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.
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:
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.
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.
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.
Donahoe remarked: “We know that digital is the new normal. The consumer today is digitally grounded and simply will not revert back.“
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.