Executives at Nike Inc. put their e-commerce stake in the ground earlier this month—touting to investors their plans to grow web sales 600% by fiscal 2020 to $7 billion from $1 billion today. While the web currently represents only 2% of its total sales of $30.6 billion, Nike projects that portion to grow to around 14% in the next five years.
Nike projects it will grow total sales to $50 billion by 2020, meaning e-commerce will account for nearly one-third of the company’s overall growth. Nike will accomplish that digital feat with a three-pronged strategy, Christiana Shi, president of direct-to-consumer, tells Internet Retailer.
First, it will roll out mobile shopping options for smartphone and tablet shoppers in the U.S. and abroad. Second, Nike is working to expand its online presence to more international markets; and third, it’s implementing a set of omnichannel features that more closely link its stores to Nike.com so shoppers can see and purchase all available Nike products no matter if they are shopping online or in stores.
Making web inventory available to store customers became a priority for Nike after the retailer performed a set of exit interviews at stores a couple years ago, and asked shoppers who walked out without a purchase why they didn’t buy anything. “The No. 1 reason they walked was that they couldn’t find what they were looking for,” Shi says. “That told us we need to move quickly in rolling this out to all of our stores.”
Nike is making a major push to give more store associates mobile devices to complete transactions and help shoppers find out-of-stock items on Nike.com. Store associates also can log shoppers into their Nike Plus loyalty accounts to help them earn rewards, and all online orders placed in store ship to the consumer’s doorstep or his local store for free. Members of Nike Plus who complete an online transaction in stores also get free returns, which helps reduce barriers to closing a sale, Shi says. “We are telling them, ‘Hey, buy three sizes. Buy three colors. Ship us back what you don’t want.’ We know that if they get what they want, and they’re happy, they come back.”
Shi would not disclose details on the results of the in-store initiative, but she does say it has been successful in recouping revenue that would have been otherwise lost if a consumer couldn’t find the size or color of product she wanted. “What we’re discovering is this huge untapped demand,” Shi says. “Nike.com sales in stores are completely incremental.”
She also says Nike is working quickly to outfit more stores globally with mobile devices and train staffers in how to use them. The capability is now in all U.S. stores, and Nike is pushing it to international stores. Since this summer, a handful of London stores received the technology, and all stores in the city will be up and running with mobile devices and access to online inventory in time for the holidays.
As another sign of how important the mobile point-of-sale initiative is for Nike, the retailer is changing the layout of many stores, Shi says. Associates can complete transactions near the fitting rooms, by the footwear walls or anywhere in the store, so Nike is taking away registers at counters and using the real estate for more merchandise.
Nike is also making a big push to reach online shoppers abroad where it also operates stores. As of now, the footwear maker operates country-specific e-commerce sites in the U.S., Australia, China, Japan, Korea, Brazil and about a dozen European countries. This week, Nike is rolling out shopping sites in Canada, Switzerland and Norway.
“Our math says there’s going to be 4 billion people with a smartphone and disposable income in the area where there is a Nike store in our demographic in 2020,” Shi says.
Part of what has allowed Nike to expand its online and omnichannel initiatives so quickly, Shi says, is its new global e-commerce platform. Since 2012, Nike has run its mobile, domestic and international shopping sites on one platform, which uses pieces of IBM Inc. and Oracle Inc. e-commerce platform technology. This has allowed Nike to be nimble and make wholesale upgrades just once, as opposed to several times across all web and mobile properties.
Nike is ranked No. 61 in the Internet Retailer 2015 Top 500 Guide. The company is also No. 12 in the newly release 2016 B2B E-Commerce 300, which ranks the largest manufacturers, wholesalers, distributors and retailers by their annual online sales to businesses.Favorite