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Case Study | Inside Nike’s Radical Direct-to-Consumer Strategy

• Chantal Fernandez

In October 2020, in the middle of a global pandemic that had infected 188 countries, causing record sales damage across the retail sector, Nike’s share price hit an all-time high.

Like other retailers, Nike had been forced to close most of its network of more than 900 stores across the world, as had its key wholesale partners like Nordstrom and Foot Locker.

But the American sportswear giant’s performance during the pandemic, when its online sales spiked, signalled to many that Nike had the competency to prosper long term, in a future that will be increasingly defined by e-commerce and digital brand connections.

It was a validation of a strategy that Nike prioritised three years ago, dubbing it “Consumer Direct Offense,” but the seeds of the approach go back almost a decade.

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Above all, Nike is a marketing company. It doesn’t just sell sneakers; it sells the brand aspiration that imbues those sneakers with meaning. But to achieve the reach required to scale its business, Nike’s distribution strategy had long-relied on third-party retailers to sell its products, even if the consumer experience offered by those partners diluted its brand.

But in a future increasingly defined by e-commerce, fast-moving trends and, above all, the rising power of branding to drive consumer preference when competitors are just a click away, Nike realised that in order to thrive, it needed to take control of its distribution to better manage its brand and deepen its connection with consumers.

It was definitely architecting a new retail, and a bold, retail vision for Nike.

Such an evolution is easier said than done, especially for a business as large as Nike in a category as competitive as sportswear. But by radically cutting back on its wholesale distribution and raising the bar for brand experience with the third-party partners that remained; expanding its focus on content, community and customisation to keep customers close; investing in its data analytics and logistics capabilities; and rethinking the role of the store as a brand stage, Nike drove a veritable direct-to-consumer revolution.

When the pandemic hit, these shifts went into overdrive.

“It was definitely architecting a new retail, and a bold, retail vision for Nike,” said Heidi O’Neill, Nike’s president of consumer and marketplace, and one of the most prominent executives leading the brand’s new strategy in recent years. “But it started with our consumer, and we knew that consumers wanted a more direct relationship with us today.”

In this case study, BoF breaks down Nike’s pioneering direct-to consumer strategy and how it has worked to the brand’s advantage, propelling its share price to new heights during the global crisis of 2020.

Click below to read the case study now.

• Mark Parker
• John Donahoe
• direct to consumer
• athletic apparel

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Please note you do not have access to teaching notes, co‐creating value through customers' experiences: the nike case.

Strategy & Leadership

ISSN : 1087-8572

Article publication date: 5 September 2008

This case aims to demonstrate how leading firms are learning how to sustain competitive advantage by co‐creating experiences of value with customers.

Design/methodology/approach

The shoe company Nike provides a glimpse of the next “best practices” of value co‐creation with customers. By engaging with informed, connected, and networked customers around the globe, Nike has found their shared experiences to be a new source of value.

The paper finds that customers are now informed, connected, networked, and empowered on a scale as never before, thanks to search engines, engagement platforms, the growth of internet‐based interest groups, and widespread high‐bandwidth communication and social interaction technologies. Customers have learned how to use these new tools to make their opinions and ideas heard.

Practical implications

A few leading companies like Nike are involving customers in the value creation process by offering Internet sites where they can share their interactions and experiences. These range from customers' ideas about how to improve or customize products to their feelings when they use products.). For Nike, the learning from these interactions creates new strategic capital. The company can now learn directly from customers' direct input on their preferences. Nike can build relationships and trust with the Nike+ community and experiment with new offerings, all the while enhancing its brand.

Originality/value

The strategic opportunity for Nike is to build and promote the use of Internet engagement platforms through which the firm can build customer relationships on a scale and scope as never before. Effectively managing these new initiatives initially posed a new challenge for Nike, a traditionally product‐centric organization. Now their viewpoint is reversed. “In the past the product was the end point of the consumer experience. Now it is the starting point.”

• Value added
• Customer information
• Social interaction
• Consumer marketing
• Customization

Ramaswamy, V. (2008), "Co‐creating value through customers' experiences: the Nike case", Strategy & Leadership , Vol. 36 No. 5, pp. 9-14. https://doi.org/10.1108/10878570810902068

Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited

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Nike Marketing Strategy 2024 - 7 Effective Findings from Case Studies

• 42 Comments
• Published on Sep 20 2023

Table of Contents

Nike marketing strategy: top effective findings from case studies, history of nike, goals and objectives - nike marketing strategy, nike’s target audience, nike marketing strategy: challenges, solutions, and its approaches, how nike’s marketing strategy evolved, how to apply the nike’s marketing strategy to your brand, growth and market reach, what to take.

Nike has taken an image of an athleisure company and an American multinational corporation, but, the brand has taken way the world with inspiration, emotion, diversity, and unity with its simple marketing campaigns.

The core purpose of Nike marketing strategy is to keep moving the world forward. Over the years, it has launched and introduced various stylish and sustainable services from remembering the Swoosh, and the tagline ” Just Do It” which does not only come into our mind.

Enlisting the action of Nike's marketing strategies is remarkable. What makes it so special to get the products?

There are multiple reasons why people buy Nike products in this case study explained, but, one absolutely convincing means is that it is more than a brand that builds communities, planet protection, and makes sports accessible beyond diverse horizons. We have also discussed the top Nike Marketing Strategies that you can learn in 2024.

Purpose of the Article

The main aim of this article by Sprintzeal caters to information as social proof from various case studies about a process, product, or service that can resolve marketing issues.

Known as one of the largest athletic apparel companies,  Nike (Nike, Inc.)  is an American multinational association that deals with the design, development, manufacture, and global marketing and sales of footwear, accessories, apparel, equipment, and services. Began with a mission to, “bring inspiration and innovation to every athlete” in the world It is based in Beaverton, Oregon, NIKE, Inc. includes the Nike, Converse, and Jordan brands, and many more. 

It was founded by Bill Bowerman and his former student Phil Knight in 1964.

Nike plans to build a 3.2 million square foot expansion to its World Headquarters in Beaverton.

The Nike brand strategy focuses on bringing the culture of the invention to today’s athletes while solving issues for the upcoming generation.

Nike has acquired and sold several footwear and apparel companies over the years. It has also acquired Starter, Zodiac, Celect, and Datalogue and purchased RTFKT Studios.

It was founded in 1964 by Bill Bowerman, a track-and-field coach at the University of Oregon, and his former student Phil Knight as Blue Ribbon Sports. The brand was rebranded in the 60s, their company was relaunched as Nike in 1971.

In 1972, Blue Ribbon sports which later became Nike unveils "Moon Shoes

In 1974, the Waffle Trainer was patented, featuring Bill's famous Waffle outsole.

In 1982, introduced the Air Force 1 basketball shoe.

In 1994, Nike signs LeBron James

In 2000, launched Nike Shox in the market.

In 2008, introduced the Flyware shoe and signs Derek Jeter

In 2018, introduced React Element 87. Nike launched a new "Just do it" ad campaign featuring Colin Kaepernick.

In 2020, Nike Air-max 97G "Peace and love" was introduced. It also reveals uniforms for the 2020 Tokyo Olympics.

The main priorities and objectives of Nike marketing strategy,

• It includes promoting diversity, equity, and inclusion.
• Innovations that create sustainable materials and approaches to tackle environmental impact.
• Towards advancing a transparent and responsible supply chain.
• To build community by investing in organizations that pay efforts on economic empowerment, education, and equality.
• Uplifts unity with the current generation through sport and encourages an active lifestyle to reach their potential future.

To truly understand the effectiveness of Nike's marketing strategy, it's crucial to dissect the various segments within their vast target audience. Nike's ability to connect with different consumer groups is a central theme in this Nike marketing strategy case study. Let's delve deeper into these segments:

Athletes, Professionals, and Enthusiasts: Nike casts a wide net, catering to athletes at all levels, from elite professionals to passionate enthusiasts. Their product range is meticulously designed to enhance athletic performance, making Nike the preferred choice for athletes worldwide.

Running Enthusiasts: Nike's dominance in the running domain is unparalleled. They offer an extensive selection of running shoes, apparel, and accessories tailored to the specific needs of runners, whether they're seasoned marathoners or occasional joggers.

Sports Enthusiasts: Beyond athletes, Nike appeals to anyone with a fervent passion for sports. Their marketing efforts invite individuals to adopt the mindset of an athlete, whether they actively engage in sports or simply lead an active lifestyle.

Women in Sports: Recognizing the growing influence of women in sports, Nike has dedicated a significant portion of their marketing efforts to empower female athletes and sports enthusiasts.

Young Athletes: Nike understands the importance of cultivating brand loyalty from a young age. Their marketing strategies are crafted to inspire and engage young athletes, nurturing a lifelong connection to the brand.

Sustainability Advocates: In recent years, Nike has expanded its reach to consumers who prioritize sustainability and ethical practices. Their marketing seamlessly integrates these values, resonating with the environmentally conscious audience.

This diverse and inclusive approach to their target audience has been a pivotal factor in the success of Nike's marketing strategy. It showcases their ability to resonate with a wide range of consumers, from professional athletes to environmentally conscious individuals.

Striving to create more eco-friendly materials as possible, bioplastic for their sneakers is used as a replacement for plastic, leather, and other materials.

Well known for the fact that Nike promotes its products through sponsorship agreements with influencing athletes, professional teams, and athletic teams.

- High level competition of Nike with Adidas and Reebok and other companies with the closely similar product line and common target markets. 

- Limited exports of Nike products due to legal restrictions can be one reason for fewer sales or revenues.

- The economic and political situation of those countries manufacturing Nike products is also one main challenge.

- Being a global brand, controversies are sensitive to the company image.

Hence, these is some of the reasons why strategies are relevant for Nike.

The questions still arise, why do people go after Nike products even if several brands apply the same approach? Does Nike market segmentation do it differently?

With being able to pull effective  Nike marketing plan  guidelines over past years; the other part also had faced consequences and drove up on solutions-making with,

1) Advertising

One of the key parts of the  Nike advertising strategy  is advertising through television ads and other social media forms with affiliate marketing.

In 1982, Nike aired its first three national television ads during the broadcast of the New York Marathon.

2) New Media Marketing

Having to understand the importance of having different mediums along with display advertising, content marketing, and social media promotions, boosts Nike global marketing strategy in the right direction.

Nike is risk-taker, with the way to early application of internet marketing, email management technologies, narrowcast communication technologies, and broadcast to build multimedia marketing campaigns.

3) Emotional Branding

How undeniable that Nike always puts powerful emotions through the brand! The advertisement seldomly briefs on its products and services.

A few of the best ads and commercials from Nike quotes for motivation, inspiration, and greatness can be:

“We gave up giving up”,

“All you have to do is pick up your feet.”

“My better is better than your better.”

“Don’t believe you have to be like anybody to be somebody.”

The building of the right emotions by Nike effortlessly comes through curated content and narrative that again narrates a story; a tale of inspiration applicable to anyone to combat their challenges and meet their victory.

Instead, Nike emotional branding has been impactive followed as an effective strategy in the world of marketing at present. It inturns invokes emotions related to success, morale, victory, and self-improvement which makes it a powerful product.

4) Nike Target Market Segmentation

One thing marketers should learn from  nike segmentation targeting and positioning 

is understanding their customer.

And, Nike focuses very well on their main target markets for their product and services i.e., athletes, runners, and sports enthusiasts.

In the running years, it enlarges strategies to lead precise market segments for runners, women, and young athletes. 

An observation is taken into action to create that meets the custom interests as per customer requirements.

5) Convey a Story

To have been accompanied by a global audience, another marketing strategy applies by conveying the story in simple and effective points rather than using descriptive or jargon with their brand voice.

In this way, they connect and try to encourage the masses to chase their dreams and “Just do it”.

An instance as shown in the above image; another excellent technique is their tagline which builds an emotional marketing story that relates to anyone to catch their dream and build customer loyalty,

6) Newsworthiness

This brand strategy uses newsworthiness to impact and appeal to a story. In most cases, it uses recent events or happenings about what people need or want to know.

It is also tricky to decide what stories to cover, but Nike evaluates and continues with newsworthy stories before the release to avoid controversies or false information.

This pattern could be applied based on events that impact your readers all over the world

7) Invest in Customer Loyalty

In Nike, it associates with diverse masses apart from the target audience. Does it have good customer loyalty? Yes. 

With less loyal customers, the challenge to come up with anticipatory decisions and effectively plan your finances can be scary.

One of the reasons the brand is irresistible globally till current which is less surprising is sole because of customer loyalty. The precise, well-executed product and service not only attract new customers but retain customers with good profit margins.

- Nike is releasing “No Finish Line,” a new book that celebrates and figures Nike’s 50 years of game-changing design and innovation in the favor of athletes and sports. It lay down a design vision for the next 50 years.

- It applies measures to create a better future by investing in active and inclusive communities. Nike Community Impact Fund (NCIF), an employee-led and neighborhood-focused approach 

in aid of local community organizations globally for a positive, effective, and making a play for all the kids.

- Nike made about 35% digital and aims to achieve 50% by 2025.

One of the best ephemeral approaches is that a part of Nike’s success goes to influencing and inspirational athletes such as Michael Jordan, Mia Hamm, Roger Federer, Tiger Woods, Kobe Bryant, Lebron James, and many others.

To truly appreciate the efficacy of Nike's marketing strategy, it's essential to trace the evolutionary path it has taken over the years. This retrospective analysis of Nike's marketing strategy is integral to our Nike marketing strategy case study. Here is a comprehensive exploration of the evolution of Nike's marketing approach:

The Early Years: Nike's origins can be traced back to its predecessor, Blue Ribbon Sports, which primarily served as a distributor of Japanese running shoes. During this nascent phase, Nike's strategy was firmly rooted in performance and innovation.

The Birth of Nike: In 1971, Nike emerged as a distinct entity, drawing inspiration from the Greek goddess of victory. This marked the inception of Nike's emphasis on empowerment and achievement, an approach that would become central to their branding.

Celebrities Take Center Stage: The 1980s heralded a new era for Nike, marked by the strategic use of celebrity endorsements, most notably with basketball icon Michael Jordan. These high-profile endorsements solidified a deep emotional connection between Nike and consumers.

The "Just Do It" Era: In 1988, Nike introduced its iconic "Just Do It" slogan, encapsulating the ethos of personal determination and resilience. Swiftly, it became synonymous with the brand's identity and mission.

Digital Transformation: Nike was an early adopter of digital marketing, recognizing the potential of the internet and social media. They harnessed these platforms to engage consumers through multimedia campaigns and create a digital presence that mirrored their innovative spirit.

Emotional Branding: Nike's pivot towards emotional branding represented a pivotal moment in their marketing evolution. Rather than simply showcasing products, they focused on evoking powerful emotions, such as success, motivation, and self-improvement. This shift solidified Nike as a potent and influential brand.

Sustainability and Inclusivity: In recent years, Nike has demonstrated a commitment to sustainability and inclusivity, both in their products and marketing. They aim to create eco-friendly products and promote social responsibility, aligning with the evolving values of today's consumers.

This journey of evolution highlights Nike's remarkable adaptability and capacity to align their strategy with changing consumer landscapes. From their roots in performance and innovation to their current focus on emotional branding, sustainability, and inclusivity, Nike's marketing strategy has continued to resonate with a diverse and ever-changing audience.

To harness the power of Nike's potent marketing strategy for your own brand, it's essential to follow a well-defined blueprint. This section of our Nike marketing strategy case study provides a step-by-step guide on how to apply Nike's principles to your brand effectively:

Know Your Audience Inside Out: Much like Nike, start by conducting thorough market research to understand your target audience's specific needs, preferences, and aspirations. Tailor your products and marketing strategies accordingly.

Forge an Emotional Connection: Take a page from Nike's playbook and aim to create profound emotional connections with your audience. Share compelling stories that resonate with your brand's mission and values, inspiring and motivating your customers.

Embrace the Digital Realm: Leverage the expansive digital landscape, including social media, content marketing, and multimedia campaigns, to amplify your brand's reach. Follow Nike's lead in utilizing these platforms effectively to engage and captivate your audience.

Champion Sustainability and Social Responsibility: If your brand aligns with sustainability and social causes, make them integral to your strategy. Showcase your commitment to positive change through sustainable practices and support for relevant social issues.

Consistency is Key: Maintain a consistent brand image and message across all marketing channels. This consistency not only reinforces your brand identity but also leaves a lasting impression on your audience.

Prioritize Innovation: Continuous innovation should be at the heart of your strategy, much like Nike's dedication to pushing the boundaries. Innovate your products and marketing strategies to stay relevant and capture the full attention of your audience.

Leverage Influencers and Celebrities: Collaborate with influencers or celebrities whose values align seamlessly with your brand's mission. This partnership can help expand your reach and enhance your brand's credibility, similar to Nike's successful partnerships with iconic athletes.

By following these steps, you can effectively incorporate the power of Nike's marketing strategy into your own brand. Building a successful brand, as exemplified in this Nike marketing strategy case study, requires a strategic approach, unwavering dedication, and a profound understanding of your audience's aspirations and needs.

Don't Wait, Just Do It

In the ever-changing field of marketing, the key to success is action. Much like Nike urges you to take action; we encourage you to propel your digital marketing career forward by enrolling in Sprintzeal's Digital Marketing Course. Don’t let your hesitation cost you your opportunities.

Equip yourself with the skills, knowledge, and confidence excel in the digital marketing domain. We curate and design our courseware to ensure you're well-prepared for the dynamic world of digital marketing. So, why delay? Enroll now , and allow us to help you make your career in digital marketing.

As per  Wikipedia , During the Q1 of 2020, the company's online sales have grown by 36%. While the net income in mil. is $6,046 and revenue is $46,710 in 2022. 

As per the Forbes report, Nike's Financial Summary for 2022, the revenue is $46.9 billion with assets of $38.6 billion and profits of $6.1 billion.

The following image gives a glance at the percentage growth with the approaches.

Image Source:  Nike

Final Results

During the article study, we also found that problems may occur subsequently with changes made to the distribution, marketing, and management strategies of Nike.

Companies can refer to Nike's marketing strategy to influence the four Ps i.e, price, product, promotion, and place. New features may expand the changes to higher growth of the product and might develop a new market.

Source 1:  Nike-A Case Study Just Do It

Source 2:  Nike Marketing Case Study

Source 3:  An Investment Analysis Case Study: Nike - NYU Stern

Research Details

This article emphasizes curated study from three case studies apart from Nike’s official website.

Therefore, all the effective strategies are presented for information and education means for readers in response to the current marketing issues along with the given references in this article.

Winning the market is one technique that Nike has been doing so well since its implementation till date. What’s even interesting is having to market its products under its various brands and subsidiaries.

The subsidiaries like Nike+, Nike Golf, Nike Blazers, Nike Pro, Air Jordan, Air Max, and other brands like  Hurley Int., Jordan, and Converse.

In the field of such marketing, digital marketing plays a dominant role. To pursue a career in digital marketing training, choosing from a globally recognized ATO (An accredited training organization) from  Sprintzeal  accelerates your career of interest.

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Nike: An Innovation Journey

• First Online: 29 November 2017

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Part of the book series: Palgrave Studies in Practice: Global Fashion Brand Management ((PSP:GFBM))

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Nike is an American multinational company that has evolved to become a global leader in athletic wear with annual sales exceeding $21 billion in 2016, more than half of which is attributed to international markets. Since its inception in 1964, Nike has been an innovation leader in product development, marketing and consumer experience. Due to a dedication to continuous innovation, Nike has been able to sustain a competitive advantage within the athletic apparel and footwear marketplace. This case highlights key points in Nike’s journey of innovation and examines how Nike has successfully emerged as a global champion within the athletic wear industry. Based on these analyzed strategies, this case provides implications that are relevant for practitioners and academics.

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In 1928 in Chicago, IL, Cole Haan was established by two founders—Trafton Cole and Eddie Haan. The company focused exclusively on men’s footwear before expanding into women’s footwear in 1979 (Shoemetro, 2016 ).

Bauer was founded out of Kitchener, Ontario, Canada in 1927 and was the first company to make hockey skates that had a permanent blade attached to the boot, an innovation that changed the industry (Ozanian, 2012 ).

The Jordan brand was launched in 1984 when basketball star Michael Jordan signed a contract with Nike. An outcome of this five-year, $2.5 million deal was a brand new line of shoes called Air Jordan (Footlocker, 2017 ).

With roots in beach culture, Hurley was established in Southern California in 1999 by Bob Hurley. Initially, it was known for surf-related products but eventually became a youth lifestyle brand (Transworld Survey, 2002 ).

Converse began in 1908 near Boston, MA as a rubber shoe company that specialized in galoshes. The brand expanded to sneakers and basketball shoes starting in 1920 (Converse, 2017 ).

Founded in New Haven, CT by David Beckerman in 1971, Starter first manufactured team uniforms for high schools and eventually entered into licensing agreements with professional sports teams (Reference for Business, 1995 ).

Originally founded in Wilmslow, Manchester, UK in 1920 as Humphrey Brothers Clothing, the company was later renamed Umbro in 1924. The company was one of the earliest to provide professional clubs with soccer gear (Hunt, 2009 ).

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Childs, M., Jin, B. (2018). Nike: An Innovation Journey. In: Jin, B., Cedrola, E. (eds) Product Innovation in the Global Fashion Industry. Palgrave Studies in Practice: Global Fashion Brand Management . Palgrave Pivot, New York. https://doi.org/10.1057/978-1-137-52349-5_4

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Artificial Intelligence at Nike – Two Current Use-Cases

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Nike was founded as Blue Ribbon Sports in 1964 and originally operated as a distributor for athletic shoes made by a Japanese firm. By 1971, Nike sold its own line of shoes and began using the company’s iconic Swoosh design. By the time Nike went public in 1980, the company had achieved a 50% market share in its domestic athletic shoe market.   

As of 2021, Nike trades on the NYSE with a market cap that exceeds $245 billion. For the fiscal year ended May 31, 2021, Nike reported revenues of $44.5 billion, according to its Fiscal Year 2021 10-K .

This article will examine how Nike has applied AI technology to its business and industry through two unique use-cases:

• Finding the Right Fit — Nike uses a combination of artificial intelligence technologies to help its customers quickly find the right fit and to save time and money in return processing and restocking expenses. 
• Customizing the Customer Experience through Data Mining — Since 2018, Nike has acquired technology, tools, and expertise in data science and analytics to drive a more personalized experience for its customers. 

We will begin by examining how Nike has turned to computer vision, machine learning, data science, artificial intelligence, and recommender models to help customers buy its shoes with increased confidence that they will find the right fit. 

Finding the Right Fit

Sixty percent of people wear the wrong size shoe, according to Nike , and, every year, some 500,000 people say they’ve purchased their shoes in the wrong size. Nike blames this uncomfortable problem on antiquated, two-dimensional shoe sizing. Sizing a shoe is a “gross simplification of a complex problem,” the company writes in a May 2019 press release.  

That’s why Nike created its Nike Fit tool. Nike claims that the solution, integrated within its larger Nike app, will find the right fit for its customers and show them what products will look like on their feet by combining: 

• Computer vision 
• Machine learning 
• Data science 
• Artificial intelligence 
• Recommender models 
• Augmented reality 

Planning for the tool had been in the works since at least 2018. In its Q1 2020 Earnings Call, Mark Parker, then the company’s President, Chairman, and CEO, credited the April 2018 acquisition of Israel-based Invertex Ltd. with bringing to Nike the computer vision capabilities used in Nike Fit.   

The Nike Fit tool, said Parker on that earnings call, “scans the foot, eliminating a significant consumer friction point by providing an accurate read of a user’s shoe size.” At that point in late September 2019, the tool had expanded to all locations in North America and was being implemented in Europe and Japan. 

The Nike Fit app instructs users to stand against a wall while they line up their feet with the guides on their smartphone’s screen using the tool’s augmented reality (AR) technology. When the app gives the go-ahead, the user takes a photo and Nike Fit then uses computer vision to scan the customer’s feet and collect 13 visual data points, using their smartphone’s camera, Nike claims . Earlier Invertex documentation suggests that the tool “build[s] an accurate 3D model and extract length, width and height measurements.”  

The tool then stores that data within the Nike app so that it is available to help with sizing future potential purchases. When customers explore new styles, Nike claims that the tool will offer a “best fit for you” option. The technology is also available in-store where users stand on a mat while a Nike sales associate scans their feet with a handheld device. The tool’s size and fit predictions will improve over time as its machine learning capabilities benefit from experience. 

Nike does not share data that show whether the Nike Fit app has reduced return rates resulting from customer purchases or improved efficiency among sales associates who, presumably, might not have to make as many trips back and forth to its storerooms to find the right-sized shoe for each customer. 

However, Nike, explaining its vision for the tool, says : “In the short term, Nike Fit will improve the way Nike designs, manufactures, and sells shoes — product better tailored to match consumer needs. A more accurate fit can contribute to everything from less shipping and fewer returns to better performance.” 

Customizing the Customer Experience through Data Mining

Consumer data comes to Nike from many sources—its app ecosystem, enterprise data, and data from its supply chain. Generating and harnessing this data can be a great boon to companies like Nike with its global omnichannel marketing strategies and capabilities. However, when companies turn to analyzing this data and forming actionable conclusions, they sometimes fail in extracting useful insights and developing next steps. 

This can be especially true for Nike as the company expands beyond the retail and wholesale partnerships that have brought the footwear manufacturer expansive growth in past decades. Today, the company moves ahead with a new strategy, Nike Direct—its rapidly developing direct-to-consumer sales channel, and part of its Consumer Direct Offense strategy, announced in 2017.

 As with many other direct-to-consumer retail firms, some of Nike’s biggest opportunities for offering a personalized shopping experience lie in product recommendations and the results generated by product search. In back-office operations, Nike looks to build on its abilities to predict customer behaviors and optimize its inventories. 

To deliver on these objectives, Nike set out to obtain the talent and tools it needs, acquiring four data science and analytics firms since 2018, says John J. Donahoe, Nike’s President and CEO on its Q3 2021 Earnings Call: 

“Datalogue is our fourth data and analytics acquisition over the past couple of years and they use machine learning to help automate, translating raw data into critical and actionable insights and doing it real-time at enterprise scale.” 

The other firms included: 

• Invertex , an Israeli computer vision company, 
• Zodiac , a consumer data analytics firm in 2018, and 
• Celect , a Boston-based predictive analytics and demand-sensing firm, in 2019. 

Invertex brought Nike “powerful 3d scanning technology that creates accurate models of one’s anatomy” according to its archived website and this led directly to the creation of Nike Fit (detailed above). The Zodiac platform projects revenue streams at the individual-customer level by applying predictive behavioral models and customer analytics to target data. Meanwhile, Celect aimed to optimize inventories by predicting future demand through the application of machine learning algorithms to a firm’s existing data, according to the company’s archived website from late 2018.  

Below, a video from Nike acquisition Celect explains how the platform claims to better predict shopping behavior:

Add to this an internal reorganization initiative that has joined data teams with their design counterparts and you begin to see Nike’s vision of building their Nike Direct business through the insights, talent, and tools the company hopes to gain through these strategic acquisitions.  

By integrating the technologies they’ve acquired through these strategic acquisitions, Nike aims to put their vast stores of data to work in creating personalized recommendations that resonate with its customers and in enhancing internal product design and logistics strategies to support demand. Ultimately, Nike hopes to grow revenue and market share through both organic and acquired skillsets and tools. 

Although he did not go into specific financial results during the Nike Q2 2021 Earnings Call, Matthew Friend, Nike’s Executive Vice President and Chief Financial Officer, responded to an analyst’s question by elaborating on Nike’s predictive demand and inventory strategies:   

“Getting consumers what they want, where they want and how they want. We’re investing in technology in the supply chain, so that we can better predict where to put inventory, where we think consumers want the inventory, and the benefits for us in that are in gross margin. It’s more full-price realization, it’s lower cost to fulfill, and frankly, it’s better for the environment because it’s less shipping and it’s less moving stuff. We’re investing in technology, to create O2O (online to offline) capabilities in the marketplace.”  

Elaborating on Nike’s customer acquisition strategies, Matthew Friend continued:

“​​​​​​​​We’re investing a lot of money in digital marketing today, but the marketing, the opportunity that we see with greater acknowledgment of who our consumers are and how they shop across the marketplace is more personalization and it’s a greater return on those marketing dollars because we’re moving deeper into the funnel, we know who those consumers are, and we have the ability to react and reengage them at a lower cost to us or a lower acquisition cost.” 

In the area of its business most targeted by consumer personalization, “NIKE Direct grew 30% [in Fiscal 2021] on a currency-neutral basis, driven by 60% growth in Digital,” the company writes in its 2021 10K. 

In the last three years, Nike Direct sales have grown considerably, from $11.7 billion in Fiscal 2019 to $16.3 billion in Fiscal 2021. Nike Direct revenues now represent more than a 38% share of Total Nike Brand revenues, up from 31.5% two years ago. 

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Loading market data for reporting 5 hours faster, about nasdaq, benefits of aws.

• Ingests 70 billion records per day
• Loads financial market data 5 hours faster
• Runs Amazon Redshift queries 32 percent faster
• Enables business transformation with shared data
• Spurs innovation with additional use cases

AWS Services Used

Amazon simple storage service.

Amazon Simple Storage Service (Amazon S3) is an object storage service that offers industry-leading scalability, data availability, security, and performance.

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Amazon Redshift

Amazon Redshift gives you the best of high performance data warehouses with the unlimited flexibility and scalability of data lake storage.

AWS Identity and Access Management

AWS Identity and Access Management ( IAM ) enables you to manage access to AWS services and resources securely.

Amazon S3 Glacier

Amazon S3 Glacier and S3 Glacier Deep Archive are a secure, durable, and extremely low-cost Amazon S3 cloud storage classes for data archiving and long-term backup.

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