Introduction
Digital technologies are disrupting fashion industries with new models. Technologies such as advanced data analytics, social media and artificial intelligence are redefining the industry. Nike, Inc. is an multinational company which is the world’s largest supplier of athletic shoes and apparel and a major manufacturer of sports equipment. The company is focusing on product innovation, customer experience and digital transformation. In this blog, I will analyze how Nike has achieved success through the digital business model.
Distribution Channel
Nike is using digital channels to drive sales. Nike distribute its products worldwide through various channels such as retailers , e-commerce sites and social media. According to ,online app sales have doubled in two years. According to Nike, Inc. (2019), by the third financial quarter of 2019, its total revenue increased by 7% to $ 9.6 billion, while the digital growth rate increased by 36%, making it Nike Digital’s first billion-dollar quarter. In addition, Nike has greatly increased its sales by cooperating with e-commerce giant such as amazon.
Online-offline connection
The company transforms digitally with online and offline order history integration. Nike has integrated its mobile app into its retail store to make them more connected, which could drive customer loyalty and sales. It provides customers a unified experience by bringing these two types of channels closer together. This means that the brand really put the customer at the center of the fashion buying experience in a new way and connect with the consumer at a deeper level. The link between its app and store strategy is key to Nike’s success in building a digital and direct-to-consumer business (Milnes, 2019).
Customer Experience
Nike is not only selling products through online platforms, but it is also offering great customer experiences. The company use digital technologies such as social media, big data analytics and artificial intelligence to understand consumer needs and better position products. Nike mainly uses chatbots and artificial intelligence (AI) for a better customer service experience. It has a campaign about the collaboration between Nike Air Jordan and Facebook Messenger bot. In this campaign, the company collaborate with conversational AI platform Snaps. Messenger bots enable the two-way conversations and give people a unique opportunity to connect with Nike’s Air Jordan. Besides, artificial intelligence can understand the fashion preferences of consumers, predict fashion trends, and ultimately influence the product decision-making process. In the past, the fashion industry relied on experience and intuition to determine a season’s trends. However, in this digital era, the brand would use big data and AI to collect more customer information and use it to design its product styles. Through artificial intelligence technology, the brand can better design products that meet the needs of consumers. With big data, fashion brands can collect customer responses to samples and ideas and then adjust their products accordingly. This means that consumers are more engaged because they actually influence the design process. The big data can also be used to build up detailed customer segments, which can be used to more accurately position products and develop relevant marketing strategies.
Digital Marketing Strategy
Nike’s digital marketing strategy is very effective. Nike’s digital marketing strategy is supported by effective advertising. And emotional campaigns are playing a important role in Nike’s digital marketing strategy. By creating inspirational stories in advertising, the company makes consumers feel emotional about the product. Thus, the company is not only selling products, but they are also selling emotions.
Nike also conduct digital marketing through social media such as facebook and instagram. The brand has a large following on social media, with more than 33.71 million followers on Facebook and more than 100 million on instagram. However, Nike updates more frequently on instagram than on facebook. According to Cloe (2018), reasons may be the growing popularity of the photo/video sharing platform and Instagram as a professional photo-sharing platform, which is better suited to the high-quality images and video content sports brands offer their fans. The photos posted by the brand on instagram all highlight the athletes, with copies featuring simple but inspirational slogans. The brand is actually selling the aspiration.
Advertising on the channels used by customers is also the multinational’s digital strategy. Nike’s latest ads on video have had more airtime on YouTube than on television networks as the company found that their target audience used platforms such as YouTube more than television (Digital Agency Point, 2019). In this way, they could effectively reach their target customers and increase their product sales.
Reference
Cole, S (2018). How Nike uses Facebook and Instagram. Retrieved from https://econsultancy.com/how-nike-uses-facebook-instagram/
Digital Agency Point. (2019). The Secret Behind Nike Digital Marketing Strategies. Retrieved from https://digitalagencypoint.com/digital-marketing/the-secret-behind-nike-digital-marketing-strategies/
Nike. (2019). NIKE, INC. REPORTS FISCAL 2019 THIRD QUARTER RESULTS . Retrieved from https://s1.q4cdn.com/806093406/files/doc_financials/2019/Q3/FY19-Q3-Combined-NIKE-Press-Release-Schedules-FINAL.pdf
Milnes, H (2019). In effort to grow direct sales, Nike integrated its app strategy into its stores. Retrieved from https://digiday.com/retail/nike-integrated-app-strategy-stores/
Lulan's blog 
Hi Lulan,
Thank you for sharing your thoughts. Totally agree your point claiming that Nike used digital channels to manipulate sales. Since the number of social media users have climbed up nowadays, more companies has created online purchasing platforms for their customers. Like you have mentioned, Nike has built connections on social media platforms accompanied with Facebook. It involved chat bots to make direct contact with its customers.
I like the way you describe the digital marketing strategy of Nike, it clearly shows Nike’s effectiveness and responses of emotional campaigns, and it makes customers acknowledged of Nike’s products with the emotion at the same time. Can’t wait to read your next post.
Best,
Xuyan
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