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Don’t waste another dime on bloated channel reporting and vanity metrics.
Don’t waste another dime on bloated channel reporting and vanity metrics.
Membership growth helped drive 34% digital growth in Nike's most recent quarter.
For Nike, a digitally-powered membership program is helping to deliver digital growth, and build a loyal base of customers that engage with the brand in ways that go beyond shopping for new apparel and sneakers.
For the quarter ended Nov. 30, Nike posted 34% digital growth on an annual basis, delivering a standout result for the quarter that indicates there is still ecommerce growth to be had during a tough time for retail. While this was helped by a Black Friday and Cyber Monday that set records for demand and traffic, there was more to it than a seasonal spike.
Perhaps fittingly for a brand with the famed slogan “Just Do It,” Nike is acting boldly as it steps into the digitally-enabled future. In recent years, its ecommerce strategy has been undergirded by a focus on going direct-to-consumer. As a result, it has scaled back relationships with other retailers in favor of bolstering its own channels, whether that be its digital properties or in-person stores. This marked a big shift for a brand that is used to appearing on shelves everywhere, but allows it to work across digital and physical channels, while centering the Nike brand.
“Our work to directly connect with consumers is founded on a simple consumer insight: Consumers want to get what they want, when they want it and how they want it,” CEO John Donahoe told analysts. “And consumers have told us they want a consistent, seamless and premium experience both digitally and physically around mono-brand and multi-brand.”
It’s clear that Nike is not only selling individual items to people through this approach, but also building an environment where people will keep returning. One way it does this is through its membership program, which Donahoe flagged as a particularly important driver of the brand’s digital growth for the quarter.
Nike now has 160 million active members, and the most recent quarter was its largest to date. Donahoe said Nike saw double-digit growth in engagement from these members for the quarter, as well. The purchases from these members mean more than just a one-time sale. While customer lifetime value wasn’t mentioned on the call, it’s clear the program helps drive up this important loyalty metric.
“More importantly, our repeat buying members who are more engaged, spend more and spend more frequently are growing at an even faster pace of high double digits as they continue to be an important growth engine for our business,” Donahoe said.
At a time of heavy discounting in retail, membership gives Nike a unique way to differentiate the way consumers interact with it. One result is that consumers are continuing to pay full price, even as they seek deals in general.
“The quality of the business through Nike Digital is among the highest quality that we have across any channel,” Donahoe said.
With ready access to purchases and preferences, membership also offers Nike a way to learn more about its customers, and it is using the data to inform product creation, line planning and experiences.
Nike doesn’t only offer shopping and discounts through the membership program. Perks include free shipping, exclusive styles, invites to events and access to workouts. In turn members can engage through a series of apps offered by Nike, including Nike Training Club, Nike Run Club and the SNKRS App. Nike is aiming to deliver more content across these apps, as well, and expects to announce more partnerships in the coming weeks.
Members can also realize benefits in-store. In fact, 50% of store demand comes from members, Donahoe said. The company is also building connection points for people who shop Nike products at other outlets, as well. Nike has connected membership with Dick’s Sporting Goods, JD Sports, Zalando and TopSports. In turn, Nike said the members are driving improved traffic, conversion and mutual profitability. And the other retailers can have the same access to data that helps them personalize their own experience, such as who a customer is and what they’ve bought.
Direct-to-consumer isn’t only about owning channels. It is about elevating the experience. Listen to executives closely, and it sounds like Nike’s membership program is the ladder that is helping it to reach the next level.
“While it's still early days on this journey, we're excited by the foundation we're creating,” Donahoe said. “The ability to give consumers a personalized experience across channels, fueled by data and insight opens up a whole host of opportunities for us. It positions us to empower consumers with their own choice while keeping the scalability and strengths in digital marketing, product creation, distribution and more.”
On the Move has hiring news from Walmart US, Etsy, commercetools and more.
Judy Werthauser. (Photo via LinkedIn)
This week, retailers are bringing on C-level talent in areas such as people, operations and transformation. Plus, Kohl’s appoints an activist investor’s choice for CEO, Fanatics taps a former Snap executive for livestream shopping and Etsy brings aboard Facebook’s former general counsel.
Tom Kingsbury was appointed CEO of Kohl’s. Kingsbury was named interim CEO in December upon the resignation of now-Levi’s President Michelle Gass. Now, Kingsbury will have the job on a permanent basis. Kingsbury served as CEO of Burlington Stores from 2008-2019. Kingsbury was nominated by activist investor Macellum Advisors, which was pushing for change at Kohl’s. With Kingsbury’s appointment as CEO, Macellum has agreed to a “multi-year standstill.”
Judy Werthauser was appointed chief people officer at Walmart U.S. Werthauser comes to the teen-focused retailer from Five Below, where she served as EVP and chief experience officer. Over her four-year tenure, the chain grew from about 750 stores to more than 1,300 locations. Werthauser also served on the board of BJ's Wholesale Club, and is now resigning from that position. “I am excited to work alongside the world-class Walmart U.S. team as they bring the purpose of building a better world – helping people live better and renewing the planet while building thriving, resilient communities – to life,” Werthauser wrote in a LinkedIn post.
Mike Brewer was named chief operating officer at Crate & Barrel Holdings, overseeing operations at Crate & Barrel, CB2, Crate & Kids and Hudson Grace. Brewer brings 20 years of experience from Nike, where he served in roles including sourcing, manufacturing and supply chain. Crate & Barrel said Brewer’s appointment was part of the home retailer’s “ongoing efforts to evaluate and alter its structure in ways that help support overall growth.”
Keith Melker. (Courtesy photo)
Keith Melker was appointed chief strategy and transformation officer at JCPenney. Melker comes to the department store retailer from Wehner Multifamily, where he served as CEO. He was also a previous chief strategy officer at the Kimberly-Clark Corporation. Melker will oversee the transformation office, which includes ownership of metrics such as profitable traffic, inventory management, digital growth and strategic partnerships. With this move, Katie Mullen will remain chief strategy officer.
Blaine Trainor is joining ecommerce software provider commercetools as VP of global partnerships and alliances. In the role, Trainor will lead the headless commerce company’s partnerships ecosystem, working with companies including Deloitte, CapGemini, AWS and Google Cloud. Trainor previously served in senior leadership roles at SAP over a 12-year tenure, and also held sales roles at hybris software and Sterling Commerce.
Nick Bell, a former Google and Snap executive, will lead a new livestream shopping division of Fanatics, Footwear News reported. Bell previously led the teams behind Google Search Experience, and served as VP and global head of content and partnerships at Snap Inc. Bell will lead the Fanatics Live division, which will launch a standalone app that is geared toward collectibles.
NIck Bell. (Photo via LinkedIn)
Colin Stretch was appointed chief legal officer at corporate secretary at Etsy, effective Feb. 14. Stretch previously served as general counsel at Facebook from 2013-2019. He then spent two years as leader in residence at Columbia University Law School's Reuben Mark Initiative for Organizational Character & Leadership, and went on to the law firm Latham & Watkins.
"Colin's extensive experience will be critical to Etsy's efforts to ensure we remain a safe and trusted marketplace, broaden our reach across all our brands, and advocate for microbusinesses around the world,” said CEO Josh Silvermann, in a statement.