Nike’s Digital-First Mindset Helps It ‘Just Do It’
Nike saw a strong second quarter, driven by “tremendous” digital growth, as the retailer’s digital transformation resonates with athletic apparel shoppers throughout the pandemic.
Nike brand digital sales were up 80% globally in its Q2 2021, marking three straight quarters of roughly 80% digital growth. The No. 11 consumer goods company posted earnings per share of 78 cents, up from 70 cents reported in the prior-year quarter, and revenue ($11.2 billion) jumped 9% on a year-over-year basis, whereas analysts had predicted earnings of 62 cents on $10.56 billion in revenue.
“Our digital business has been experiencing tremendous growth, 80% globally, 100% in the U.S.,” said president and CEO John Donahoe. “Our Nike App grew 200%. Our Nike mobile app grew 200% this quarter. And I think what’s underlying that is that digital is the new normal in consumer behavior, and we believe the trends that we’re seeing are here to stay.”
Here’s a look at a few of the company’s digital wins in the quarter and since the pandemic began:
- In Q2, Nike generated over 7 billion brand impressions across social platforms globally. These touch points led to over 400 million social engagements. “It’s clear, we’re not just reaching our consumers, we’re creating dialogue and opportunities for action that continue to exceed our own internal benchmarks,” Donahoe noted.
- In Q2, Nike used the SNKRS App to launch SNKRS live with its first-ever product drop via livestreaming. This resulted in a 100% sell-through of the Air Jordan 4 PSG in under 2 minutes. This live streaming capability is now fully launched in both, North America and EMEA, with plans to expand in Japan. “Live interaction creates stronger member engagement with Nike, giving them better access to our best products and experiences,” Donahoe said.
- Since the pandemic began, Nike has added more than 70 million new members globally. Buying member growth is outpacing new and active member growth, and growth in member demand is outpacing total digital growth.
Looking ahead, CFO Matt Friend said Nike will “create a digital-first supply chain, built on a strong technology and analytics foundation, in order to optimize service, cost, convenience and sustainability.”
In North America, the company leveraged new tools to make dynamic pricing decisions during Black Friday. In addition, it will continue to scale RFID capabilities across stores in EMEA, enabling better product allocation and replenishment. Nike has also started testing consumer-facing RFID capabilities, such as self-checkout in its stores in Korea.
“Over the course of the last six months, we have reduced discretionary spending in non-priority areas, while accelerating investment to support our digital transformation and realigning our organization through a new consumer construct,” said Friend.
“While we’re opening and closing physical retail, digital is open 7 days a week, 24 hours a day,” noted Donahoe. “And what’s fascinating to watch is the consistency of the growth across digital. And so, we have increasing evidence that when a consumer wants to get something, if physical retail is closed, they’re coming to us digitally, and our ability to reach consumers digitally in a variety of manners is just getting better and better as this pandemic goes on.”