Nike’s Digital Race
When Nike does something, it does it big. This year the company is significantly accelerating its digital strategy, and doing it differently. So where’s the change and what makes it unique? Here’s a short review.
One of Nike’s chief competitors, Under Armour (UA), is aggressively courting Millennials through a multi-pronged wearables strategy. UA has been involved in a series of acquisitions of digital apps. In addition, it has released wearable fitness gear, and it offers a tech platform that is fueled by Watson’s supercomputer.
But while Under Armour is keeping its digital strategy focused on the development and sale of wearables, Nike is playing a different game.
Newly appointed Chief Digital Officer Adam Sussman, who is spearheading the brand’s digital strategy, is defining a more conventional approach that has little to do with wearables: developing a global ecosystem that will successfully reach its audience, converting the audience into customers, and then aligning with their lifestyle.
Nike is sticking with the “tried and true”: Reaching out to customers in ways that create a personal affinity between audience and brand.
Or stated differently: Nike is putting the customer first in its digital strategy, counting on the fact that an audience will adopt a brand when it feels understood by that brand.
Of course, when Nike does something, it does it big. The brandplans to hit the $50 billion revenue mark by fiscal year 2020, and digital is expected to be a significant chunk of that revenue — with projections indicating it will reach the $7 billion mark by that year.
It might be possible. Just look at what they’ve already done: On the company’s Q2 earnings call in December, President & CEO of NIKE, Inc., Mark Parker, said that the Nike.com business grew nearly 50% on a constant currency basis, in that quarter alone.
And they’re just getting started. Nike is significantly expanding its e-commerce efforts this year by plowing into new online markets, launching new e-commerce sites for Canada, Switzerland, and Norway, and broadening its Nike.com coverage to include Mexico, Turkey, and Chile.
At the same time, Nike is leveraging its suite of Nike+ apps to connect with athletes and potential customers, and ramping up its great relationship with Apple.
“Digital, of course, also allows us to deepen the relationships we already have with consumers by tailoring every interaction to their specific needs,” said Parker, in a conversation with CNBC last May.
“Through Nike+ we have created an ecosystem that gives athletes access to their fitness history, training programs, and their favorite gear every time they connect with Nike,” he continued.
The appointment of Sussman, who is leading the development of Nike’s digital products and services across Nike.com, Nike+, and its Brand Digital platforms, highlights the current acceleration of all things digital within Nike’s global marketing strategy. According to Trevor Edwards, President of the NIKE Brand, “Adam’s wealth of experience in digital, consumer technology and strategy leadership makes him the perfect person to tackle tomorrow’s challenges today.”Before joining Nike, Sussman held positions in the interacting gaming and entertainment industries at EA Mobile and Disney Interactive.
And while Sussman’s approach may seem conservative compared to its competitors, it has obvious advantages. Nike is focusing on infrastructure, which is a key tenant of digital transformation.
The brand is keeping its sites on marketing basics — developing personalized relationships with their audience and connecting with users. Or, as Nike recently put it, they are “continuing to serve athletes deeper, better and more completely.”
If anyone can do it, Nike can.