“We tick like a tech company”

A few months earlier, Nike boss Mark Parker and chief financial officer Andy Campion had announced that they had reached another crucial milestone. Mobile commerce now accounts for more than half of online sales. „Wir ticken wie eine Tech-Company”

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Nike „Wir ticken wie eine Tech-Company”

World market leader takes stock

Nike: Digital pushes, domestic market disappoints „Wir ticken wie eine Tech-Company”

The industry leader continues its growth story - driven primarily by online business. A drop of bitterness is the business on the domestic market. It's not the only similarity Nike and rival Adidas currently have.

The smartphone as a success factor. And not just for “classic” online business: In its most recent spectacular retail destinations, the Houses of Innovation in Shanghai and New York, Nike is showing how mobile phones can also be used when shopping in stores. Be it to check the availability of certain sneakers or complete looks, to request personal advice or to make an appointment to customize products. Access to exclusive products in the store is just as much a part of the portfolio as the option of paying by app - without annoying waiting times. The success of linking app and store can be quantified: More than 50% of purchases in the Houses of Innovation are made by Nike made by Plus members. Above all, the networked customers buy more: those who interact with the app in the Nike store ensure an average of 40% higher sales. Developments that, according to digital boss Adam Sussman, were made possible primarily by Nike becoming more and more a company becomes.TextilWirtschaft: At the end of 2017, Mark Parker announced at the Investors' Day that by 2023 around a third of Nike's sales should come from digital platforms - both their own and those of partners. In retrospect, that's a conservative forecast, right?Adam Sussman: Customer acceptance of our digital business is growing incredibly fast - both in terms of inspiration on these channels and in terms of conversion. So we're really optimistic, especially since we've significantly improved our customers' experiences. If you look at our app portfolio today, it offers much better and more personal options than just a few years ago. Because we have brought the membership idea to life, i.e. the idea of ​​serving customers with new services and innovations on a personal level. And we have scaled this experience globally. You have just presented the new tool Nike Fit, in which the smartphone camera is intended to solve a major customer problem: What size is right for me? It couldn't be more personal. This is an excellent example of solving a customer problem on an individual level. Most importantly, we were able to make this solution immediately scalable so that it is not only accessible to a limited number of customers. If we continue to press ahead on this path - and we will do so - then it will be a decisive growth driver. „Wir ticken wie eine Tech-Company”

Find the right shoe with an app: This is how Nike Fit works

Nike „Wir ticken wie eine Tech-Company”

Nike Fit at Home: Stand against a wall, adjust the screen, scan your feet with your smartphone. Complete.

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Nike Fit will also be used for purchases in the Nike Store. „Wir ticken wie eine Tech-Company”

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Nike „Wir ticken wie eine Tech-Company”

The size suggested by Nike Fit is not a static size, but varies depending on the Nike model.

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Nike Fit Profiles. The result of the measurement is saved in the app. And off you go to the online purchase. „Wir ticken wie eine Tech-Company”

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Nike has launched many digital projects in recent months. The new Instagram checkout and improved Google Shopping feature are just two examples. Which of these projects has the greatest impact?We try to ensure that the customer, wherever they are, has the opportunity to experience our brand. But: The richest, deepest and most personal digital experiences are those within our own portfolio with the Nike app and the Snkrs app. It's grown over the past few years, and yet I think we've only scratched the surface of the possibilities for even more users to participate. Our focus is to continue to scale and improve these experiences. Because native app experiences make it possible to solve things on a much more personal level, more practically and smoothly than is otherwise possible. Scalable, digital experiences are all well and good. Nevertheless, Nike continues to invest in physical stores and has caused a stir with the two Houses of Innovation in Shanghai and New York. So it doesn't work without stores? One of our most important lessons learned was that the connection between digital and stores is crucial. When a customer walks into one of our stores, we cannot ignore their smartphone. So we have to ask ourselves how do we improve the customer's in-store experience using their smartphone. It must remove all critical friction points in the in-store customer journey, but also add elements of surprise. I'm excited about what we can offer with the Nike app today when you enter one of the Houses of Innovation or the Nike Live Store. Customers who interact with the app in the store generate higher lifetime value than those who use the app in isolation. Because we build a relationship with these customers, solve their problems, improve their experience. „Wir ticken wie eine Tech-Company”

Best of 2018: Nike in New York

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Where is the place for your wholesale partners within this model? Wholesale will always be part of our business model. We are focusing, this is nothing new, on a smaller number of partners with whom we are, however, deepening our relationship. We want to help bring the experience your customers have with you to the same level that we offer on our own channels. We are currently in this process. We are becoming more and more of a technology company. That also means that we don't start four projects at the same time. We act according to the maxim: "pilot, iterate, learn, scale". In other words: start, adjust, learn, roll out. What you learn makes you more agile and focused on the things with the greatest impact. We also want to bring these solutions, which improve the customer journey in the store, to our wholesale partners. Do wholesale partners who do not yet have an online business have any chance of surviving? Retailers who stand for something, extraordinary experiences, will survive create. Retailers who make people leave their homes and come to them. Those who can do it - we're talking about differentiated retail - will survive. We are retailers. And as a retailer, we are convinced that physical retail will always play a decisive role. And there are examples where we're specifically improving the customer experience in a partner's store with our digital offerings. Can you give an example of that? The Snkrs Pass is a perfect example. We have expanded it with some partners.Expanded with partners? To what extent and with whom? For example with the sneaker specialists Undefeated, Social Status, Atmos, Extra Butter and Concepts. The aim was to solve very specific problems for our customers. Firstly, many customers who are extremely passionate about the so-called high heat releases want to pay in cash, not with a credit card. Secondly, the experience they then had with the releases in the store wasn't always the best, let's put it that way, with extremely long queues and waiting times. The idea of ​​being able to reserve a pair, have a confirmation for it, just pick it up at the store and then pay with cash or card solves two problems. An example of how we bring our digital experience to a wholesale partner's store. In which areas does online play a more important role today? With those high heat releases or the basic products? Online plays an important role in the whole business. We've been able to grow because we've improved and truly renewed the consumer experience. The Snkrs app, for example, is aimed at a very specific target group, the sneaker community. The point here was to create experiences that have something playful about them. It was about reinventing the launch business and bringing the fun of hunting back to the shoe. That's what customers want. We have created such experiences with Snkrs Stash and Snkrs Cam, for example. In Germany, for example, the Abloh launch via Snkrs Stash was very successful. We find that if you bring the fun back, we see a high level of acceptance. Are there significant regional differences in customer wishes or in the use of the apps? Not really in America and Europe. We build global products. But of course local execution plays an important role. The connection to consumers is very close, especially in the big cities. For these communities we need to have the most relevant stories. We're always balancing scalability and local execution. The Nike retail app is coming to Germany this year. This will also be another building block for the team to offer customers in this country even more and even better service. However, business in China is subject to its own laws. Can anything work there without platforms like Tmall? In China, the ecosystem is actually different. We have a very important partnership with Tmall and we have launched a mini app on WeChat, which is showing excellent results. But China is also a very dynamic market. The launch of our Snkrs app in China was extremely successful. A year and a half ago, many would have said that we don't know whether it would be possible to establish oneself with digital stand-alone solutions in China, everything has to go through platforms. We always assumed we could because our brand is strong enough - now we've proven it. We will continue on this path and create a balanced ecosystem of platforms, partners and stand-alone solutions that is actually a specifically Chinese one. The recent launch of the Nike app in Japan is said to have been very successful. Is this an Asian phenomenon or is it the learning curve? In fact, we get better every time. We've now had a lot of app launches behind us - the Snkrs app is live in 21 countries, the Nike app will soon have a similar footprint - and we learn something new every time: How do we deal with the customers we once got into our channel - be it via paid acquisition, app stores, search engine optimization or organic reach - the deepest and best connection? In Japan, we had the highest retention rate of all time, so we were actually able to keep the newly acquired customers. In addition, we managed a massive shift towards apps within a very short time: we now make 62% of our digital sales in Japan via the two apps. That speaks to the level of consumer acceptance we can achieve. What do you think is the key to successfully executing Nike's digital strategy? I think it has a lot to do with how disciplined we are in this business. We're very focused on bringing things to market that really make an impact. This has a lot to do with the right prioritization and is driven by new KPIs that we have introduced in recent years. KPIs that focus much more on the customer. We've largely said goodbye to the idea of ​​anonymous traffic. It's about active and buying members, about lifetime value. All of this helps us to set the right priorities. Of course we don't do everything right. But we do everything fast.Speed ​​is crucial?Definitely. You start things that might not have the desired effect, learn from them, repeat them. In this agile model we do short sprints with features, called value drops, which are measured against the KPIs and then create a loop that is really short. The tighter that cycle is, the quicker you get out there with things and see what's working and what's not. And if you manage to keep this cycle really tight, it fuels innovation and evolution and ensures that resources are used optimally. Can you give an example of a project that was not immediately successful at the start? The Nike retail app is a great example. When we started with this, we had a list of services that our customers wanted. One of them was the ability to scan shoes to know if the shoe was even available in the right size, even without a salesperson. In the pilot phase, we worked with NFC technology, i.e. chips that were integrated into the shoes. But we quickly came to the conclusion that this is not the right way. So we changed direction and found that it is better to scan the UPC code with the smartphone camera. Because that enables us to roll out much faster than NFC technology.Speaking of NFC technology. As before, the chips are only used in the Connected NBA jerseys - apart from the football jerseys of Chelsea FC. Will there not be a roll-out of this technology? The question is always: what problem do you want to solve? That brings us back to the fact that we now operate like a tech company. So let's not talk about NFC technology as such, but what it is supposed to do. One great thing is that this technology 100% identifies every single product. There could also be uses for this in the future. But that doesn't necessarily sound like possible uses that make it possible to connect more closely with the customer. Our Connected Jerseys offer additional content for fans. But to what extent do you actually bind customers to you in this way? We learn about it every day. But we also learn what new possibilities computer vision, machine learning and AI offer. They allow us to do things today - keyword Nike Fit - that we thought only a short time ago could only be realized with NFC chips in the products. Today we see that the smartphone camera is enough. Here we are again with the scalability and the impact that each individual solution must have. All of this is part of the puzzle that we are constantly working on.