail and the advertising that propelled it. Compare the two paragraphs in What the hell is going on?

(1) The media’s monopoly saw its first cracks with the rise of cable, and now, due to the internet, the Mass Media environment is going to crumble. The internet — where everyone can find, select, edit, and distribute content — has already left its mark. The Overton Window has been shattered. The media is no longer a barrier against diverse thought and opinion.

(2) By creating unlimited shelf space and reducing information asymmetries, power in the internet age is shifting from suppliers to customers. The world is increasingly demand driven. Customers have more choices than ever before. They can buy anything, at any time. Through the internet, brands can serve a long-tail of unmet consumer needs, which weren’t served by big box retailers.

The web democratized information but, also, pop cultural and socio-economic distraction. We used to watch the same television shows at the same hours of the night. We’d view the same advertisements. And the America of late was a mostly centrist-thinking political body. The ideas to the left and to the right of the Overton Window went mostly unobserved – for a time. Today, the areas outside of the window dominate our conversations. As such, America used to vote for candidates that represented ideas within an Overton Window of acceptable belief. As 2016’s political race would suggest, America is more polar than ever. This one part of American consumerism is indicative of the whole.

At first, commoditized information helped challenger (DTC) brands compete against incumbents. But costlier advertising and distracted consumers are tipping the scales to incumbent forms of retail and brand promotion. For developments like Hudson Yards and other efforts by developers like Macerich, the bet is on the need for physical retail to acquire customers. In smaller markets like Columbus, Ohio – developments, like the Easton Town Center, have proven the appeal of this elegant simplicity. And DTC brands have flocked to this premium real estate.

Physical Retail 2.0 (PR2.0) will be defined by the public / private partnerships like the Hudson Yards development. With the consumer web becoming louder, more volatile, fragmented, and less reliable for pure direct-to-consumer (DTC) brands, PR2.0 is two bets: (1) traditional retail infrastructure and attracting DTC brands to develop new behaviors for higher-end millennial consumers (2) consumer web fatigue. In a recent conversation with Digiday, here is what Ken Morris of Boston Retail Partners told Hilary Milnes:

Retail has needed to change, and brands that are popular online are forcing that change with temporary stores and leases that require flexibility. Landlords and developers are no longer in a place to turn that down, and if you need proof, look at Hudson Yards. The most massive retail development made adjustments to get digitally born brands on the floor. They drive foot traffic, point blank. And malls need foot traffic.

Hudson Yards: the present, not future

For Stephen A. Ross’ development to withstand traditional market forces, it will have become a mecca to upper-middle to upper class consumerism. But while many publications are posing the question: will it work? A better question is: how soon? The $20 billion dollar retail project was funded by taxpayers to serve a greater purpose than the leisure and window shopping that’s been reported on. Hudson Yards was imagined at the end of a bull run and built to survive the next. Founder of Stray Reflections, a global macro research advisory, Jawad Mian recently published a series of tweets on the upcoming period of IPO liquidity for Silicon Valley investors.

In the thread, he is speaking directly to skeptics of our system of privatized high growth companies. Companies that IPO later in their cycles than earlier ones of previous generations and he raises some serious concerns. With surgical precision, he narrates through the credit bubble of 2007 and the commodity bubble of 2011. Then he notes the speed upon which unicorn investments (valuation of $b+) are crowned today: Bird, the scooter company, became a unicorn in less than 12 months. He cites the 10-fold increase in VC-stage investment by mutual funds between 2016 and 2019.

And lastly, he cites Saudi Arabia’s late-stage presence in US startups to the tune of $15 billion since mid-2016. Softbank’s Vision Fund, a home to some of SA’s sovereign wealth, has nearly $100 billion under management. It is no surprise that America is home to over 250 unicorns. In contrast, China is home to 168 unicorns worth $628 billion on an aggregate $11 billion in Chinese investment since 2000.

With a highly influential IPO window on the horizon, Mian’s concerns are founded. What happens if the values of Uber and Lyft don’t hold up in the public market? And how would their market vulnerabilities affect the growing influence of foreign, late-stage investment into American tech companies? Mian concludes with parallels from 2000, 2007, and 2011 but regardless of the successes of decacorn tech stocks, it is easy to see that late-stage investments are masking vulnerabilities in the private-to-public pipeline. This while the entire concept of the gig and freelance economies raise sustainability questions. For developments like Hudson Yards, the aim is to be above these pesky questions.

A 2PM reader recently shared a story about a new resident of a Hudson Yards condominium. His two bedroom apartment needed room for a couple and their two dogs. He came to find that the space was inadequate for his family and his belongings – so he also bought a unit across the hall. Hudson Yards was not designed with everyone in mind. And the financing of the property is so entangled that – while it was built for the higher class – everyone will eventually play a role in propping it up (if they haven’t done so already).

In this way, this ostentatious development is as close to recession proof as one can be. This, thanks in part to the influence of the challenger brands and their cohorts of wealthier millennials. As the consumer web continues to diffuse conversations, preferences, and opinions beyond the Overton Windows – Hudson Yards and the developments that will mimic it may become the safest places for DTC brands to expand in America’s number one retail market and beyond. But all that glitters is not gold. Hudson Yards was designed to become a haven for those who have, the types of consumers who can thrive throughout the natural cycles of our market-driven economy. Few retail developments can say the same.

Read Brief No. 309 here.

Relatório de Web Smith | Por volta das 14h

Additional Reading: 

(1) Stephen Ross is building New York City’s Next Must-See Destination 

(2) Private Equity Firm Eyes China Malls

(3) The Mall is Making a Comeback

(4) Hudson Yards isn’t the future of retail

(5) Billionaire Stephen Ross believes that Hudson Yards is For Everyone 

(6) Hudson Yards: open to all but not for all

(7) Manhattan’s Opulent New City 

(8) The Cost of New York City’s Hudson Yard’s Development [41 page .pdf]

No. 308: Marcas antigas podem redefinir o DTC

Sobre a Procter & Gamble e por que ela deve investir ainda mais no varejo físico. Se a convenção Shoptalk de 2019, em Las Vegas, for uma indicação, a representação da marca pode marcar um afastamento das marcas autossustentáveis e diretas ao consumidor (DTC). A concorrência herdada de bens de consumo embalados (CPG) parece recuperar o ímpeto que a era DTC prejudicou. Este ano, as marcas DTC proeminentes estão em menor número e mais distantes entre si. No Shoptalk, a Bonobos está tradicionalmente presente, mas a marca agora é propriedade do Walmart. O Dollar Shave Club, outro pilar, agora é propriedade da Unilever. E o Trunk Club agora é de propriedade da Nordstrom. Isso é simbólico, por si só. Como muitas marcas no espaço DTC, elas dependem cada vez mais dos canais de varejo tradicionais para atingir a massa crítica.

Entre os participantes do Shoptalk deste ano, há menos representantes das cerca de 100 principais marcas de DTC. Aqui está uma pequena lista das marcas digitalmente verticais presentes: Allbirds, Brandless, Boxed, Dirty Lemon, Everlane, Frank + Oak, Glossier, Harry's, Mack Weldon, Mizzen + Main, Native Deodorant (Procter & Gamble) e Tuft & Needle. Dessas empresas, poucas evitaram o varejo por atacado e menos ainda se afastaram do desenvolvimento do varejo físico. Embora essas empresas tenham se movido sobre o cenário tradicional com grandes parcerias de varejo, aquisições ou crescimento do varejo físico, os poderes tradicionais têm sido lentos para dar conta das mudanças resultantes.

No Member Brief mais recente, publicamos o Relatório de metas:

A Target, o Walmart e a Amazon (TWA) estão enfrentando a comoditização das vendas on-line de produtos alimentícios, à medida que novos concorrentes continuam a impedir o crescimento da capitalização de mercado da TWA. Para enfrentar esses desafios, cada varejista está adotando comerciantes de produtos e marcas DTC como fontes de novos negócios e clientes fiéis. Em cada caso, a TWA está se posicionando como um lar prático para marcas de moda, beleza, eletrônicos e estilo de vida. A Amazon está agregando. A Target está fazendo curadoria. E o Walmart está adquirindo. 

Embora a grandeza das marcas DTC possa estar diminuindo, marcas antigas como a Unilever e a Procter & Gamble (P&G) estão reinvestindo em soluções da era DTC. Entre 2010 e 2019, as marcas desafiadoras de CPG estabeleceram um impulso que as empresas tradicionais tiveram que combater. Até o momento, as empresas tradicionais ainda não montaram uma verdadeira ofensiva contra as marcas desafiadoras e os varejistas que as cortejaram. De acordo com a Happi Magazine, a P&G é responsável por 18% das vendas do Walmart nas lojas. Esse número é superior aos 15% registrados em 2016. Esse número cresceu, até agora, apesar do grande investimento do Walmart em operações de DTC, parcerias exclusivas de CPG e desenvolvimento de marcas próprias.

Dados da 2PM: P&G CoNTEXT

Receitas dos principais fabricantes de CPG de beleza em bilhões (2016)
Previsão de EBITDA da Procter & Gamble Co em milhões (2018-2020)
Valor da marca das principais marcas de cuidados pessoais em todo o mundo, em milhões (2018)
Vendas líquidas da Procter & Gamble em todo o mundo por segmento de negócios em milhões (2014-2018)

A P&G está em uma encruzilhada. A marca de consumo de 182 anos obteve sua maior receita em 2012 e ainda não atingiu esse patamar desde então, embora tenha conseguido cortar despesas e aumentar os lucros. Mesmo assim, o valor do lucro líquido da P&G em 2018 foi o segundo mais baixo dos últimos 13 anos. Essa posição reduzida corresponde ao crescimento do setor de varejo DTC. Esse crescimento, juntamente com o desenvolvimento contínuo de marcas de CPG de marca própria bem comercializadas em grandes varejistas, resultou em uma maior substituição de produtos tradicionais de comerciantes como a P&G e a Unilever.

Redefinindo o Direct to Consumer

Uma apresentação de sua oportunidade de franquia

Há uma oportunidade notável para a P&G alavancar seus produtos de maneiras novas e inventivas. A empresa sediada em Cincinnati lançou recentemente a Tide Cleaners, uma franquia de experiência de varejo e centro de serviços para lavagem a seco. Os franqueados ganham acesso à marca mais reconhecida em produtos para o lar e a Tide obtém um novo canal de varejo para vender produtos, criar afinidade, aumentar a publicidade no topo do funil e obter fluxos de receita orientados por serviços.

A Tide, uma das marcas mais reconhecidas da P&G, foi reaproveitada para apresentar um serviço de lavanderia sob demanda. A Tide Dry Cleaners permite que os clientes selecionem o serviço desejado no aplicativo, paguem e, em seguida, deixem suas roupas nas lojas para que sejam retiradas quando forem notificados. Ao retornar, os clientes encontrarão suas roupas lavadas, secas e dobradas. Essas vitrines de lavagem a seco agora funcionam em Cincinnati, Boston, Chicago, DC, Filadélfia, Denver e Dallas. Essa nova experiência de varejo levanta a questão: por que não expandir para o varejo vertical com vitrines físicas "Everyday"?

Um exemplo dos esforços DTC existentes da Procter & Gamble

Sobre a "P&G Everyday" e a defensibilidade. Em 2018, a Harry's e o Dollar Shave Club (Unilever) conquistaram mais de 12% da participação de mercado da Gillette graças ao seu modelo direto e às parcerias com varejistas. A Procter and Gamble se beneficiaria ainda mais com o desenvolvimento de um modelo de varejo físico DTC. Ao possuir suas experiências "cotidianas" na loja, a P&G conseguiria atingir alguns objetivos que seriam úteis à medida que a Amazon, o Walmart e a Target continuassem a desenvolver marcas concorrentes de produtos para o lar para atender às suas próprias preocupações com a lucratividade.

  • As lojas físicas poderiam reduzir a dependência do Walmart e da Target como canais de vendas primários, ao mesmo tempo em que dariam à P&G mais influência para negociar melhores termos e garantias de marketing na loja na Target e no Walmart ou na Amazon (atualmente um parceiro de publicidade).
  • Ao ir direto ao consumidor, essas lojas próprias reduziriam a dependência da P&G das relações de atacado, promovendo margens mais altas por venda.
  • Com lojas próprias, a P&G seria capaz de lançar seus próprios serviços de entrega e operações de última milha.

Embora "direto ao consumidor" seja a frase da moda desta era no varejo, as lojas físicas estão novamente se tornando componentes essenciais em um ecossistema saudável de aquisição de clientes. No entanto, os fabricantes de marcas não podem mais contar com os grandes varejistas para operar da mesma forma que faziam antes dessa era. As marcas digitalmente nativas estão priorizando o varejo físico para reduzir os custos de aquisição de clientes e criar fidelidade de longo prazo. Como resultado dessa mudança dos varejistas que priorizam a Internet, os grandes varejistas, como Walmart e Target, priorizaram parcerias e aquisições com essas marcas para levar os clientes às suas lojas.

O Walmart Inc. espera aumentar os lucros cobrando pela publicidade na loja e on-line de alguns dos maiores fornecedores do varejista, incluindo a Procter & Gamble Co.

A P&G pagará para anunciar nas lojas?

A era DTC do varejo começou a colocar comerciantes como a Unilever e a P&G em desvantagem. Há apenas dez anos, a P&G era proprietária dos corredores de produtos de higiene e beleza em lojas como a Target. Em algumas lojas, as instalações da Harry's e da Flamingo são as mais visíveis. Em outras, o desodorante da Native ou os travesseiros da Casper. Como os varejistas terceirizados, como o Walmart, reavaliaram o espaço nas prateleiras e o marketing nas lojas, a P&G começou a perder o controle da apresentação de seus produtos. Mas seu compromisso com os modelos de negócios diretos ao consumidor é um sinal de que essa desvantagem pode ter vida curta.

Além do sistema de franquia da Tide Dry Cleaner, a P&G está fazendo experiências com marcas digitalmente nativas. Além disso, a empresa continua a testar novos formatos de varejo on-line com o BigCommerce. Mas é o formato de loja direta que poderia oferecer crescimento do varejo físico e defesa da marca em meio à evolução contínua do varejo. Uma loja própria da P&G não seria apenas um lugar para manter relacionamentos com clientes antigos. Ela serviria como um espaço onde as novas marcas digitalmente nativas da P&G poderiam testar e adquirir novos clientes. O varejo direto ao consumidor não se limita aos canais on-line, os DNVBs estão inovando dessa forma. Profissionais de marketing como a Unilever e a P&G podem fazer o mesmo.

Leia a curadoria do nº 308 aqui.

Relatório de Web Smith | Por volta das 14h

No. 307: A Whirlwind Week for Nike

One of the biggest questions asked this week: what will Nike do next? In just seven days, Nike landed three major stories. Known to make the best out of controversial situations, Nike’s biggest brand test may come in early summer 2019. That’s when the brand will be tasked with spinning one of the most embarrassing failures in its recent memory. For Nike – a brand that has positioned itself as a sociological compass as of late: this week began as a test of their evolved brand position. Nike has tended to the question: “how do we address what others have broken?” This week, they were forced to ask: “how do we address what we’ve broken?”

It’s been a whirlwind week for Nike. Five days ago, the biggest amateur basketball star since Lebron James was injured after his shoe malfunctioned in a game. The sporting event was in such high demand that tickets were for sale on the secondary market for nearly $2,900 per seat. Students waited the customary 39 days outside of the Duke arena for their coveted seats. And President Obama made a rare, sideline appearance with his custom Rag & Bone “44” aviator jacket and black Allbirds. When Zion Williamson went down with his knee injury, a television camera panned to the former President who is seen pointing with concern, “his shoe broke.”

It’s been a whirlwind week for Nike. Four days ago, the biggest story in recent NFL history settled an alleged collusion case against the league. The former quarterback’s case against the league’s team owners. The case was said to have some merit and it’s rumored that the cash value was substantial enough to please both sides of the table. The case was settled with complete confidentiality, paving the way for the small chance at a return to the gridiron. Colin Kaepernick, who’s announced signing by Nike caused waves throughout all of sports, released his first product with Nike on the day after the conclusion of his lawsuit. Now a symbol in and of itself, Nike’s simple, generic black jersey with his former number sold out instantly.

It’s been a whirlwind week for Nike. Just one day ago, arguably the greatest athlete of all time voiced and starred in a new Nike ad. Serena Williams narrated over just a few of the recent, iconic moments for women in sports. It was an emotional advertisement directed by Kim Gehrig, the same woman who directed the recent Gillette ad that called toxic masculinity into question. While the Gillette ad was met with, both, praise and disgust – the Serena Williams-narrated project was widely loved. In a matter of hours, the ad was reportedly watched over 17 million times across Facebook, Instagram, Youtube, and Twitter. Featuring Simone Biles, Chloe Kim, Ibtihaj Muhammad, and several members of the U.S. Women’s National Soccer Team, some would argue that Gehrig’s ad was the star of the Oscars – the ad’s broadcast premiere.

In our Member Brief entitled “The Nike Report“, I wrote:

Nike wants to own iconography. And in sport, that also means sports history. For a company that wants to own history, they own very little of it today. If you’re a history enthusiast, you can watch clips of Jesse Owens in 1936 Berlin exhibiting heroics in first-generation Adidas track spikes, hand delivered by Adi Dassler. Or you can watch Muhammad Ali swinging at other boxers with Everlast on display. Now, Under Armour owns his rights in a protective attempt to prevent Nike from using their marketing wizardry to build their cache. And in a similar attempt, Adidas owns the rights to Jackie Robinson.

Nike has always been in the business of iconography: Pre, Jordan, Bo, Tiger, Serena, Agassi, Kobe, and now Lebron. But as the brand’s stock trades at historic highs, the Portland company seems to have its eyes set on more. It’s emphasis has shifted towards its role in sports history, supporting people, social movements, and milestones that may not be as popular in the moment as it will be once the history shifts. History has a way of changing things. The way that consumers view things today may be different in a decade or two. The brand seeks to be on the right side of history – as long as it is or will be profitable. Careful capitalism, if you will.

The Zion Debacle

Nike’s week began with a shoe malfunction during one of amateur sports’ biggest stages and ended with a new ad that made consumers temporarily forget about the high profile injury. But from all accounts – Zion Williamson, himself, is undeterred. Several credible sports news outlets are on record with his plan on returning to the team. In a recent San Francisco Chronicle article, “Why Zion will keep playing at Duke“:

Why? Because he’s a competitor, a joyous athlete having the time of his life. Because he couldn’t imagine quitting on his teammates. Because the NCAA Tournament is one of the grand theaters of sport, giving him exactly the exposure he needs going into the draft. And because there’s nothing more ludicrous than the perception that every high-profile freshman is really just a dimwit who never goes to class and spends 14 hours a day on the basketball court.

Unlike many potential first round draft picks, Zion’s earning potential may actually rise if he closes out his “one and done” season in championship fashion. His brand equity has rare potential. Marketers like Adidas, Nike, and Under Armour pay a premium for athletes who are more than the game that they play. Listen to Zion in a post-game interview. He’s as All-American as a kid can be. From his mannerisms to his charisma and book smarts, he has the potential to transcend the sport that he plays. Much like a few of his predecessors.

Below, is a sortable breakdown of the NBA’s top stars and rookies. Williamson currently ranks number 15 among the combination of high powered NBA veterans breakout rookies. Two of his metrics surpass the median social media interest of the group.

[table id=38 /]

This begs the question, which shoe brand will land Zion? By most accounts, Nike will be the shoe brand that markets a fortified signature shoe for the 6’7″ 290 pound, 19 year old phenom out of Salisbury, North Carolina. Both Duke and UNC are deeply entrenched in Nike lore. Michael Jordan’s brand is adored at his Chapel Hill alma mater. And no college coach in America is paid more by Nike than Duke’s Michael William Krzyzewski.

According to Patrick Rishe, a sports business writer for Forbes, Williamson is looking at a shoe endorsement deal that will yield an annual value of $9-10.5 million. This figure would place him seventh overall, far surpassing the NBA’s existing rookie deals – even the highly inflated Puma deals. And ESPN’s Dan Le Batard was quoted as saying that Williamson’s brand and visibility is worth a rookie contract worth $80 million.

The story of the week was about Nike’s short term recovery. While the brand temporarily lost $1.1 billion in value after the injury, the stock’s devaluing was a red herring of sorts. At the surface, pundits and casual observers viewed the malfunction as a gift to Adidas, Puma, or Under Armour. Summer 2019 is shaping up to another example of Nike’s masterful messaging. All data and smart commentary points to a different conclusion.

Footage of this product malfunction will be on repeat for as long as the young athlete is in the spotlight. It’s part of his Williamson’s story. Nike’s next shoe, specially designed for him, will likely be marketed as ‘fail proof.’ It will be a product advancement and a symbol of material progress. If things go their way, Nike will engineer first shoe made for a giant who plays with the explosive leap and versatility of a player 100 pounds lighter and five inches shorter. Fortunately for Williamson, it’s in Nike’s best interest to offer him one of the richest rookie contracts in its history.

Read the No. 307 curation here.

Relatório de Web Smith | Por volta das 14h