Nike’s Digital Transformation a Slam Dunk

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Nike’s Digital Transformation a Slam Dunk

By Jamie Grill-Goodman - 03/25/2019

Nike is seeing rises in loyalty members and purchases as it drives its digital transformation with an emphasis on mobile. The footwear and apparel retailer’s growth in its third quarter was led by NIKE Digital, which grew 36% globally.

“Over the balance of this fiscal year and through FY20, we will continue investing in this digital transformation,” noted Mark Parker, Nike chairman, president and CEO. “While many companies can build a technology stack, no other brand is able to leverage technology to create the kinds of amazing consumer experiences that only NIKE can.”

Nike continues to expand its digital footprint, launching the NIKE app in Japan and rolling out it out in its own retail stores across North America and Europe.

“Our expansion is fueling the acquisition of new members at a strong double-digit rate, and the new experiences that we are creating are also driving strong double-digit increases in member engagement and buying,” said Parker.

Nike extended a new, advanced algorithm in its apps that allows it to reward the retailer’s most active loyalty members in Q3. According to Parker, Nike added this data-driven format to the release of the NIKE app in Japan, which helped lead to the retailer’s most successful launch ever.

Nike's Q3 2019

  • Revenues increased 13% to $9.8 billion, up 8% on a currency-neutral basis.
  • Operating overhead increased 17%, driven by continued investment in NIKE’s digital transformation, as well as year-over-year compensation related accruals.
  • In Q3, growth was led by NIKE Digital, which on a currency neutral basis grew 36% globally.
  • Nike delivered 24% currency-neutral revenue growth in Greater China, led by NIKE Direct, with digital commerce up over 60%. 

Nike’s SNKRS App traffic and revenue were up triple digits in the quarter and, during the company’s record-breaking Air Jordan 11 Concord launch, its digital ecosystem showed its ability to handle scale processing on average 300 transactions per second.

“SNKRS app to me is really a signal of the future potential of how we connect with consumers in a deeper way with storytelling as part of that effort,” said Parker.

Additionally, more than 50% of transactions are with members in Nike’s House of Innovation stores in New York and Shanghai, while, across Nike’s fleet, shoppers using the NIKE app at Retail average 40% higher sales than those that don’t.

Nike has also fully digitized its palette of over 6,000 footwear materials, allowing design teams to build on one another’s work and quickly adapt to market trends.

Moving forward, Nike plans to invest in new digital member services, data and analytics, demand sensing technology, technologies such as RFID that enable Connected Inventory across the marketplace, and in a new editorial content engine.

“There are teams all over NIKE piloting new ideas and proving-out concepts,” said Parker. “We’re testing, learning and optimizing at an incredible pace. But the real key is to turn these new digital capabilities into growth at scale.”