Nike betting big on digital transformation despite coronavirus

Nike’s digital business delivered 36 percent growth in Q3 and it will be a powerful driver of consumer connections. Digital remains the fastest growing channel — representing more than 20 percent of overall business.
Nike store with RFID
Nike app is growing its revenue close to triple digits once again in Q3, fueling member acquisition and strong monthly engagement.

Nike said its digital growth is accelerating. Nike made huge investments in digital business and is proving to be the foundation for resilience amidst challenges.

Nike is leveraging select teams and tools to dynamically model demand, pricing, planning and allocation. The global brand is leveraging the Nike membership platform and Nike mobile app ecosystem to inspire and enable people to be active at home while also providing targeted product offers and services to consumers.

Nike’s investment in enterprise data and analytics is fuelling more agile end-to-end execution.

“We’re still in the early earnings of Nike’s digital transformation, but the capabilities we’ve already been building for the future are proving to be the strongest pillars within our business today,” Nike CEO John Donahoe said during an analyst meet.

China

Nike said it is betting big on digital transformation efforts despite closing down more than 5,000 retail stores in Greater China 45 days ago due to coronavirus outbreak.

Nike said its retail volume in China plummeted. It leveraged diverse sourcing base and digital capabilities to manage the business with flexibility, and shifting inventory to serve consumer digital demand. Nike used digital app ecosystem and Nike expert trainer network to inspire and support consumers across China to stay active and connected while at home.

Nike Training Club workouts in China achieved growth in signup and engagement. Weekly active users for all of Nike activity apps were up 80 percent by the end of Q3 versus the beginning of the quarter. The strong engagement of Chinese consumers with activity apps translated into strong engagement with Nike commerce app. Nike launched the Nike app in China in Q3 and it has 5 million Nike app downloads.

“Our digital business in China grew more than 30 percent and maintained strong momentum throughout this challenging period,” John Donahoe said.

Nike launched the Nike app in China in Q3 and it has 5 million Nike app downloads.

Nike began to gradually reopen stores in China. Its digital business in China has accelerated further over the past month. Nike achieved double-digit increase in retail traffic week-over-week with some stores having already returned to prior year levels.

China’s fast growing 5G technology infrastructure, artificial intelligence, machine learning and digital related-business environment, as well as people’s willingness to connect with various products via digital applications, are creating opportunities, Michael Martin, vice-president of Nike China and general manager of Nike Direct China, said in 2019.

Nike would not be providing overall fourth-quarter guidance due to uncertainty over the coronavirus outbreak.

Earlier this month, the sports brand temporarily closed down all 384 retail locations in the U.S., along with stores in Canada, Western Europe, Australia and New Zealand, until March 27.

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