FuelBand Won the Sprint, But It's Not Going to Win the Marathon

Nike Needs To Stick to Its Core Mission, Despite Success With Wearable Tech

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With the unfortunate layoffs of some of its wearable hardware team last Friday, Nike inadvertently may have created a new Hallmark holiday for others. While Nike later said it would keep supporting its FuelBand SE model and release new colors, Nike's long-term commitment to tech hardware seems to be in doubt.

And that means fewer marketers will find themselves in a meeting getting pitched on some outlandish idea where the crux is "Here's how your brand can be more like Nike," accompanied by a slide of the FuelBand.

You know what happened to those cutting-edge Nike folks who were making your brand seem insufficiently forward-looking? Many are looking for their next gig. I don't mean to be callous; believe me, similar gigs are there for them -- and perhaps at better-suited companies.

Nike invented the first household brand name in wearable technology before practically any layman knew what a wearable device was. Yet Nike couldn't continue this indefinitely. Nike earned $25 billion in revenue in 2013; Facebook is willing to spend nearly $20 billion on buying a mobile app alone. FuelBand was designed to win the 400-meter dash, not the marathon.

To understand Nike's challenge, check the Google Trends graph for FuelBand versus Fitbit. Especially interesting is what happened in January over the past three years, during the Consumer Electronics Show. Around CES 2012, FuelBand interest spiked, almost keeping pace with the buzz starting to build around Fitbit. Come CES 2013, FuelBand searches were stagnating, while Fitbit was surging and had more than 3.5 times the FuelBand interest. Come CES 2014, FuelBand was cresting from the 2013 holiday season, yet FitBit had eight times as much interest. And Fitbit is just one of FuelBand's competitors.

CES 2014 was a landmark event for another reason. One of the most important announcements there came from Tory Burch, which teased a new accessory collection for Fitbit Flex. Tory Burch is making the Fitbit more fashionable. Nike's options are limited here, as it must support FuelBand over any other technology. If FuelBand can't iterate and innovate as fast as other products, then Nike's iconic swoosh is stuck on a losing player. Nike is a brand that wants to find the next Tiger Woods or Michael Jordan, not the next Tim Tebow.

What may have tripped up Nike is its own mission statement, which says Nike is here "to bring inspiration and innovation to every athlete* in the world" (*if you have a body, you are an athlete). If Nike's in the innovation business, and its target market is everyone, the FuelBand makes sense. The only way it seems it could justify shuttering FuelBand is by saying it's no longer innovative. But I'd argue that some aspects of the FuelBand -- especially in its design -- are far more innovative than Fitbit Flex and other competitors.

What Nike ultimately had to accept is that while it says it's in the innovation business, it's mostly in the footwear and apparel business. Every brand grapples with this, and many have lofty ideals, but consumers are more practical. People can get inspiration and innovation from a lot of brands, from Pope Francis to Google. People can only get those comfortable, well-engineered, swoosh-sporting sneakers from one source.

I've dealt with this internally, too. During a brand positioning discussion for my agency, one colleague said we should be in the business of changing the world. And I had to be the jerk who said, "That's not what we do. We help corporations sell mouthwash, booze and credit cards." We have to be honest with ourselves about what business we're in if we're going to earn the trust of our customers.

And that, ultimately, is what brands can say to agencies that have been trying to come up with the next FuelBand. It's the brand manager or CMO who needs to say, "Sorry, we're not in the innovation business." Stand up for the business you're in. There's no time to humor another agency creative who wishes he or she were in the business of changing the world.

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