Nike to focus on "stronger brand stories" - Warc News

News: March 19, 2010

Nike to focus on "stronger brand stories"

BEAVERTON: Nike, the sportswear giant, is planning to heighten its digital activity and develop "stronger brand stories" as it seeks to tap in to the changing needs of consumers.

"Nike is more than a survivor in these tough economic times. We're able to manage up and through the recession to expand separation for our brands and our businesses," said Mark Parker, its president/ceo.

Alongside the growth of its trademark brand, Parker argued that most of its other ranges, like Umbro and Hurley, are also continuing to deliver "brand heat".

One of the major factors behind this positive trend is that shoppers are relying on "trusted" and "authentic" goods during the uncertainty resulting from the economic downturn, the company said.

In an effort to drive "demand creation", Nike posted a 16% increase in its selling, general and administrative expenses in the last quarter, leveraging its sponsorship of a number of athletes at the Winter Olympics.

Looking forward, it will base its communications strategy around similar tie-ups linked to the NBA, NFL and FIFA World Cup and other such properties.

"When we amplify this connection to sports, we create more distinction for the brand and we offer easier and more attractive choices for consumers. And Nike has the unique ability to pull that lever," said Parker.

Having "refocused" its apparel business two years ago, dividing it into separate Performance and Sportswear units, the organisation has also been able to take a more nuanced approach in each of these areas.

"Nike Performance is the anchor of our brands ... In every category, Performance takes the lead," said Parker.

"In Sportswear, we see the benefits of being a good editor on the product level. We are focusing on fewer, more productive styles."

Recent innovations have included the LunarGlide and Dynamic Fit running shoes, which will form part of a new "wave" of women's footwear lines in the US, as well as lightweight basketball and football jerseys.

More broadly, the company has aimed to reconfigure the "retail experience", in an attempt to expand its direct-to-consumer business, which generated an 11% improvement in revenues in the last quarter.

"To do that we committed to building our retail capabilities, smoother product flow, surgical assortment planning that focuses on key items, more compelling merchandising, stronger brand stories and more efficient back-of-house systems," said Parker.

As with its bricks-and-mortar operations, Nike is enhancing its presence on the internet, reflecting patterns of behaviour observable among its customers.

"The digital lifestyle is driving dramatic change in our industry and significant potential to our company," Parker said.

"We are attacking that in every dimension; online shopping, customisation, immersing our brands in consumer cultures and telling inspiring and entertaining stories."

Don Blair, Nike's cfo, said its Chinese arm is benefitting from its marketing campaigns elsewhere, which raises the profile of Nike-affiliated stars like Kobe Bryant and LeBron James, who are popular in the Asian nation.

"The marketing mix in China is actually a blend of global assets and local assets. It's the way we market the brand there … it's a tremendous market for us, and certainly, we're really enthusiastic about the growth," Blair argued.

"The positioning we have for the brand in China is very premium. And we think the Chinese consumer really connects with the brand and the product that we're putting in that marketplace."

Data sourced from Seeking Alpha; additional content by Warc staff, 19 March 2010

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