CHALLENGE

SNKRS: More personal at scale?

When it comes to revenue, profitability, market cap, number of employees, and other similar metrics, Nike is an absolute market leader in athletic shoes and sports apparel. Its revenue is more than the revenues generated by Adidas, Puma, Reebok, and Under Armour combined. The company's success is highly boosted by the brand popularity. Forecasts are good as the definition of sports is expanding and a growing focus on health, wellness, and comfort is creating a bigger market. At the same time, large competitors are dropping prices, stockpiles remain a big constraint on capital, and numerous niche players are taking a shot at specific audience groups. This demands Nike to keep moving.

Yet, Nike rarely starts innovating from scratch or spending millions of dollars on R&D. Nike prefers to look for new revenue streams by following or acquiring already successful initiatives. Once profitable, the company invests heavily in creating strong brand differentiators and overall customer experience.

The recent years, Nike has made a strategic move into a direct-business model. This new strategic initiative, called the Consumer Direct Offense, is fuelled by a Triple Double Strategy (2X Innovation, 2X Speed & 2X Direct connections with consumers). This demands greater focus on cultivating direct relationships with customers through various digital portals such as apps, websites, and official stores around the world. Per Andy Campion (Nike COO): 'Our vision is to create direct, unbreakable relationships with our consumers. And we know the most direct connection is through the mobile device they carry with them everywhere they go.'

The goal of what is now called 'Consumer Direct Acceleration' is to be able to target key markets, allow for more-direct relationships with the consumer, and deliver products faster than ever. As part of this new focus, Nike has been revamping their business model by tightening wholesale accounts while focusing more and more on in-house digital sales and direct-to-consumer revenue. The aim is to build a marketplace for the future that is transparent and much more relational with consumers, allowing for more specific targeting, all tightly integrated to accelerate digital transformation.

Digital communities, NIKE ID and the SNKRS mobile app play a central part of that strategy. SNKRS, an app to explore, buy and unlock the best of Nike sneakers, has become an absolute star performer in Nike's digital profile. It provides inside access to the latest launches, hottest events, and exclusive releases that Nike has to offer, creating scarcity and urgency, combined with the idea of giving sneakerheads the opportunity to show-off their knowhow. To increase engagement, the Nike experience is extending into digital communities and even virtual reality. Hence the new credo, 'All our shoppers will be gamers.'