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The second installment of the eIQ BRAND Series covers the quintessential sports brand, Nike. The trademark ‘swoosh’ is seen on famous basketball players, track stars and probably on your own feet. Founded by Phil Knight and his University of Oregon track coach in 1964, how did they build such a brand phenomenon?

THE HISTORY

Nike can attribute its cult-like following and 48% market share in America’s athletic footwear sector (2015) to high profile athlete sponsors across the world like basketball legends Michael Jordan and Lebron James, a stubborn founder (thank you Shoe Dog) and a well-thought out sales strategy.

Nike’s infamous “Just Do It” slogan.

Websites like StockX have banked on Nike’s popularity in the street fashion circuit by trading sneakers to make money, similarly to how shares are traded on the stock market. Michael Jordan’s line of sneakers, Air Jordans, is considered a collectors’ item and have in fact been sold for $104,000.

Source: StockX ‘s most valuable Jordan releases, 2015-2016

The company has built a global, extensive offline presence scattered across the globe from its home grounds in the US to Finland, China and Hong Kong and over the years, Nike has launched sub-brands that include Nike golf, Nike+, Air Force, Air Max, Nike Skateboarding and Nike Pro.

Nike’s latest figures stand at approximately $3.74 billion in revenue, compared to Adidas’ $877.6 million (2016).

Nike is not only famous for creating running shoes that improve performance during track & field, but also for its continuous innovation. The company’s master storytelling is still influencing shoe designs today.

“We’re connecting what we’re doing today back to Nike’s heritage,” says Dennis Reeder, Ekins training manager, under Nike.

THE INNOVATION

Nike is everywhere.

The company has a mobile app, Nike+, that works like a concierge service. Not only can users use the app to manage purchases, collect rewards points, and book spots at running events, they can also scroll through new collections on their feed.

The app also offers free standard shipping on every order, option to speak with product experts or chat live. Users of Nike+ can also reserve newly released items, and head to the local branch to make a payment.

Nike+ is soon to be available globally and handled by a team of tech entrepreneurs working out of Nike’s digital studio in New York City.

Source: Nike+

Never one to shy away from testing, the ‘Just Do It” advocates also created its own Youtube series to complement its marketing campaigns that garnered over 80 million views.

But it’s the company’s running shoes, continuously tweaked, ripped apart and rebuilt to be more impressive than the last is the prize that keeps fans coming back.

Last year, it teamed up with BBH Asia Pacific to launch an Unlimited Stadium campaign that brought light to a shoe shaped running track in Manila.

The stadium features a 200-metre running track lined with LED screens, where 30 runners at a time are invited to engage in a virtual race against avatars of themselves.

The much anticipated release of Nike VaporMax and relaunch of Nike AirMax through a Kiss My Airs offline and online campaign all drops more money into Nike’s brand equity bank.

THE STRATEGY

Nike has been doubling down on its digital efforts to fully commit to a multi-channel strategy. The company announced only a few days ago that it would slash 1,400 jobs to expand its direct to consumer sales online.

This was following March 2017, when the sportswear giant reported an 18% jump in digital sales. 2016 brought in an estimated $1.51 billion in digital sales and recorded a 49% jump in digital sales in Q1 2017.

“The future of sport will be decided by the company that obsesses the needs of the evolving consumer,” says Mark Parker, Nike Inc’s chairman, president, and CEO. “Through the Consumer Direct Offense, we’re getting even more aggressive in the digital marketplace, targeting key markets and delivering product faster than ever.”

Making web inventory available in stores became a priority for Nike after the retailer conducted a survey that asked shoppers who walked out without a purchase why they didn’t buy anything.

“The No. 1 reason they walked was that they couldn’t find what they were looking for,” said Christiana Shi, President of direct-to-consumer at Nike.

The solution? Give store associates mobile devices to complete transactions and help shoppers find out-of-stock items.

“We are telling them, ‘Hey, buy three sizes. Buy three colors. Ship us back what you don’t want.’ We know that if they get what they want, and they’re happy, they come back,” said Shi.

Nike is also reportedly close to selling directly on Amazon in the US. This would raise competition for brick-and-mortar sporting goods retailers, and also put pressure on rival athletic brands. Currently, Nike’s presence on Amazon is limited to third party sellers and unlicensed dealers. Through the partnership, Nike could weed out excess, discounted inventory available at the marketplace through third-party retailers and sell more full-price products through the online channel

IN SOUTHEAST ASIA

Nike’s presence in Southeast Asia is extensive, both offline in department stores, shopping malls and at flagship stores and through ecommerce across the region, solely selling through its own platform.

Nike Thailand ecommerce website

 

Last year, it teamed up with BBH Asia Pacific to launch an Unlimited Stadium campaign that brought light to a shoe shaped running track in Manila.

The stadium features a 200-metre running track lined with LED screens, where 30 runners at a time are invited to engage in a virtual race against avatars of themselves.

Nike’s shoe shaped running track

The company practices what it preaches; high performance, endurance and pushing its limits.

Nike Philippines Inc held 24% of value share within the sportswear in the Philippines in 2016.

THE FUTURE

True omni-channel retailing and digital investment are all part of Nike’s ambitious roadmap, in which the company vows to grow its ecommerce business to $7 billion by 2020.

The company has already gotten a head start on the online retail trend by pushing a ‘digitized’ shopping experience through its Nike+ app and mobile in-store touchpoints.

But for Nike to reach its ambitious goals of making ecommerce a significant part of total sales, the company must look at building awareness around itself with Gen Z, while maintaining its core character of catering to the performance of athletes and sneakerheads across the globe.