More on Nike
“Data just allows us to have a more personalized experience with consumers, and it’s what consumers want and expect from a brand like Nike,” said John Donahoe, president/CEO of Nike Inc.
The company will also rely more heavily on data as part of its product innovation, tapping into information from its consumer insights group.
"Nike has always married the art and science of product creation and the move towards deeper and more dynamic insights, along with our talent and investments in data science and machine learning, creates a capacity that no other brand has,” said Donohoe.
As with many consumer goods company, Nike is experiencing supply chain issues as a result of container shortages, transportation and port congestion. To navigate this, it’s leaning on data to help it identify products in local regional warehouses in order to expedite direct-to-consumer fulfillment.
The financial value of data and technology are also playing out in the company’s ability to make better pricing and merchandising decisions, especially regarding how it fulfills demand.
“I think more broadly as an enterprise, as we continue to automate the way we work and leverage technology end-to-end, there is going to be productivity in the manual processes and work that we do as a company today,” added Matt Friend, chief financial officer.
Nike is also working with a select number of partners on its One Nike Marketplace that are willing to share membership data in order to deliver personalized experiences. These partners were described by Donohoe as those that have the most robust business with their shared consumers today.
Indeed, the company’s digital efforts paid off yet again, with its owned digital business growing 54% during its fiscal Q3 on a currency-neutral basis. Leading the growth was North America, which rang up its first quarter of $1 billion in digital revenue.
Revenue for Nike Inc. grew 3% to $10.4 billion vs. last year, which is down 1% on a currency-neutral basis. But Nike brand digital sales grew 54%, powered by its mobile ecosystem, with demand on the Nike app soaring 90% vs. last year.
The company expects digital to continue to be its fastest-growing marketplace channel, with digital mix increasing toward its 50% vision.
At the heart of Nike’s digital playbook is its membership strategy, which recorded a more than 60% increase in monthly engaged users for the quarter. This was led by the SNKRS app, which had four times the engagement in monthly active users compared with last year.
Member growth is outpacing total digital growth, with buying members growing 80% vs. last year. In its owned stores, member demand penetration rates are also “seeing meaningful increases,” said Donohoe, thanks to store training programs, member-specific promotions and enhanced account linking capabilities.
“This is critical as we strategically focus on better serving and driving repeat engagement with active, high-value members across all of our channels,” he noted.
Although 35% of Nike-owned stores remained closed, physical retail, especially Nike’s new concept stores, will continue to play a key role of its direct-to-consumer acceleration. In addition recapturing displaced consumer demand as the company restructures its wholesale marketplace, these stores are helping gain members at scale.
Friend pointed to its two recently opened Nike Live concepts in China, which recorded member checkout rates reaching 90%, and Donohoe noted today's consumer propensity to demand a product when they want it, how they want it.
“They want a seamless, premium digital and physical experience. In fact, in many cases, they don’t see a difference between digital and physical — whether they bought it on digitally and had it delivered at home, or whether they bought it digitally and picked it up in store, whether it was one of our stores or one of our strategic partner stores,” Donohoe said. “And so we do see a need and a really important role for strategic physical presence, both ours and our partners.”