What fashion got right
about commerce that
every brand missed.

There is a model for commerce that predates every platform, every algorithm, and every attribution dashboard. It doesn't look like a funnel. It looks like a campaign. Create desire. Build aspiration. Make people feel something about your brand before they ever see a buy button. The fashion industry, particularly luxury fashion, has run this model for a century, and it works at a scale most DTC brands have never approached.

Most commerce brands have built the inverse. They've invested in the funnel, the click, the product page, the checkout. They've hired media buyers before they hired art directors. They've A/B tested button colors before they've figured out whether anyone actually wants what they're selling in the first place. They've built the highway before they've given anyone a reason to drive.

The result is a generation of commerce businesses that are technically sophisticated, analytically fluent, and fundamentally undesired. Not because the product is bad. Because nobody built the want for it.

Desire before the buy button

The luxury model is simple in concept and difficult in execution. You do not sell the product first. You sell the world the product belongs to. The campaign, the editorial, the runway, the cultural moment. These are not promotional materials layered over a commerce operation. They are the commerce operation. They are the mechanism by which the brand makes people feel that owning its product means something.

Chanel does not run retargeting ads. Louis Vuitton does not send abandoned cart emails. Hermès does not optimize its checkout conversion rate. It creates waiting lists. These brands have built desire so thoroughly, so persistently, over such a long period, that the commerce infrastructure is nearly incidental. The hard work happened upstream. The store is just where the transaction is formalized.

This is not a luxury-only model. It is a brand-first model that luxury brands happen to have practiced the longest and most deliberately. The mechanism transfers. Nike proved it at mass scale for four decades before management forgot how it worked.

What Nike understood for 40 years

Nike's founding insight was not "sell athletic shoes." It was "make athletes feel something." Phil Knight understood that the product was almost secondary to the feeling the brand created around it. The equipment of champions. The gear of people who push harder, go further, refuse to stop. "Just Do It," three words launched in 1988, was not a product claim. It was an identity offer. Wear this and you belong to that.

For four decades, Nike's marketing operated on this logic. The campaigns came first. The athletes were chosen not just for performance but for cultural meaning. Michael Jordan, Bo Jackson, Tiger Woods, Serena Williams, LeBron James. Each was not just an endorsement. Each was a story Nike was telling about what mattered in sport and culture. The products were the tangible artifacts of those stories. You didn't buy Air Jordans. You bought access to a mythology.

The commerce infrastructure was built to support desire that marketing had already created. The wholesale distribution (through Foot Locker, through basketball shops, through specialty running stores) was not just logistics. It was presence in the communities where the desire lived. The limited drops created scarcity. The retailer relationships created local aspiration. The Nike store was the cathedral, but the parish was everywhere.

What happened when Nike forgot

In 2020, under CEO John Donahoe, Nike began a strategic pivot that made sense on a spreadsheet and was catastrophic for the brand. The logic was straightforward. Eliminate wholesale intermediaries, sell direct to the consumer, capture the margin that was previously shared with retailers, and build a data advantage through owned digital relationships. Nike cut over half its retail partners. The Foot Lockers, the Dick's Sporting Goods, the specialty shops (the communities where Nike desire had been built for a generation) were treated as margin drag rather than marketing infrastructure.

The DTC operation was technically excellent. Nike's app, its SNKRS platform, its digital commerce execution. All of it was genuinely best in class. The data was better. The margin per unit was better. The analytics were richer. Everything was better except one thing. The desire wasn't being built anymore.

What Nike's wholesale network had been doing, invisibly, for decades was creating aspiration in context. When a kid walked into Foot Locker and saw Nikes presented by someone who loved sneakers, in a store surrounded by people who cared about the culture, that was brand building. When a runner walked into a specialty running shop and was fitted by someone who ran marathons, that was brand credibility. You cannot replicate the human moment of a trusted local retailer recommending your product with a targeted digital ad. They are different categories of brand experience.

By the time the financial consequences materialized, they were severe. Nike's revenue fell 10% in fiscal year 2025, a $5 billion decline. Digital fell 20% for the full year, accelerating to a 26% drop in the final quarter. Net income fell 44%. These were not platform problems. Nike's digital infrastructure was excellent. These were desire problems. The pipeline of new customers who had been introduced to the Nike world through retail community, through culturally resonant campaigns, through the density of aspirational brand presence in everyday life. That pipeline had been starved for four years.

What Elliott Hill is fixing

Elliott Hill's turnaround strategy is not complicated. It is, in effect, a return to the model that made Nike what it is. Wholesale revenue rose 8% in his first full quarter as CEO. That was the first signal of recovery. Nike is rebuilding its partnerships with Foot Locker, Dick's Sporting Goods, and specialty retailers. The company is reorganizing internally around sports categories. Running, basketball, football, training. Rather than the consumer segment logic that Donahoe had imposed. Sport-first storytelling is back.

Hill is essentially proving, by reversal, that wholesale distribution and community retail were never just logistics. They were desire infrastructure. The margin they cost was being spent on something that looked like a cost center from a CFO spreadsheet and was actually the engine of brand building at scale. When you eliminate it, the desire declines. When the desire declines, everything else declines with it. The platform doesn't save you. The data doesn't save you. The checkout optimization does not save you.

This is the most public and expensive marketing lesson of the decade. It happened at the brand that had understood the lesson better than anyone else, in the time it took to replace one set of executives with another.

The framework every commerce brand should apply

The fashion model, luxury or otherwise, is not a mystery. It is a sequence. Desire, then aspiration, then community, then commerce. In that order. The brand tells a story that makes people feel something. The community forms around that feeling. The product is the object through which people participate in that community. The commerce infrastructure is what makes the transaction frictionless once the desire already exists.

For brands outside fashion, the translation looks like this. Build the world before you build the store. Invest in creative before you invest in media. Run campaigns that establish who you are and who your customer is, before you run ads that ask them to buy. Build relationships with the communities where your customer lives. Whether that's retail partners, content creators, or physical spaces. Do this before you optimize them out of the model in pursuit of direct margin.

The funnel is not wrong. The funnel is incomplete. It describes what happens after desire exists. It doesn't describe how desire gets built. Fashion brands and Nike, for most of its history, understood that the work that doesn't appear in the funnel is the work that makes the funnel perform. When you stop doing that work, the funnel continues to report performance for a year or two on the desire that was already banked. Then it plateaus. Then it declines. Then you bring in someone new to rebuild the desire you spent years depleting.

Build the desire first. The commerce infrastructure is the easy part.