Nike Pandemic-Proof delivers another strong quarter with 9% sales increase

Nike’s second-quarter results delivered a 9% increase over last year for the same period. Direct-to-consumer sales were up 32% and digital sales were up 84%. “NIKE’s strong results in a dynamic environment demonstrate the power to stay on top of crime,” said John Donahoe, president and CEO, NIKE, Inc. On the employment call, Nike considered staying with the current strategy that emphasizes continuous product innovation, initiatives that drive brand strength and increase membership in the loyalty program. Donahue said, “Product innovation and brand strength enable us to connect with our customers around the world. ”

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The just-to-spend model drives loyalty

Three years ago, Nike made a major shift in strategy by reducing the number of wholesale distributors, most recently including Amazon

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, to focus on the direct-to-consumer market. The brand went from more than 30,000 distributors to a focus of 40 of them. This pivot allowed Nike to take control of the brand and maintain close ties with the customers, a strategy known as “Consumer Direct Crimes”.

The connection to the buyer drives sales throughout the pandemic. In the Never Too Far Down ad, Nike highlights its enduring ability to understand the consumer situation. In the ad, Nike reminds us of what we can accomplish, a timely message that struck a chord with its global customers. The ad had over 7 billion brand views, by LeBron James, Serena Williams and Tiger Woods, and generated over 400 million social media interactions. Nike’s ability to communicate with the current global socio-cultural environment builds its deep sense with its customer base.

Loyal Nike members lead digital sales

Nike’s digital business allows the brand to continue to connect with its members and increase sales despite store closures and limited ownership. Nike has added more than 70 million members to its loyalty program this year. More than 60 million customers across 25 countries took part in Members’ Day, a new event that provided special selling times, first-hand access to products, exclusive products and additional prizes. Matt Friend, executive vice president and CFO of Nike, Inc.

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, considering the more than 100% growth in the North American digital industry that now represents 25% of total revenue. A key driver of the rise in digital sales comes from loyal Nike members and the use of the mobile app which grew 200% in their quarter.

Lululemon has a similar strategy in terms of maintaining a deep connection with customers, which has helped the brand close its pandemic stores and residential borders. The ability to reach customers digitally has been developed through apps, online shopping, kerbside building or in-house technologies that help enable buying and purchasing experiences. Lululemon, which is on a different financial calendar, recently posted 22% revenue growth for its Q3.

Keep traffic on a slow recovery with less usage and COVID issues rising

Even though Nike did not reveal details of traffic decline in stores on the employment call, Placer.ai can understand where people are buying by analyzing geolocation data. Ethan Chernofsky, vice president of marketing at Placer.ai, said, “Nike’s tours had pulled within an astonishing pace of 2019 levels by October with visits down just 1.9% year-over-year.” The athletic brands are Nike, Adidas, lululemon and Under Armor

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, outperforming the general apparel market which showed a 20-38% store visit in November, week-over-week.

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Chernofsky believes that while November marked a major step backwards in terms of traffic to stores, much of that was based on the particular heights reached during the ‘normal’ holiday season and recovery. COVID cases. Chernofsky looked at November performance data, noting that since November 2, Nike, Under Armor and Lululemon have outperformed the broader apparel segment each week in terms of year-round store visit numbers. over a year.

Athletic logos dominate the clothing segment

November retail sales (minus automobiles and gas) were up 2% compared to last year, but clothing and accessories were down 19.2%. So far in February through November, clothing sales were up 4.5% and clothing and apparel down 31%. However, major athletic brands have been able to see quarterly sales and quarterly sales trends compared to apparel markets. Sales results from lululemon in Q3 and Nike ‘s Q2 results are very strong compared to the current sales environment.

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Donahue says, “Deceived by strong product innovation and global brand movement, we continue to expand our leadership. Our strategy is working, and we are excited for the future. ”Nike is strongly focused on consumer engagement and the direct-to-consumer model and views these initiatives, along with ongoing product innovations, as drivers of positive financial results in the coming year. .

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