PORTLAND, ORE: Nike is to focus on a small number of premium retail partnerships and its own direct-to-consumer efforts in the future as the sportswear brand seeks to hit a target of $50bn in sales within five years.
Nike.com, Nike brick-and-mortar stores, and strategic partnerships with a few online and physical stores will be at the heart of its approach..
Speaking at an Investor Day event, Trevor Edwards, president of Nike brand, declared: “Undifferentiated, mediocre retail won’t survive.”
Around 40% of the brand’s wares are currently in what it terms “differentiated” spaces, according to Nasdaq, but it is planning double that proportion to 80% by 2022.
Accordingly, the brand will concentrate investment and resources on only 40 retail partnerships out of some 30,000, the Portland Business Journal reported.
While the rest will continue to sell Nike products, the brand’s efforts will be focused on those willing to create a branded Nike space within stores and have specific Nike-trained employees to assist with sales.
Foot Locker, Nordstrom, Amazon and Zalando are among those making the list, although Nike did not release details of all 40.
A number of pilots with online marketplaces internationally are also expected in the coming months – three quarters of growth will come from sales outside the US, with China seen as offering significant potential.
Over the same period, Nike expects to double the proportion of digital sales, both direct and through partner channels, to around 30% of its business.
“Where others see disruption to old models, we see opportunities for new growth,” said CEO and chairman Mark Parker, emphasizing “speed, direct, innovation” as the essential elements of the brand’s future approach.
“A consumer-direct offense is really what we’re lining up against,” he told CNBC. “It’s incredibly critical we serve the consumer at a higher level.
“We’re shifting our position to go more direct, to create more differentiated retail and to create a better experience for the consumer. How do we take that disruption and turn it into an opportunity.”
Sourced from Nasdaq, Portland Business Journal, CNBC; additional content by WARC staff