From the Archives: Should Foot Locker Make NXN a "Team" Regional?

I saw the news this morning that the Foot Locker Cross Country Championships will be renamed the East Bay Cross Country Championships. I'm impressed that Foot Locker has continued to compete more than a decade after Nike created their NXN team championships.

I wrote the below article in 2009 for Runner's Tribe (originally titled Nike vs Foot Locker), shortly after NXN started to pick up steam and prove to be a viable competitor to Foot Locker. I'm sure some of the dynamics have changed, but I still think the basic premise holds. Foot Locker/East Bay can leverage the team championship races being held (NXN or RunningLane this year) to solidify their position as the true "individual national championship" in high school cross country.

Here's the article, published December 13, 2009, with the image redrawn (the original is long since lost to history) and some of the broken links removed.

Should Foot Locker Make NXN a "Team" Regional?

I hope you all got to watch the [2009] Foot Locker Cross Country Championships on Saturday morning.  It was a great meet.  For me, the striking thing was that the girls ran like boys and the boys ran like girls (I'll explain!). 

In a typical girls cross country meet, the top girl knows she's the best and she goes out and runs away from everyone.  It's not uncommon to see girls win races by 10-20 seconds, and even close races tend to be strung out early.  Boys tend to be more cautious and strategic, and they'll run in a pack until one runner thinks he can break the others with a big move.

On Saturday, the girls ran in a pack for most of the race, until Megan Goethals and Chelsey Sveinsson broke away late.  Chelsey Sveinsson made a big move with 800 meters to go and looked to have the race won, but Goethals came from way back with an amazing kick to take it at the line.  A truly miraculous finish.  On the boys side, however, Lukas Verzbicas dominated the race, running from the front from the gun.  He withstood a couple moves by NXN champ Craig Lutz and West Region champ Brian Shrader, but was never seriously challenged.  He became the first sophomore to win the boys' title and he did it going away.

Dyestat has good coverage of this event (Rich Gonzalez, a writer for the site, was one of the announcers for both NXN and Foot Locker). I want to follow up on my last article, regarding the battle between Nike and Foot Locker for the title of "national championship" meet.

Nike vs Foot Locker: What Can Foot Locker Do?

In my last article [recapping the 2009 NXN meet], there was an implicit assumption in my argument that Nike was going to overtake Foot Locker as the "championship of choice" for high school cross country.  That assumption was that Foot Locker can't (or at least won't) do anything to upend Nike's ambitions.  

I wrote that Nike appeared to be pulling out all the stops to make NXN the premier championship event, and that Foot Locker didn't have many options.  I didn't write much about those options, however.  The closest I came was this paragraph.

"I don't expect Foot Locker to go away any time soon, and part of me hopes they get creative and put up a fight with Nike, but they'll be hard pressed to do so without a team element.  I feel like they need to have all the top individuals to stay relevant, not half, not most, all of them.  I don't know how they can do this...maybe delay their races by a week?  They'll need to do something, especially with Nike pulling out all the stops to make NXN the premier high school cross country championship in the country."

Shortly after publishing the article, it nagged at me that I didn't dive into this a little more.  After all, Foot Locker has been a mainstay of high school cross country for 30 years.  They still put on a great event, they still draw a higher percentage of the top individuals, and for the time being, they still crown the "individual national champion."  

So let's assume that Foot Locker is willing to make some bold moves.  Let's assume that they don't like being bullied by big, bad Nike and that they aren't ready to go anywhere.  Most importantly, let's assume there's room for two "national championships".

With all of those assumptions in place, what can Foot Locker do?

I Scream, You Scream, We All Scream for Ice Cream

Before we get to Foot Locker, I want to give you a little scenario.  Those of you who've studied marketing have probably heard it before, so if you're reading this out loud to a group, do me a favor and don't spoil it by announcing the answer.  (But by all means read it in a Sean Connery voice.  That's how I write it, after all.)  Here's the scenario (with a hand-made diagram to illustrate it!):

Where do you put your ice cream shop?

There's a beach roughly a mile wide, and every summer it's packed with people having a good time.  There is an ice cream shop that is the one and only place to buy an ice cream at this beach.  You have decided to start up your own competing ice cream shop on this beach. The question is, where should you put your shop?

The answer, of course, is that it depends on how hot the sand is.  Let's take a quick look at the different locations offered and see why that is. First, the three places you don't want to be.

  • A & B:  Both of these spots represent near perfect competition.  By putting your store here, you are basically announcing that there is only enough room on this beach for one ice cream shop and you will do whatever it takes to be that shop.  You are now in a war.  Hope you have a war budget.
  • E:  It's not as bad a place to be as A or B, but you can do better.  This is the tail-between-your-legs deferential approach.  Putting your business here invites the other guy to beat you up, basically.  Don't be a pansy.

Now let's look at the remaining locations.

  • D:  This is the spot for perfect cooperation.  You are both stationed at equivalent locations on the beach, you are not a direct threat to each other.  Neither of you gets the whole market, but assuming you sell the same ice cream at the same price, you are positioned to divide the customers on the beach equally.  (But if you do this by talking to each other and striking a deal, it's called collusion and it's a no-no.  Just so you know.)
  • C:  This is where it matters how hot the sand is.  At the beach, most people walk around barefoot.  If the sand is hot, they will avoid walking a long distance.  If the sand is warm or cool, they will be more inclined to walk longer distances.  So if your sand is extremely hot, you might be able to get away with putting your ice cream shop closer to C than D.  People will want to get their ice cream with the lightest amount of pain possible.  On the other hand, if the sand is cool, getting too close to your competition might cause them to walk the extra distance and check them out. 

So the right answer here is: somewhere on the C side of D, depending on how hot the sand is.

There are three important lessons here.  One, whenever presented with a simplified business scenario, assume the answer is more complex than any multiple choice answer offered.  Two, there's a lot of money to be made in ice cream at the beach.  And three, cutthroat competition sucks, cooperate if possible.


Mmm, Tastes Like Foot Locker

Okay, so how does this apply to our Nike vs Foot Locker debate?  I accept it's not a perfect analogy, but let's give it a go anyway.  Ice cream is cross country races.  Foot Locker is the original ice cream shop.  NXN is the new shop.  The ice cream customers are all the potential athletes who will compete at your race, and buying an ice cream is qualifying at a regional meet.  Finally, the sand's temperature is effectively how much advantage Nike's big budget gives them (the more budget matters, the hotter the sand).

For 25+ years, Foot Locker was the only shop on the beach, and they operated a hugely successful cross country championship.  Then Nike decided to offer a competing product.  Nike didn't move into space A or B, however, they moved into D.  By creating a "team championship" they were still competing with Foot Locker and it's entrenched "individual championship", but in the most cooperative way possible.  By introducing the individual qualifiers in 2008, however, Nike effectively uprooted its shop and moved it closer to C. 

As Nike continues to grow in strength, they are able to expand farther and farther toward C.  The more money they spend to create an incredible experience just raises the temperature of the sand separating athletes from their two events.  Every time an athlete like Joe Rosa or Elias Gedyon go to NXN but not Foot Locker, it lets them inch a little closer to Foot Locker's spot.  But Foot Locker doesn't have the money or the inclination (nor should they) to want to offer a competing team title to NXN's.  That's what my last article was essentially arguing.  Nike has the resources to attract runners and to keep the sand hot, and they appear to be using this with a goal of becoming the only shop on the beach.  Foot Locker, unless it does something, is going to find themselves offering half an individual title.

My Solution: The Team Regional

The challenge here is to neutralize Nike's aggressive approach while simultaneously respecting the value of the team championship that NXN determines.  You don't want any kids choosing NXN because of the team aspect (as the Rosas did, despite their team not qualifying) and missing Foot Locker as a result.  (This year [2009], 6 of the top 10 girls and 3 of the top 10 boys at NXN were on teams.)  And you don't want Nike's money to create an effect where the sand gets hotter and hotter, making people shy away from going to Foot Locker.  

The more I've thought about it, I do think there might be a solution.  I propose to create a fifth Foot Locker Regional, the Team Regional (aka "the NXN Regional").  

Imagine Foot Locker holds its four regionals as it does now, only they introduce another way to qualify.  Finish top ten at NXN and you're automatically in.  It's the equivalent of offering the new ice cream shop's best customers a free shuttle over to your ice cream stand and some coupons for free ice cream.  After all, it doesn't matter how hot the sand is if it's not burning your feet (and everybody loves free ice cream).  

The benefits here are numerous.  First and foremost, NXN's individual title goes from being positioned as a potential national champion to a de facto regional title.  If you're good enough to win NXN, then you're good enough to qualify for Foot Locker.  Runners will be crossing the line in Portland and saying, "Yes, I'm going to Foot Locker!"  An NXN title would be prestigious and worth pursuing, of course, but no longer a "national championship".  

From the athletes' perspective, this is great because nobody gets punished for choosing their team over themselves.  In fact, they might actually get rewarded for it if their team is good enough to qualify for NXN, and they can finish in the top 10 there.  Will some athletes skip the Foot Locker Regional to compete as individuals at NXN?  Probably.  But it'll be a risky strategy, especially if NXN has a strong field.  Without a team to run for, some athletes might choose their Foot Locker Regional over NXN if they think they have a better shot of getting to Foot Locker Nationals.  This might add a week to a few top runners' seasons, but racing one more week would be optional and they could choose to shut it down if they wanted.  You don't think Joe Rosa, Elias Gedyon, Ammar Moussa, and Zack Wells wouldn't have liked to redeem themselves at Foot Locker, though?  And would Lukas Verzbicas have had such an easy go of it with them there?  Honestly, it would have been an entirely different race. 

And finally, this doesn't just give Foot Locker a fifth regional, it gives them a free fifth regional.  Nike essentially foots the bill for ensuring that all the top athletes get identified and the opportunity to go to Foot Locker for the "real" individual championship.  Foot Locker can just announce the following:

Foot Locker believes NXN's team championship has been a positive experiment and provided enormous benefit to the sport of cross country at the high school level.  Foot Locker wishes to support Nike's endeavor and does not wish to put athletes in the position of having to choose to compete for the individual national championship at the expense of competing for an NXN team title.  As such, Foot Locker has decided to offer the top ten finishers at NXN invitations to compete at the Foot Locker Cross Country Championships, where they will go head-to-head with the best runners in the country to determine the individual national champion.

Imagine the gnashing of teeth in Beaverton when Foot Locker announces that!

Of course there are other considerations.  First and foremost, Foot Locker has to continue to take place after Nike's NXN meet.  If the two are held on the same day it won't work.  But Nike will have to be the bad guy and move their meet to make that happen, and that would be tantamount to announcing their intentions to kill Foot Locker.  Wouldn't go over well.  

If the budget for 50 athletes isn't there, they can revert to 8 qualifiers in each region, plus 8 at NXN, making 40 total.  There would definitely be more athletes making three big weekend trips in a row, and the athletes with a week off might have a bit of an advantage.  (This might actually encourage some top individuals to skip NXN, though.)  And decisions have to be made whether to accept NXN alternates in the case of athletes qualifying at both meets (I'd be cool with this either way), and whether it's acceptable to have 16 runners from one geographical area and 10 from another, which could happen if NXN results end up that way (Personally, I have no problem with this, either).  

The biggest concern, of course, would be Nike's reaction.  You know they wouldn't take something like this sitting down, but honestly, Foot Locker's biggest concern should be doing nothing and losing relevancy.  Going on the offensive and putting Nike in a tough position at least gives them a chance.  I should also note that the quickest way for Foot Locker to lose this battle (whether they take my advice or not) is to put on an inferior event.  They need to continue getting the former greats out there, continue pampering and coddling the runners, and continue improving their website, webcast and overall coverage.  

Nike wants this to turn into a war.  They want to go head-to-head because they know they'll win that battle.  But Foot Locker doesn't have to beat Nike head-to-head, and they don't need to outspend them.  Not if they essentially get Nike working for them.  And that may be as simple as accommodating Nike and "granting" them status as an official Foot Locker Regional.

Anyway, that's what I would do if I were in Foot Locker's position.  You all might have other ideas that can either complement this approach or solve Foot Locker's problem in another way.  What do you think?  What would you do?