NIKE looks to innovation and storytelling

In what it says is a “highly promotional” retail environment, sportswear brand NIKE is looking to make up to $2bn in savings across the business and to reinvest much of that in product innovation.

In a pre-Christmas earnings call, CFO Matthew Friend stated that “Our goal is to focus NIKE's brand heat and energy on what is new as we accelerate our product innovation cycle”.

Why innovation matters

The current environment is shaped by negative macro-economic factors and cautious consumer behaviour, all of which are beyond the control of an individual company. “What we control is accelerating our pace of innovation and newness in order to give the consumer something to want to continue to invest in this category,” Friend said. “And we think that we can do it like nobody else.”

Takeaways 

• Of products and product launches in Q4, Friend reported that “we’re seeing an incredible amount of consumer energy in response to newness and new stories – and we’ve seen either full sell-outs or incredibly high levels of full-price selling”. 
• Across NIKE’s product portfolio, “performance outpaced lifestyle” for the most recent quarter, “with innovation and hyper-local storytelling resonating with consumers”. 
• Over the coming 12-18 months, he added, “You should … expect to see us reinvesting some of the resources that we’re taking out of the business back in things that are consumer-facing, that have an impact on sport, and that continue to enable us to maximize the impact of the stories that we want to tell.”

Key quote

“We need to accelerate our pace of innovation, elevate our marketplace experiences, maximize the impact of our storytelling and increase our speed and responsiveness, all in service of the consumer” – Matthew Friend, CFO, NIKE.

Sourced from Seeking Alpha