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Nike keeps it simple and personal

News, 24 December 2015

BEAVERTON, ORE: Sportswear brand Nike is aiming to make consumers' digital experience "simple and personal", the chief executive officer has said.

In a second quarter earnings call, Mark Parker told analysts the brand was "connecting deeply with consumers through products and experiences" and that digital played an important role in achieving this.

"Digital … allows us to deepen the relationships we already have with consumers by tailoring every interaction to their specific needs," he explained.

And the idea of "simple" entailed "moving toward one access point for the best of Nike and personal [becoming] more and more tailored to the individual".

Nike.com is at the heart of this. "Driving the connection of Nike.com to our broader digital strategy continues to be, without a doubt, one of our greatest opportunities as a company," Parker stated.

It is also central to an ambition to ramp up e-commerce sales from $1bn to $7bn over the next four years.

In the most recent quarter, Nike.com sales were up 49%, helped by online launches in Canada, Switzerland and Norway; during the next quarter the site will launch in Mexico, Turkey and Chile.

The wider digital strategy involves improving inventory control and connecting its stores to its mobile checkout and in-store digital commerce platform to reduce the chances of a consumer not finding what they want.

E-commerce forms one part of a two-pronged approach that aims to see overall direct-to-consumer (DTC) sales – through branded stores and Nike.com – more than double by 2020, from $6.6bn to $16bn; in the most recent quarter, DTC sales increased 26%.

Such sales have the advantage of earning higher margins than those through third-party outlets while also allowing the company to offer a better customer experience.

Parker was excited about the next six months, a period taking in a wide range of sporting events including Super Bowl 50, the NBA All Star Weekend, COPA America, Euro 2016 and the run up to the Rio Olympics.

"This year, you will see NIKE unlock innovation for athletes like never before," he promised.

Data sourced from Seeking Alpha; additional content by Warc staff