The company revealed its “solution” to the problem of fast-growing feet on its website under the title of Nike Adventure Club, which “lets kids regularly select Nike and Converse shoes for the right-fitting shoe as their feet – and tastes – evolve.” It will serve kids’ sizes 4C to 7Y – roughly ages two through to 10.
Nike’s scheme has three pricing plans: four pairs per year for $20 a month (each pair effectively costing $60), 6 per year for $30 a month, or for a monthly payment of $50 you can get a pair every month. Customers can change or pause their subscription at any time. Exchanges are free within a week of delivery if the shoe is the wrong size.
“In providing footwear, we’re always trying to answer, ‘What do kids want?’” explained Dominique Shortell, Director of Product Experience and Retention for Nike Adventure Club. “But an equally important question is, ‘What kind of experience are we providing for their parents?’ We want to make shopping for footwear as convenient as possible for them.”
The subscription basis creates value for Nike far beyond the subscription fee in a similar way that Prime does for Amazon, said Sam Jordan of Manifesto Growth Architects, speaking to WARC.
“It’s the foundation upon which Nike can build a more valuable relationship over a customer’s lifetime, to learn more about them, and to use that knowledge to open up additional revenue streams.
“It’s a huge step from selling sports apparel in stores to building and running a membership-based model but this proposition and others like it will be a big part of Nike’s future.”
Arguably, 2015/16 was the year in which subscription services (outside of content and software) really kicked off. The most famous names associated with the trend are services such as Dollar Shave Club (which was bought by the FMCG giant Unilever) and the make-up trial service Birchbox. Research from that year showed that subscription box retail sites had seen a 3,000% increase in visits between January of 2015 and the same time in 2016.
There are two fundamental business models in subscription: box subscriptions (think Blue Apron and other recipe kit subscriptions) that deliver a variety of new products at regular intervals, and replenishment services that help people to restock essentials. The interesting element of Nike’s new service is that it straddles both: giving access to new product while restocking the essential commodity of children’s footwear.
IPSOS research from June of this year found that the three key elements of such services that customers value is that subscriptions ought to enhance the user’s life, do the hard work for them, and foster the customer’s confidence. Key to the final point is transparency, especially when it comes to pricing, as customers can worry that being locked into a scheme could lead to hidden fees for the service.
For Nike, the service may not be as straightforward as it hopes. TechCrunch observed that as kids get older their growth rates slow down. From a rate of more than a half foot size change every two months below the age of 16 months, children over the age of three grow just one half foot size every four to six months, suggesting that Nike’s plans may be far too frequent for all but the most rugged shoe-wreckers.
Outgrown shoes can be sent back in bags that Nike will ship twice a year. They will either be donated to families in need or – if they’re seriously worn – will be recycled by Nike.
The company has been testing a subscription service, known as Easy Kicks, since 2017 and reached 10,000 members, according to Nike.
Nike Adventure Club has launched in the US, but is bringing customers onboard through a waitlist.
Sourced from Nike, TechCrunch; additional content by WARC staff