Nike’s new shoe subscription service for kids is emblematic of its broader goal of personalizing consumers’ interactions with the brand to help grow its direct-to-consumer sales—online and offline—and increase its margins. In rolling out a subscription program, Nike aims to gather data about its customers, build a recurring revenue stream and, hopefully, develop long-term customer loyalty. However, the retailer must ensure the Nike Adventure Club runs smoothly—from the initial click of the Add to Cart button to the consumer returning ill-fitting shoes. And that requires it to operate the program in ways that are distinct from its other ecommerce efforts.

Because the program involves shoes, which have a return rate that often ranges from 25% to 50%, the subscription program’s success ultimately comes down to the retailer’s logistics and reverse logistics, says Jim Okamura, partner at retail consultancy McMillanDoolittle. “The returns solution could make or break the consumer’s—or parent’s—desire to continue with the subscription,” he says.

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