David Rosenthal: observation

Transcript context

…It feels like basically inventing sports marketing. There's a nascent idea of athlete sponsorship at the time, but this is the invention of it as we know it today. All athletic brands are defined by athletes, and this is really the first instance. Yes. That's part one of just the brilliant restart up of the Nike startup playbook that Phil puts together here. Part two, equally brilliant and innovative. He comes up with an idea for what he calls the Futures Program. The way retailing worked back then—Nike had their own stores always, but they also sold through retailers, of course—the retailer's would place orders with Nike to buy the shoes, then they would resell them at retail, and then they would pay after they got the inventory. This is how retail works. This is the law of the land, not the official law, but the way it all works. Phil comes up with the idea because remember, he's got the Nissho Iwai partnership, but financing is still, he's scarred by this. He goes to the retailers and says, if you commit and pay for your orders six months in advance, Blue Ribbon will give you a 7% discount. And we're going to call this the Nike Futures Program. He's essentially moving his financing from banks and Nissho Iwai over to his retail partners, to his customers. The retailers, of course, tell him to take a hike at first, but then the waffle trainer comes out. They can't make enough of them, and retailers can't get enough of them. The only way that they can get the waffle trainer, sweet, sweet inventory, those delicious waffles that they want, is to sign up for the Futures Program. This really starts Nike down a path of their distribution strategy being a wholesaler. They sell to retail chains. For decades, starting here in the early 70s. They are predominantly someone who reaches their customers through an intermediary, through retail.…

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