How Nike became a mobile-first retailer
Nike has reported that mobile traffic to its ecommerce site exceeded desktop for the first time, signalling the company’s long-term efforts to cash in on cross-channel promotion are starting to take effect.
The sportswear maker has been working behind the scenes for some time to make mobile marketing a profitable channel and not just a fashionable one. From apps to a social media strategy primed to push fans to buy its products, Nike has made no secret of its bid to forge direct relationships with fans outside of its tie-ups with third party chains like Footlocker.
While online sales have become a core part of the business in recent years, the company has not been confident enough in its digital strategy to shout about mobile’s role as a growth driver until now. Nike.com sales were up 42 per cent in the three months to February, propelled by increased traffic and conversions from mobile visitors outmuscling desktop browsers for the first time.
The company’s chief executive Mark Palmer was quick to hail the impact of its SNKRS app, a one-stop shop for its fashionable footwear, on spurring traffic to the site in the period during its earning call yesterday evening (19 March). Given that the app had only been available for the last 10 days of Nike’s reported period, it is likely that a big bulk of the traffic was propelled by the army of bloggers and fashion influencers it has amassed alongside the carefully crafted Twitter and Facebook posts used to push visits back to its site.
The business prides itself on having an online presence that blends commerce and experience with most, if not all recent digital investments, mining the obsessive sneaker curation of its fans through personalisation. Where other brands are struggling to fit mobile into a crowded marketing mix, Nike has made space by making the channel serve a utility that gives them a reason to keep interacting with its marketing assets on a regular basis.
Nike’s brand president Trevor Edwards suggested as much when he told analysts on the same conference call that profitability from its ecommerce offering is “growing faster than the revenue”.
“We're continuing to drive both top line and bottom line on e-commerce,” he added.
“[Ecommerce] has been a winner both from a growth and a profitability standpoint. We are going to continue to invest in digital. We believe that's where the consumer is and is going. And that's where our brand is and is going. So we're going to continue to invest there. But from an economic standpoint, it's been a very positive driver for business both top line and bottom line.”
Mobile is the golden goose for Nike’s ecommerce strategy and is set for further investment in the coming months now that it is beginning to have a credible impact on the business. Digital communications, products and services are delivered in unison to deliver what the business has called the “premium personalised experiences” that it believes are pivotal to growth for years to come.
Parker said: “Overall, we continue to see tremendous potential for growth in our ecommerce business as we leverage our digital platform to continue to deliver premium products, services and experiences for our consumers.
“We'll continue to drive growth in our e-commerce business by increasing consumer access to product customization.”
In its latest for example, Nike beefed up its personalisation NIKEiD platform with additional options.
Nike’s mobile efforts were just one bright spot in yet another strong quarter. Revenue rose seven per cent to $7.5bn in in the period, driven by the Nike brand, which boasted an 11 per cent increase to $6.9bn.