Nike’s Digital Sales Spike Demonstrates the Power Of Personal Relationships

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Nike’s Digital Sales Spike Demonstrates the Power Of Personal Relationships

By Jamie Grill-Goodman - 09/25/2019

Nike Q1 2020

Revenue increased to $10.7 billion in the first quarter, up 7% on a reported basis and up 10% on a currency-neutral basis, driven by growth across all geographies.

Nike first quarter earnings and sales topped analysts’ expectations, with digital a key growth driver for the footwear retailer.

The retailer was able to report quarterly earnings per share that beat Wall Street estimates by 13 cents, according to Bloomberg. Meanwhile, Nike digital spiked 42% on a currency neutral basis driven by enhanced digital services and international expansion in Q1 2020; digital in North America was up 30%.

CEO Mark Parker noted the spike shows “the power of more personal relationships with the consumer.

Mobile continues to lead the way for Nike with app experiences fueling the most growth. While this trend has held true in Nike’s own channels for some time, the retailer is now beginning to leverage its digital experiences with retail partners, such as its recent pilot with Footlocker.

Parker said Nike plans to integrate Nike App at Retail in more Foot Locker doors in North America later this fiscal year, as well as bring “new experiences” to Zalando in Europe and Top Sports in China.

“When coming together with another platform or retailer, our objective is to create a better experience in the path of the consumer,” said Parker. “We want them to be able to move seamlessly from online to offline and easily find the product they want, when they want it across the marketplace.”

Over the last three years, Nike has more than doubled the number of active users across its apps.

“With more active engagement we create more value for both our members and for Nike,” said Parker.

“Becoming personal at scale is the ultimate objective,” he continued. “We start in our own channels and then amplify those experiences through partnerships. The sneakers app has truly redefined our connection with the sneaker community. It’s now in 22 countries with more room to grow in EMEA and APLA and grew roughly 50% this quarter.”

Meanwhile, the Nike app gained nearly 1 million new members from interactions in North America doors in the quarter, while Nike has been busy rolling out its Nike Fit technology as well. The tech scans a shopper's foot to provide an accurate read of a user’s shoe size and eliminate consumer friction.

Parker revealed the retailer is launching a Nike Fit at-home, in-app experience later this fiscal year. The in-store experience is currently available in all North America locations and is moving quickly into Europe and Japan stores.

“Our targeted strategic investments are accelerating Nike’s digital transformation and extending our competitive advantage, ” said Andy Campion, EVP and CFO. “Even amidst the increasingly volatile macroeconomic and geopolitical environment, we expect our unrelenting focus on better serving the consumer to continue fueling strong, broad-based growth across our global portfolio.”