By Khadeeja Safdar
When shoppers enter the Nike Inc. flagship store in New York
City and log into the app, the company knows who they are, what
sizes they wear, what sports they play and what colors they
prefer.
The sneaker giant is now a data giant. Like many brands, Nike
has been using its apps to collect information about its customers
in recent years as it pushes to expand its digital sales, and
reduce its reliance on other stores.
All of the information collected helps Nike customize what each
customer sees on their apps. More broadly, it helps Nike decide
which designs to produce and what items to stock in which
stores.
The sportswear brand is also using its apps to change the entire
shopping experience. Shoppers can use their smartphones to scan
clothes they like on mannequins in its flagship store, sending
orders to store workers to place the items in a dressing room in
the correct size. App users will soon be able to give the company
their shoe size just by scanning their feet.
Nike uses a variety of apps to increase customer engagement and
sales. In addition to the main Nike shopping app, these include a
SNKRS app, just for selling sneakers, and Nike Training Club, which
offers guided workouts.
Heidi O'Neill, a 20-year Nike veteran, is the executive whose
job it is to pull it all together. As president of Nike Direct, she
is charged with leading the company's direct retail and e-commerce
business around the world. Ms. O'Neill spoke with The Wall Street
Journal about the company's efforts. Edited excerpts follow.
WSJ: How does Nike decide which products it sells directly to
consumers and which should be sold through other retailers?
MS. O'NEILL: What's important from a Nike shopping experience is
that with machine learning and AI, we're able to have every digital
experience at Nike be unique and personal. My wish for you one day
is to feel that you have your very own personal store curated for
you on our app experiences.
That said, our retailers have really important and deep
relationships with consumers as well. Many of our retailers have
specialties, such as retailers that focus on women or that focus on
the gear-up moment for team sports.
We look to each retailer, their relationship with their
consumers, and make sure we curate that way.
WSJ: Nike products can be purchased on the Amazon app or the
Nordstrom app. Why would shoppers download a Nike app?
MS. O'NEILL: We look at our app ecosystem as really providing
content, community, activity and connection for our consumers, even
beyond the transaction. We're seeing results in North America. In
the third quarter, our apps represented over 60% of our digital
business.
WSJ: Could you give me an example of some of the content?
MS. O'NEILL: One of our latest innovations is our audio-guided
run [available in an app called Nike Run Club, which tracks running
statistics]. In the third quarter alone, our Nike app hosted over
40 million runs. Our Nike Training Club app hosted over nine
million workouts. We see our SNKRS app as not just a shopping
experience, but kind of the hub of sneaker culture.
WSJ: One of the advantages of having a direct business is the
ability to gather data about the consumer. Nike says it uses online
data to inform its stores. How?
MS. O'NEILL: We use our data to know where our members are
concentrated. It helps us pick our Nike-branded retail locations in
places that can serve not just as stores, but serve as hubs for our
members and service centers.
We also use data to select and curate the product in the stores.
We'll know if a neighborhood or a market is really popular for
running, training or let's say sneaker culture. Then, of course, we
use data to understand what's selling.
WSJ: Is such data useful for designing products? If so, could
you give me an example?
MS. O'NEILL: We're seeing that, when we take the data, we know
what consumers are responding to, we can connect that to more
products and new products through our Express Lane [a new
supply-chain process to make products more quickly based on
consumer demand]. In the third quarter in North America, our top 10
styles were colors and expressions of products that were built
using data through the Express Lane.
WSJ: Last year, Nike purchased Zodiac, an analytics startup. How
is this firm being used at Nike?
MS. O'NEILL: The Zodiac team is bringing to us a really clear
definition and data science behind lifetime value. They've helped
us identify our highest-value members and consumers and make sure
that we understand them, their behaviors, and have the ability to
serve them. Given their loyalty to the Nike brand, we're able to
show our love back.
WSJ: After you've identified the high-value customers, how do
you show your love back?
MS. O'NEILL: With products that we're offering exclusively, or
even just early, to them. Also exclusive access to events and
services. We'll bring some of our best designers, like Tinker
Hatfield, to our House of Innovation in New York. He'll talk about
his latest launch or innovation with a community of high-value
sneakerheads.
WSJ: Nike is launching an app tool that will determine a
person's shoe size after they scan their feet with a phone camera.
What will Nike do this with info?
MS. O'NEILL: It will help take out one of the biggest friction
points. You see consumers ordering multiple sizes. The No. 1
conversion driver on a digital experience is if you have my size
and style. Now that we have the right fit information, that's going
to help us with our depth of buys. We'll know whether we have the
correct product and size.
Ms. Safdar is a Wall Street Journal reporter in New York. Email
khadeeja.safdar@wsj.com.
(END) Dow Jones Newswires
May 13, 2019 22:19 ET (02:19 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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