Nike Inc. started clearing up its stats sheet last week and for the first time, the Cheap Nike Shoes From China Free Shipping declined to report “future orders,” a vital way of measuring wholesale demand from the galaxy of retailers who sell the famous kicks. Nike, No. 9 within the B2B E-Commerce 300, says the metric doesn’t matter much anymore, because now it’s focused on conducting business directly with consumers and cutting out the middleman.
Nike sells to retailers through a combination of EDI and e-commerce. While Nike reported its slowest quarterly sales growth since 2010, its performance being a retailer-rather than a wholesaler-had been a relative highlight. Sales on Nike’s own online store were up 19% inside the recent quarter, while its retail locations notched a 5% grow in same-store sales. 28% of all the sales are direct this year, compared with 4% 5 years ago. CEO Mark Parker said the business is obsessed right now with making shopping more personal. “Retailers who don’t embrace distinction will likely be left behind,” he warned on the conference call Tuesday.
Still, that wasn’t enough to thrill investors-at least, not yet. The overlooked beauty of bricks-and-mortar retail is the way well retail chains lend themselves as to what economists call price segmentation. Shoemakers such as Nike can simply target customers by sending the correct shoes to the correct type of store (think: first-class vs. coach, iPhone X vs. iPhone 8, Banana Republic vs. Old Navy). In Nike’s case, it ships expensive, limited edition sneakers to high-end boutiques, routes its stock Jordans to chains like Foot Locker Retail Inc., and dumps its low-end product and off-key colorways in these places as DSW Inc.
If done correctly, this socioeconomic slotting moves just as much merchandise as you can with minimal fuss, without tarnishing the larger brand. And make no mistake: Nike will it correctly. On its face, the Swoosh is actually a design shop supercharged by the sort of storytelling its TV commercials, billboards and magazine ads are famous for. But Nike’s real genius isn’t marketing, it’s merchandising: knowing what to ship where. For every sneaker sketching savant in Beaverton, Ore., there’s a mid-level manager having a giant spreadsheet, ensuring “Momofuku” Dunks aren’t too easy to find, ordering up a special design for China, distributing its best-sellers to any or all the correct D.ick’s Sporting Goods Inc. outlets and dumping plenty of Chuck Taylors at outlet malls.
Nike has become upsetting their own well-oiled applecart. In giving traditional retail the stiff arm, which Nike made official in June, the Oregon empire is tearing up that playbook and trying to make a stop run around the fundamental economics of price segmentation. The strategy-a bold move, given the historical manufacturer-to-retail model being discarded-requires no shortage of swagger. But Cheap Nike Shoes Free Shipping numbers show that the bet seems to be working, primarily because Nike has been sharpening its digital game.
Sought-after sneakers now ship out via Nike’s own ecosystem of apps, including SNKRS, which it launched early this past year. The center of its lineup, meanwhile, sells on Nike.com and in its very own big box stores. With regards to cheaper, less-popular kicks, they quietly trickle into the company’s “factory” stores (read: outlet) and onto Amazon.com. Nike even includes a studio in New York City that makes customized shoes on-site within an hour.
In short, the company is deemphasizing its ready-made network of retailers to generate a much more precise targeting mechanism. Tuesday Parker said the conclusion goal is to get ahead of the consumer and present “the most personal, digitally connected experiences” in the industry. “While changing your approach is never easy, Nike has proven before that whenever we all do, it’s always kpelqt the following phase of growth for your company,” he explained.
Theoretically, Nike can know virtually any customer better-and his or her willingness to pay for-by using its own venues and platforms, particularly on its digital properties. The process will be building the mechanism to sort all of the data, and by doing this, the shoppers. In the real world, they sort themselves: The high-end boutique isn’t right near the cut-rate discount outlet. In the virtual world, it’s not too easy.
For the record, Under Armour Inc. is slightly ahead of Nike Inc., with 31% of its sales coming straight from consumers; Cheap Jordans From China is slightly behind, with 23% of revenue from retail. At its current pace, Nike will be collecting one in three of the sales dollars straight from consumers. Its challenge is going to be being sure that none get too good a deal.