Innovation at NIKE Goes Beyond Product

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Innovation at NIKE Goes Beyond Product

By Jamie Grill-Goodman - 10/13/2015
NIKE Inc.'s innovation doesn't stop at high-tech products. From successful social media promotions to a robust e-commerce business, the athletic shoes and apparel retailer hits all the right digital notes.

NIKE's revenues grew 5% to $8.4 billion in quarter one of 2016, while the e-commerce business was up 46% on a constant currency basis, with growth across all geographies. NIKE also saw a strong conversion and increased traffic particularly on mobile.

Operating overhead increased 10% for the quarter, driven somewhat by variable costs associated with targeted investments in consumer-focused digital capabilities and operational infrastructure.

"As you have heard me say many times, innovation at NIKE goes beyond product," commented President and CEO Mark Parker. "And digital is a great example. Digital is an accelerator throughout NIKE. It's a platform that enables new ways of working and new methods of manufacturing. It drives how we connect with consumers, how we serve them and how we engage with one another. It helps to fuel our growth by serving our consumers whenever they want NIKE products for any sport all over the world."
 
NIKE's digital ecosystem delivers a connected growing community, personal real-time engagement, and easier access to product. NIKE connects all three to give the most holistic premium experience to the consumer.

"Ultimately, NIKE continues to succeed because of the deep relationships we have with the athletes and the consumer. Relationships we know we must earn every day, said Parker.
 
One example of this lies in the company's promotion of its Zoom Air technology, which drives key product styles like our Pegasus 32, Vomero 10 and the Elite 8. NIKE hosted a special event called the Fastest Day on Earth, in which the company challenged runners to run their fastest mile ever. The event concluded with NIKE celebrating each runner's fastest mile with a personalized video that included the runners name, mile time and clips from their route using Google Street View. This storytelling saw excellent response, according to NIKE Brand President Trevor Edwards, reaching millions of consumers across social media.
 
"As consumer expectations continue to accelerate, NIKE will evolve and innovate to exceed those expectations," said Andy Campion, CFO. "At NIKE, innovation is in our DNA, that applies to all dimensions of our business, from the products and services that we deliver to consumers, to the operating and business models that we employ. That is what we call being on the offense always."
 
Looking to the future, Parker said he thinks the expectations on NIKE are extraordinarily high for the Olympics, but that the company will not disappoint.
 
"I feel incredibly confident and excited, frankly, about the innovation pipeline, what's in the works, excited about sharing some of that later in the fiscal year with everyone, but I think this Olympics will be one of the best, if not really the best ever for NIKE. I've never seen an innovation pipeline so full and we will be ready."