Sales Strategy

Nike’s Powerful Pivot And Digital Domination Strategy July 18, 2023 (0 comments)

Beaverton, OR--In its 2022 fiscal year, Nike witnessed digital sales encompassing 42% of its total sales. A deliberate choice, not chance, led to this digital dominance. In 2017, Nike unveiled its Consumer Direct Offence initiative, aiming to double innovation, speed, and direct consumer connections. This was closely linked with forming a comprehensive direct organization, merging Nike.com, Direct-to-Consumer retail, and Nike+ digital products.

[Image via Pexels Commons]

According to a story published by Indigo9 Digital, the first component of Nike's strategy involved transitioning from a predominant wholesale business model to establishing its platform. In 2013, wholesale accounted for 81% of Nike's business, which fell to 55% by 2022. Reduced wholesale relationships, such as those with Urban Outfitters, Dillard's and Zappos, facilitated more direct consumer connections. Despite this, Nike recognized the importance of multi-brand demand and continues to use wholesalers to manage inventory levels.

The story noted that another key part of Nike's strategy is keeping consumers engaged through frequent product launches, such as the groundbreaking Nike Vaporfly sneaker in 2019 and the first line of maternity activewear in 2020. CEO John Donahoe expressed confidence in their product launch pace.

Nike extends its reach beyond core eCommerce apps, creating an ecosystem similar to Apple's. Applications like Nike Training Club and Nike Run Club enable users to access home-based training programs. This ecosystem significantly impacted China during the pandemic, resulting in increased engagement and sales.

Per the story, despite the digital focus, Nike still recognizes the importance of brick-and-mortar stores. The House of Innovation store in New York is a prime example, offering a unique blend of digital and physical retail experience. Introducing features like "Scan to Try" and "Instant Checkout" facilitates an interactive shopping experience, enhancing customer loyalty and value.

Therefore, Nike's digital strategy encapsulates a careful balance of direct consumer engagement, constant product innovation, digital ecosystem creation and smart utilization of physical stores. This approach has set a precedent in the retail industry and signifies the future direction of other large-scale retailers.

Learn more in the entire Indigo9 Digital story.