Don’t Be Deceived by “Categories”! Warnings from Nike, Nivea, and Google: Your Brand May Be Engaging in “Chronic Suicide”
Hello everyone, I’m your financial journalist. Today, we’re going to discuss a concept that has captivated many business owners and marketers for over two decades – “categories.”
You’ve certainly heard terms like “being the number one in a category,” “occupying the consumer’s mind,” or “leading in a particular category.” It sounds solid, reliable, and safe. But today, I have some bad news: for a truly effective brand strategy, “categories” are a poor starting point – even a huge trap.
Why do I say that? Because global giants like Nike, Nivea, and Google have all fallen into this same trap. They are all top performers within their respective categories, with large market shares, high visibility, and extensive distribution channels. So why have their performance declined? Why are customers starting to drift away?
The reason is simple: consumers don’t think in terms of categories; they think in terms of needs.
To make this clearer, I’ll break down the main arguments of this article into five parts, showing you how seemingly invincible brands can lose their way in the fog of category-based thinking.
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Part 1: The Critical Shift from “Sales Thinking” to “Need Thinking”
The core argument of this article is quite sharp: Categories are merely classifications created by manufacturers for ease of management, accounting, and identifying competitors; but what consumers really care about are their needs.
- From a category perspective: I make sports shoes, and my competitors are Adidas and Nike. My goal is to sell more, at a lower price, and have a wider distribution.
- From a need perspective: I want to go running, I want to look good, or I want to sit at my desk for long periods without getting tired. I’m looking for shoes that solve my problems – whether they’re sports shoes, leather shoes, or slippers.
When consumers’ needs change, or the ways to meet those needs change, if you stick rigidly to your category, you’re blind to the market.
The article highlights two key concepts to explain this:
1. Demand Spaces: The real goals or problems consumers want to solve (e.g., “improving sleep,” “finding answers quickly”).
2. Control Points: Who influences consumers’ thoughts from the moment they have a need until they make a purchase – the brand itself, KOLs (influencers), AI, or physical stores?
In conclusion, brands should focus not just on the shelves but on people’s hearts and the decision-making process.
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Part 2: Nike’s Mistake – Losing the Opportunity to “Discover” New Customers
Many people think Nike’s poor performance in recent years is due to poor digital transformation or a failed DTC (Direct to Consumer) strategy. But the real issue was that Nike got the control points wrong.
- What Nike wanted: More profits, so it invested in its own app, website, and direct stores. The logic was simple: if I can sell directly to consumers, why share profits with retailers like Foot Locker?
- What Nike overlooked: Physical stores are often places where consumers discover and compare products. When Nike reduced its presence in these stores, it gave up the opportunity for customers to discover new products and make comparisons.
- Results: Nike’s total revenue declined by 10% in the 2025 fiscal year, with its digital segment suffering a 20% drop. In 2024, Nike reversed this trend by reestablishing relationships with retailers and bringing products back to multi-brand stores, especially in the Chinese market.
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Part 3: Nivea’s Struggle – Still Reliable, but Losing Customers Due to More Specific Needs
Nivea’s story is more subtle. It didn’t make any major mistakes; it just stagnated while the world changed.
- Nivea’s advantage: For decades, it relied on being “reliable, easily accessible, and for daily skincare.” Its blue can cream was widely available and affordable, making it a trusted choice for mothers.
- Changing consumer needs: Today’s younger consumers, especially those interested in skincare, search for specific solutions (e.g., “how to reduce spots,” “how to repair damaged skin,” “what’s suitable for sensitive skin”).
- Who took control? Dermatologists, ingredient experts, and brands specializing in specific solutions (e.g., Eucerin, Aquaphor) gained more influence.
- Data: Nivea’s growth rate was only 0.9%, while brands focusing on specific skincare solutions grew by 11.7%.
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Part 4: Google’s Dilemma – AI Taking Control of the Search Process
Nike and Nivea face traditional industry challenges, but Google’s story illustrates the impact of technological revolutions.
- Google’s dominance: It was the undisputed king in the “search engine” category.
- The true purpose of searching: Consumers use Google to find information, solve problems, and make decisions.
- AI’s impact: AI has changed the control points. Instead of users searching and then gathering information themselves, AI now provides complete solutions.
- Consequences: If consumers become accustomed to asking AI for direct help, Google’s role as an information source is weakened.
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Part 5: The Illusion of “Availability”
“Availability” is a metric that gives brands a false sense of security. It measures efficiency in established scenarios, but what if those scenarios change?
- Examples: Nike’s strong brand presence and wide distribution didn’t help it retain customers when they compared products in stores; Nivea’s ubiquity didn’t stop it from losing business to more specialized brands; Google’s low entry barrier was overshadowed by AI’s ability to provide complete solutions.
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Part 6: The Truth About “Availability”
- What is availability? It’s the ease with which consumers can think of your brand in a given situation or find your products.
- The problem: These metrics only reflect efficiency in existing scenarios. What if consumers use new channels (e.g., live streaming, AI) to make decisions?
- Implications: Brands need to move upstream in their strategies, focusing on understanding consumer needs and identifying new control points (e.g., KOLs, AI, or other channels).
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Conclusion and Action Steps
This article isn’t meant to deny the value of categories. They’re still useful for financial analysis and internal communications. But when it comes to strategic planning, they can be a dangerous blind spot.
As a brand leader or entrepreneur, ask yourself these three questions:
1. Are your needs and solutions still aligned with consumer needs? Are your products still meeting customers’ real problems?
2. Have the control points in your brand’s hands shifted? Who influences the decision-making process from the moment a consumer has a need until they make a purchase?
3. Are you being misled by availability? Is your market share growing, but is customer loyalty declining? Why do customers buy your products?
Remember: Categories help you understand competition, but it’s the real needs of consumers that define the future of your brand. Don’t just focus on your current position; think about what customers want and who’s influencing their decisions.