Nike shifts to direct to consumer model

Nike is undergoing a fundamental shift in its digital strategy by introducing a brand new Nike+ mobile application, reports Forbes.

The shift stems from the assumption that consumers are increasingly using their phones to purchase shoes and apparel online. Nike needs to establish their digital platform to maintain market dominance.

Nike introduced its new Nike+ app, which is more than another shoe and apparel company designed to track performance.

This stand-alone app actually provides the user with a feed of stories, personally tailored to meet their interests, and to a store with highlighted products that makes it easy for a consumer to busy straight from the Nike brand.

“Many of the other apps in the world are focused on customer acquisition. What we really see is the opportunity to extend and deepen the relationship with customers, making it more than a dashboard of data,” says Nikki Nueburger, Vice President, Global Brand Running at Nike.

Brands and retailers are increasingly investing in digital strategies that allows them to directly reach customers, as having direct access allows for total brand control and better hold of consumer data.

A standout function of the Nike+plus app is “Reserved For You” invitations. Users can personally set aside products in their size or events in their city that they can reserve without setting an alarm or going online at a specific time.

At the end of June, Nike reported fiscal 2016 fourth quarter and full year results, which emphasized the company’s shift to focusing on direct-to-consumers initiatives. The company reported a 7% increase in operation overhead expense to $1.9 billion, reflecting continued growth in the direct-to-consumer business.

“It’s always been about getting the right product in the hands of the consumer based on their needs”, said Neuburger.

Nike also launched its first purely digital studio in New York this week, in tandem with the launch of Nike+ app.

A version of this appeared in Forbes on August 2. Read the full version here.

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