During Nike’s recent 2021 Q3 investor call, President and CEO John J. Donahoe revealed that Nike had passed $1 billion digital revenue in North America for the quarter and seen a 60% increase in monthly engaged users. Additionally, Nike’s digital business has grown more than 70% year to date and owned and partnered digital now exceeds 35% of Nike’s total business.
While COVID restrictions have driven many shoppers to digital, this doesn’t tell the whole story. Nike’s success is the result of a multi-year focus on digital strategy and apps. This strategy has paid dividends (literally), as the brand reported digital sales up by 82% in 2020 compared with 2019 and has continued to post impressive numbers at the start of 2021.
While the resources Nike has invested in its digital strategy are extreme, businesses can learn many lessons from the strategies they have employed and implement these on a smaller scale. Let’s take a look at how Nike has achieved this success:
Nike’s consumer direct offense
In 2017, the then President and CEO of Nike, Mark Palmer, announced its new strategy, the Consumer Direct Offense. This strategy’s objective was to help the company deliver a more personal experience at scale by doubling innovation, doubling product creation cycles, and doubling connections with customers (the so-called ‘triple double’ strategy).
Digital has been the focus of the third part of this strategy (increasing connections). Nike has expanded its digital reach by promoting and iterating its Nike App (originally released in 2016) and creating new ways to connect with customers. This has led to an entire ecosystem of apps, including SNKRS, Nike Training Club, and Nike Run Club, all of which are accessible via a single free membership profile, NikePlus, which also integrates with Nike.com.
Through the Nike app, NikePlus members can access in-store experiences that include requesting fitting rooms, stock checks, and special offers. The app also enables a personalized online shopping experience, suggesting and featuring products and special offers that are customized to a user’s past behavior.
Other apps, like the Nike Run Club, offer a more focused experience for users engaging in a specific activity. Nike Run Club helps runners set goals, track their runs, and receive coaching. Additionally, customers’ efforts can lead to rewards; special offers unlock when a person runs a certain distance or hits a milestone, encouraging users to make purchases online or in-person.
4 lessons businesses can learn from Nike’s strategy
Nike’s strategy has been extremely successful: Nike reports that NikePlus members spend three times more than guests when shopping on Nike.com. Ultimately, this comes from having a great strategy and executing on it well, and while the scale of implementation might differ for other businesses, there are plenty of important lessons that can be learned:
1. Engage with the customer on their journey
Nike recognises that a customer’s journey can start before they enter a store or decide to buy a Nike product for the first time. Apps like the Nike Training Club provide meaningful interactions and value to potential customers, regardless of whether they own Nike products. This builds up trust, even before a purchase has been made.
2. Apps must extend and align with in-store experiences
When a customer visits a store, they are rewarded for using the app with special offers and time-saving features (such as stock checks) that improve the experience. When using the apps, users are rewarded for going in-store or online through discounts and other benefits. Together, the different channels support each other and encourage customers to engage across multiple channels.
3. Apps should support the brand
At the time of writing, the Nike App is the 6th most popular app in the Shopping section on the Apple App Store and has almost 900,000 ratings with an average of 4.9/5.0. These stats reflect the care that has been taken to create a high-quality user experience that reflects and supports the Nike brand; a great app experience is a great brand experience. The reverse also applies: a poor app experience will reflect badly on your brand.
4. Mobile apps work better than ever before
The mobile app sector is expected to increase by $497 billion between 2020 and 2024. Customers are becoming increasingly used to using mobile apps in-store, not just to check stock or look up an item but also to access exclusive benefits and checkout through the app. A great website is an excellent asset, but it doesn’t replace an app – no one wants to waste time typing in an URL on their mobile while out shopping.
Nike would not have had the success they have had with apps if it weren’t for the multi-year commitment by their leadership. Nike developed their mobile apps not as a siloed project, or a short-term novelty, but as a high-quality channel that is as important as in-person and online. Businesses that succeed with mobile do so because it is part of their long-term strategy.
Apps offer a fantastic opportunity for retail brands, but only if you commit to executing your strategy. Like Nike, you must find ways to create meaningful interactions with your potential customers, provide them with clear benefits to using your app, and deliver a high-quality experience that reflects your brand.
About Highstreet Mobile
At Highstreet we empower fashion and lifestyle brands to offer their customers beautifully designed app experiences. Our App as-a-service platform facilitates unique interactions between a brand and its fans. Together we can create a shopping experience that offers delight and convenience to your customers.
Using Highstreet Mobile brands such as G-Star Raw, Jack & Jones, and Scotch & Soda have strengthened their connections with their customers, set new digital revenue records, and seen their mobile app grow to become their strongest digital channel.
Want to know more? Click here to read how we helped global jeans brand G-Star Raw achieve 3x higher engagement and 7x higher revenue with their mobile app (compared to mobile web).