Nike is using consumer insights drawn from loyalty member polling within its product development for the first time.
An upcoming sneaker, the Design by Japan Air Max 1 '87, marks the inaugural debut of a Nike product that was influenced by consumer polling in the Nike SNKRS app and local member polling. It took the company just a year to bring the new product from conception to delivery, said John Donahoe, president and CEO, in an earnings call with investors this week.
“Members who participated will be the first targeted for the shoe, creating Nike’s first full-circle insights-to-shopping experience,” he added, describing the company as being in the early innings of this approach of using member insights to inform products and consumer experiences.
The No. 9 publicly owned consumer goods company also has drawn consumer insights from Nike Run Club app for use in its NEXT running line, as well as consumer feedback via retail touchpoints about how the product is used. Upon identifying that users of the Invincible running shoe were putting more distance on the model, the company in response developed an upgraded version with more cushioning and support.
Nike, which has a reported 150 million active loyalty members, has also used consumer insights to launch products in complementary categories, such as trail running.
To be sure, loyalty member engagement remains strong at Nike, with Nike Direct sales fueled by increased member buying frequency and increased store sales. The company reported third-quarter revenue growth of 14% (19% currency neutral), with Nike Direct sales up 22%, Nike Digital up 24%, stores up 19%, and wholesale up 18%.
Gross margins declined as a result of higher markdowns, product inputs costs, and freight and logistics expenses, including higher supply chain network costs in North America; however, company leaders reported progress in managing its excess inventory challenges.
Within its app, Nike saw double-digit growth in repeat member purchases in North America. The app has integrated personalized product recommendations for members using available inventory to increase sell-through of key products.
The company partnered with Dick’s Sporting Goods in 2021 for a shared app, and Donohoe said such partnerships with its wholesale partners are beginning to bear fruit. For example, they can send a personalized email to a Dick’s baseball consumer that’s focused on both Nike and Dick’s products.
“[W]e'll continue to expand that in a very thoughtful way with our other strategic wholesale partners. … I think it gives us a competitive advantage of being able to serve consumers across multiple channels and having the largest and most engaged membership program in the industry.”
This article first appeared on the site of sister brand CGT.