Nike is one of the largest clothing brands in the world. Over the years, it has stretched its outreach further than the confines of athletic wear. Along with its success, Nike prices have risen.
Nike customers may become upset or confused when they notice that many Nike products seem more expensive than they used to be. Some of their best products are not affordable. Why is Nike so expensive?
Why Is Nike So Expensive?
1. Shoe Technology
One of Nike’s most popular products is its shoes. Over time, Nike shoes have become much more expensive than they used to be. This is because Nike has developed enhanced technology to create better shoes.
Different Nike shoes have different advantages. Training shoes can be built with certain aspects like Nike React to improve performance, while lifestyle shoes may simply come in more exclusive colorways.
As you will learn below, some Nike shoes even have Bluetooth capabilities that allow you to connect them to your phone. Nike’s advancements in shoe technology allow it to raise the retail price of its products.
2. Electronic Advancements
They have Bluetooth shoes that lace themselves with the press of a button on your cell phone, smartwatches in collaboration with Apple, and the Nike Training Club fitness app to help you track your progress.
Nike is no longer solely an athletic wear company. They have gone beyond manufacturing clothes and have capitalized on their success by incorporating new technology into their products.
Nike is so expensive now because they can promote products to people with different lifestyles. This allows them to expand their outreach, meet more people’s needs, and raise their prices.
3. Pristine Athletic Wear
Although Nike now represents more than athletic wear, its clothing products and shoes are excellent options for everyday use. From workout shirts to backpacks to casual sneakers, Nike produces the equipment you need.
Nike is so expensive because of the materials used to manufacture such high-quality gear for its customers. Each product is made with goals in mind to appeal to anyone who buys it, and Nike aims to meet said goals.
More expensive Nike products contain more exclusive materials, functions, and even backstories that allow Nike to raise the price of certain products. Since they are a top provider of athletic wear, they are expensive.
4. Endorsements
A major aspect that makes Nike so expensive is its endorsement deals. Nike does an excellent job of sponsoring individual players and sports leagues to make its products even more well-known.
Nike has a monopoly over a large portion of professional sports leagues. Why you see so many Nike swooshes on professional players’ jerseys is that Nike owns the right to provide jerseys to every team.
Players also often receive sponsorship from Nike. When these players are well-known in their league and only wear Nike products, it makes Nike more recognizable and allows it to regulate its prices to its liking.
5. Collaborations
Like endorsement deals, Nike’s marketing team does a phenomenal job at collaborating with other brands to promote products. In dealing with luxury brands and more, Nike can place a much higher price tag on products.
Nike has done collaborations with luxury brands like Louis Vuitton, Off-White, Supreme, and more. It has even made a pair of shoes, the “Chunky Dunky,” in collaboration with Ben & Jerry’s Ice Cream.
With success in dealings with other brands, Nike gains popularity and can set higher prices for products made in collaboration with other well-known companies. Collaborations are huge in the retail industry.
6. Sneaker Resale Market
Sneakers’ global sneaker resale market is worth an estimated $6 billion and is expected to reach $30 billion in less than ten years. As some of Nike’s most popular products are shoes, they are a large part of this market.
Nike sneakers manufactured in collaboration with other brands, retro Nike’s that have stood the test of time, and other Nike sneakers resell for hundreds – if not thousands – of dollars online.
Nike may not typically be a part of the reselling of their previously-released sneakers, but they notice the success. Knowing the success of their sneakers allows them to raise the prices of some of their current shoes.
7. Varietal Style Outreach
Nike is also so expensive because it appeals to several demographics. Of course, athletic wear acts as the main idea behind the basis of Nike, but Nike has grown its business beyond exercise shirts, shorts, and shoes.
Some people shop at Nike for workout gear, while others are looking for casual attire. Nike has it all. Because of this, it can choose how to price certain products as more expensive than other products.
Something that many people do not know is that brands like Nike make one product and then create a slightly lesser-quality version of that product.
An initial product is more expensive than a lesser product because it may contain one or two attributes that the other one does not. This technique expands Nike’s customer base to a wider range of people.
8. Marketing Success
As has been touched on briefly, Nike’s marketing team is talented. Collaborations and sponsorships are just part of the reasons that Nike is so expensive. Advertisements play a huge role as well.
Nike advertisements push for athletes to train harder, health-gurus to continue improving, and style icons to expand their outfit choices. Nike’s famous motto, “Just Do It,” is inspirational in its simplicity.
Nike’s marketing strategy influences the public to shop at Nike, continually growing the number of customers. With more customers, Nike can raise its prices.
9. Big-Name Brand
As a result of all of the factors discussed above and the few left below, Nike has built itself to be one of the biggest companies in the world. Even if someone does not shop at Nike, they are still familiar with the products.
Big-name brands often hold monopolies over many demographics, allowing them to regulate their own prices. Nike knows people are going to continue shopping with them, so they can choose how to price their products.
Nike’s success is further developed by returning customers. Many people are willing to pay higher prices if it means that they get to wear their favorite products.
10. Limited Distribution Technique
As with any other globally-leading brand, Nike takes advantage of limited distribution. Supply and demand are very influential in pricing. People want a product, and Nike can only produce so many of the same thing.
When more people want products than there are products available, Nike can raise the prices to make its products even more exclusive than before. Products on Nike are often listed as “Sold Out” or “Out of Stock.”
When Nike releases new products – especially in the sneaker industry – they go quickly. Customers make sure to stay up to date when the products are dropping to try to get their hands on a pair for themselves.
11. Competitors
As has been mentioned, Nike has a monopoly over several demographics. In this sense, it has no competition whatsoever, so it can choose how expensive its products are going to be.
On the other hand, Nike has competitors in other fields, in which case, pricing choices can help or hurt the company. It must compete with other retailers.
However, since Nike is so well-known, keeping the high prices only makes Nike seem more exclusive rather than pushing people away to other competitors.
Conclusion
Nike is so expensive because of the popularity the company has gained since its inception. Nike produces high-quality products with enhanced technologies implemented.
Nike also has a monopoly in some industries, allowing it to establish its prices however it so chooses. When competing with other brands, Nike is popular enough that keeping high prices likely will not hurt sales.