After online sales soar, Nike says consumers will not revert back to bricks-and-mortar
Nike has bounced back with a vengeance from a Covid-19 induced slump, reporting a staggering 82% jump in digital sales between June and August. This has offset lower traffic at physical stores, with the expectation it could become a permanent trend.
After online sales soar, Nike says consumers will not revert back to bricks-and-mortar
Nike numbers
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Nike outperformed analyst expectations for the quarter as net income climbed from $1.37bn to $1.52bn.
It wasn’t a total rebound as Nike’s revenue still fell 0.6% below last year’s, slipping from $10.66bn to $10.59bn. This still surpassed the expected haul of $9.15bn, however.
China played a strong role in the turnaround with sales there rising 6%, in stark contrast to North America where sales dipped 2%.
Changed circumstances have turbocharged Nike’s digital performance, with online sales accounting for 30% of its business in the quarter – a threshold that was not expected to be reached until 2023.
Direct sales have also been on the up and up, jumping 12% to reach $3.7bn as the brand works to reposition itself from being primarily a wholesaler.
A shift to digital, direct selling:
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In recent years, Nike has pivoted away from bricks-and-mortar retail partners in favour of investing in its own stores, as well as its website and apps.
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This approach culminated in Nike turning its back on the world’s largest retailer, Amazon, in November to focus on nurturing more personal consumer experiences.
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Nike chief executive John Donahoe has told investors he believes online habits have become hard-wired as much of the digital growth came after most retail stores had reopened.
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Donahoe remarked: “We know that digital is the new normal. The consumer today is digitally grounded and simply will not revert back.“
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Nike is not alone in registering profound shifts in consumer behaviour, with Lululemon, Dick’s Sporting Goods and Peloton all reporting strong demand for clothing and workout gear.
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This has been driven by a ’running boom’ as locked-out gym goers pound the pavement instead, bringing knock-on befits to the likes of Asics.
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