D2C: What’s Really Behind Nike’s Strong Q1 Results

Ben Rund

By Ben Rund

On October 1, 2020

Nike CEO John Donahoe recently said, “Digital is the new normal. The consumer today is digitally grounded and simply will not revert back.” Nike’s direct sales grew by 83% in Q1-2020.

How? Nike is a marketing powerhouse and can be found in athletic big box stores just as readily as high end boutiques for its exclusives with designers. But it’s new line of growth isn’t store driven, it’s Direct-to-Consumer (D2C).

Nike is not considered a D2C brand. It’s not the first name you think of along the same lines as Warby Parker and Casper. But a look into Nike’s latest earnings report paints the real picture of the success. This picture clarifies why Nike is a role model in this shift to digital.

Nike isn’t just selling shoes now. It’s selling an experience.

For runners, we often don Nike gear – shoes, shorts, shirts. That’s the usual. Now we can also have Nike as a virtual coach on our Apple Watch or iPhone using the Nike Run Club (NRC) app. Nike provides not just the clothes, but helps us be better at the activity. Nike can use that same data across its network of stores (which Nike can direct you to if the app senses your proximity) to provide customized products via Nike ID, which helps link consumers’ info with Nike offerings.

It’s not just data that is behind Nike’s growth, but it’s their right use of data. Nike creates a relevant customer experience, connecting the dots between product, profile, location, and engagement data — understanding the complex and diverse make-ups of their consumer base. Nike leverages its master customer data and connects to customers in real-time or near-real-time.

Multi-Domain Data to Experiences.

Broadly speaking, modern Master Data Experience Platforms allow users to graphically view products and the relationships: child-variants, vendors, customers, locations, and geography. With a multi-domain platform, visualizing an enterprise 360 is made easy with Vendor, Supplier, Customer, Product, and Location, among other domains, all in one view.

And this is how Nike continues to succeed: Nike recognizes the importance of experience and continues to invest in building a more direct line of experiences, not just product, to their consumer base. Nike connects the dots of product, experience, and context.

As a result, they reach beyond their core athletic market and build direct, deeper, experiential bonds with a broader audience.

 

About The Author – Ben Rund

Ben Rund is Riversand’s General Manager in the DACH region and Vice President Business Development, Europe.

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