Nike Inc. (Nike) is one of the world's biggest footwear and sports apparel brands. Easily identified by its famous swoosh logo, Nike's roots date back to 1964 when it was known as Blue Ribbon Sports. While staying relevant for more than 50 years in an ever-changing world is no easy feat, Nike has made it look easy.
Always evolving
As technology has changed, Nike has rapidly digitized, increasingly focusing on direct-to-consumer sales through its website and mobile phone apps and leveraging such platforms to improve customer engagement. For instance, the company offers a free membership rewards program to its online customers, providing access to member-exclusive products and free shipping and return services. Additionally, Nike’s Running Club app enables users to track their runs, capture time, pace and heartbeat. Furthermore, Nike uses data from these apps to personalize emails, interacting with customers on a deeper level.
Just buy it
With easier direct access to its customers, Nike has gradually shifted away from wholesalers, using e-commerce to drive its business instead. Shifts in consumer activity in recent years have hastened the company's evolution.
Prior to 2020, Nike sought to have digital sales represent 30.0% of its total revenue by 2023. However, brick-and-mortar stores closed amid the COVID-19 (coronavirus) pandemic in 2020, driving consumers to e-commerce platforms to purchase Nike products. As a result, Nike's digital sales increased 45.0% in 2020 alone, accounting for 35.3% of its total revenue; this trend, however, appears to be just the beginning. In 2021, 40.7% of Nike's North American sales were made through its direct-to-consumer e-commerce channel, resulting in total sales increase 73.0% that year alone. Recently, the company announced a new target, which is to have e-commerce account for 50.0% of total revenue.
Got em
Shopping for sneakers online has only become the norm in recent years. In 2015, most Nike sneakers were sold at sneaker retailers such as Footlocker, Footaction and FinishLine. Popular models such as the Air Jordans, Foamposites and Air Maxes are often in high demand, requiring customers to enter a raffle or wait outside the stores hours before their release.
That quickly changed with the introduction of the SNKRS app, which enabled consumers to enter raffles directly via Nike. The app notifies the customers whether they have been selected a few hours afterward. The confirmation screen, which either displayed "Got Em” or “Your Submission Wasn't Selected," became a trend on social media as users in the community shared their results, essentially advertising the app for free. The SNKRS app was a breath of fresh air for sneaker enthusiasts who lacked time to purchase the model they wanted physically.
The future is now
With Meta Platforms Inc., formerly known as Facebook, introducing its Horizon Worlds Metaverse, a virtual reality online social media platform, companies are taking the necessary steps to prepare for this new era of technology. In October 2021, Nike filed two trademarks with the US Patent and Trademark Office for virtual goods. Furthermore, in December 2021, Nike announced the acquisition of RTFKT studios, a company that designs and sells virtual clothing and sneakers via non-fungible tokens (NFTs). With Nike already having a solid foothold in the brick-and-mortar world, it will likely seek to carry over that rich history online, adding another source of digital revenue.
