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3 ways Nike uses consumer insights to design new shoes
Data helps Nike answer, "Who are the consumers we want to serve and what are they looking for?" said CEO John Donahoe.
Nike posted strong results in digital sales in its most recent quarter, as the apparel and footwear brand recorded 24% growth across apps and mobile.
At Nike, digital is a key part of the direct-to-consumer strategy that has become a priority for the brand in recent years as it exited or scaled back several important longtime wholesale partners.
“Looking ahead, [our Consumer Direct Acceleration strategy] continues to unlock our future growth potential by powering up our holistic offense across innovation, brand engagement and marketplace, all fueled by consumer insight,” CEO John Donahoe told analysts on the company’s recent earnings call. “As we know, consumers today have rising expectations and changing behaviors. What creates separation for Nike in this dynamic environment is our innovative product, brand scale and direct connections we have with our consumers.”
A key piece of this is customer data. This information is not only being harnessed to drive sales. Consumer insights play a growing role in the innovation process that creates new products. Talking to customers is nothing new among brands, but Nike's membership programs and other outreach efforts give it unique scale in identifying the next trends.
“Thanks to our consumers' love of our brand, we enjoy a high rate of engagement, fueling richer, deeper understanding,” Donahoe said. “Across the company, our insights model creates confidence in growth in ways that are uniquely Nike as we make the entire enterprise faster, more efficient and more targeted in the growth opportunities that we go after.”
Nike’s approach offers a window into how brands can leverage data that is gathered directly from customers. Known as first or zero-party data, this type of data is gaining increasing importance as third-party cookies and identity-based tracking tools fall out of favor due to privacy concerns.
Donahoe offered a look at three areas where Nike is using consumer insights:
In running, Nike is applying insight from the Nike Run Club app, as well as consumer feedback across brand touchpoints and marketplaces. When it found that Invincible wearers were putting more mileage on their shoes, it rolled out a new edition that was designed to provide more cushioning and comfort.
“Consumer response to the Invincible 3 was strong across our geos and throughout Nike Direct, strategic wholesale partners and running specialty doors,” Donahoe said. “And what really sets Invincible 3 apart is how we executed across the marketplace, driving consistent storytelling across channels, working closely with our partners to elevate our own retail presentation and theirs, all with a sharp focus on helping consumers find the right shoe for them.”
Runner feedback also led to the launch of a new shoe in complementary categories, such as the fast-growing trail running segment. This led to the launch of the Pegasus Trail 4, which is proving to be particularly popular among women.
In basketball, Nike is talking directly with athletes. They identified three key aspects of the game: cutting fast, playing long and jumping high. For instance, talking directly with WNBA star Sabrina Ionescu led to a shoe designed for cutting on a dime.
Air Max, which is an iconic Nike line, is “a great example of how we build significantly scaled businesses off our greatest performance innovations."
Using insights, the brand leverages qualitative and quantitative member data science as part of the brief process.
“We're able to ask ourselves, who are the consumers we want to serve and what are they looking for?” Donahoe said.
To create a shoe that is launching next week called Design by Japan Air Max 1 '87, Nike used polling data from the SNKRS app and local member surveys. At launch, the members who participated will be the first customers.
“Members who participated will be the first targeted for the shoe, creating NIKE's first full circle insights-to-shopping experience,” Donahoe said.
That’s how data shows up in what the consumer buys.