The Nike’s Just Do It Strategy of Controlling and Influencing Demand

The Nike’s Just Do It Strategy of Controlling and Influencing Demand

Nike experienced a massive increase, and that is a huge lesson for everyone. The athletics wear leader grew its online sales by 83%, adding $900 million to the company’s top line last quarter. Simply, e-commerce is now 30% of Nike’s sales. It got there three years faster. Two things drove this redesign:

  • Nike developed athletic training apps. This is a consolidation – bring the training inhouse, and make sure your users do not need to go out looking for training apps.
  • Puts its destiny in its own hand by opening Nike stores, shifting away from wholesalers like Macy’s.

While most brands have simply made their apps and e-commerce sites shopping tools, Nike has long understood that digital tools must do more than just support sales and have to insinuate themselves into customers’ lifestyles to really pay off. Otherwise, e-commerce growth often just means business going from one avenue to another, rather than growing the overall pie.

A few years ago, the sneaker maker launched its online NikePlus program, a membership program with tens of millions of members that has helped the company better understand each customer’s interests and shopping patterns, and ultimately sell them more of its products.

Nike is also benefiting wildly from tools like its Nike Training Club App and a running app that offers self-guided runs. Donahoe said more than half of the training club app members had done a workout using the app last quarter. That fosters loyalty with customers and keeps Nike top of mind—as well as filtering users to its commerce site.

If you check what is happening here, Nike is doing more by itself. Sometimes, in this age where supply is not the core issue (controlling demand matters more), finding a way to build your own consumer tribe could be rewarding. Invest not just on your supply part, but also on your demand part, because if you can influence DEMAND, you can sell more. Yes, as those using Nike’s apps for training congregate daily, the Nike’s logo is seen by them, even though the next shoe purchase may be coming in the next 12 months.

For decades, Nike focused on supply, using department stores to sell its products. Today, while that supply element remains, Nike 2.0 is also about controlling the demand experience. And that is why this firm is elevating the game. Across sectors and industries, a strategy to find a way to stay closer to demand is now critical for survival.

 

Share this post

4 thoughts on “The Nike’s Just Do It Strategy of Controlling and Influencing Demand

  1. Nike has people with foresight in its fold, it realised that there’s a massive brand equity worth monetizing, and it went for the kill!

    The big lesson here is that many brands are running at just ten percent of their full capacities, without actually being aware; so they keep applauding themselves, doing fist pump in the air.

    Maybe Nike finally picked some lessons from what Amancio Ortega did with Zara brand. It’s about owning your customers, without giving them much room to think about alternatives.

    Once you add those who think differently to your team, you realise that you have been running with handbrake on for ages.

    It takes an extraordinary talent to see uncommon value, get at least one in your team!

    Reply
    1. “Maybe Nike finally picked some lessons from what Amancio Ortega did with Zara brand. It’s about owning your customers, without giving them much room to think about alternatives.” – that is the strategy/ Always great reading from Francis on this site. Thanks man

      Reply
  2. The key thing is all about customer data. Those Nike apps have enabled Nike tap into huge volumes of data and information about their customers which have now enabled to developed the intelligence to better understand their customers and continue offering them everything that they can think or imagine. This is similar to the concept of Amazon; providing all the alternatives and choices in the world whilst all the money and profit comes to you.

    Reply

Post Comment