“Just Do It” usually means get out there and move. But lately, for iconic brand Nike, it also means “order online.” The footwear, apparel and fitness brand has been increasingly innovating their digital offerings in recent years, and shifting consumer behaviors during the pandemic quickly accelerated the brand’s ecommerce initiatives and sales.
Nike, a brand valued at nearly $35 billion, saw direct-to-consumer (DTC) sales account for an estimated 33.1% of their revenues in 2020. Ten years ago, DTC sales were only 13.5% of total Nike revenues. By emphasizing digital innovation and app downloads, Nike has steadily increased its move to ecommerce and DTC sales.
Nike Looks Ahead To Digital Sales In 2021
Although 2020 was a bellwether year for digital usage among consumers, for the past decade, many retail brands have been moving toward omnichannel sales systems that capitalize on the seamless transactions many consumers wanted even before the pandemic.
An article by Lauren Thomas for CNBC explains, “For the past few years, the company [Nike] has been pulling away from department stores and other wholesale outlets, instead investing in opening its own smaller neighborhood stores, called ‘Nike Live,’ to serve as pickup hubs for online orders, alongside multilevel flagship locations dubbed ‘House of Innovation.’ It [Nike] also is testing a new concept that debuted earlier this year  in Guangzhou, China, called ‘Nike Rise,’ where visitors can use their Nike app once inside the space to sign up for local soccer matches and running clubs.”
The Nike emphasis on digital experiences proved prescient in 2020, when many consumers moved the majority of their shopping online, preferring frictionless, DTC shopping experiences that offered easy payment solutions and a variety of pick-up and delivery options. Even as stores began to reopen, Nike reported an 82% increase in online sales during the 2021 fiscal first quarter (June-August 2020). On the basis of their acceleration of digital adoption by consumers, Nike is now on track for its ecommerce sales to represent 50% of total revenue in the near future. Prior to the pandemic, 30% of revenue by 2023 was the goal for ecommerce, but that has already been exceeded.
Mobile Experiences Lead The Way For Nike
A winning strategy behind Nike’s surge in digital usage is the brand’s reliance on app development and mobile experiences. Nike has multiple apps that offer different products and services to consumers, including the Nike app, the brand’s ecommerce hub, Nike SNKRS, an app for Nike sneakerheads, and fitness apps Nike Run Club and Nike Training Club (NTC).
At the beginning of the pandemic, while promoting its new “Play Inside, Play for the World” slogan, Nike dropped the subscription fee for its NTC Premium subscription. The subscription growth and diverse array of apps paid off. According to Matthew Friend, Nike EVP and CFO, during the Q1 2021 earnings call, “demand on the NIKE App grew 150%,” and the Nike Run Club app posted four consecutive months of more than 1 million downloads in 2020. Although Nike fitness apps are not strictly considered ecommerce, they include shopping areas bolstered through app-built trust, loyalty and affinity with Nike.
Ecommerce, DTC And Online Shopping Are Here To Stay
2021 may be young, but it’s clear ecommerce will continue to be a guiding strategy for many brands and retailers moving forward. Consumers are growing to prefer online shopping. Plus, ecommerce helps brands sustain revenues during crises and allows for innovative and more attributable digital advertising opportunities across channels. “The accelerated consumer shift toward digital is here to stay,” said John Donahoe, Nike CEO. “Digital is fueling how we create the future of retail.” Adding, “Nike’s digital transformation strategy is not easily replicated. Simply put, scale matters, and Nike leads.”
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