How is Nike excelling at driving loyalty with digital?

Source: Nike
Dec 21, 2020

Nike on Friday reported its third straight quarter of online growth of approximately 80 percent. But the bigger long-term benefit is expected to come from enhanced digital engagement that has added more than 70 million new members globally since the pandemic arrived.

“What we know is more engaged consumers buy more,” said John Donahoe, CEO, on an investor call. The former eBay CEO took over at the start of this year to further fuel the company’s digital transformation.

Nike generated over 7 billion brand impressions across social platforms globally in the latest quarter, growing awareness for NIKE Running Club, NIKE Training Club and SNKRS, its app for limited-edition online drops. Earlier this year, Running Club and Training Club, which provides workouts, became free to use after formerly using a subscription model.

Nike also improved its reach via executions such as “Never Too Far Down,” which was YouTube’s top ad during 2020. The overall touchpoints led to over 400 million social engagements in the quarter. Nike, Mr. Donahoe said, is “creating dialogue and opportunities for action” to support further engagement.

“We’re deeply focused on the member funnel outcomes, including new member buying, reactivation and retention and it’s working,” he added. “Importantly, buying member growth is outpacing new and active member growth and growth in member demand is outpacing total digital growth.”

The quarter marked the launch of SNKRS Live, Nike’s first-ever product drop via livestreaming that sold out in under two minutes.

Nike also hosted its first Member Days, which offered members globally first access to rewards for activity and personalized exclusives across stores and digital. The event reached over 60 million members across 25 countries, supporting higher conversion for the quarter.

“It’s no one thing,” said Mr. Donahoe about Nike’s digital outreach. “And I learned this from my days in the digital world. It’s a lot of little things that make a difference to be a great digital company. And we’re a clear leader here. We’re extending our market share lead digitally and we’re going to continue doubling down.”

DISCUSSION QUESTIONS: How important is membership engagement to Nike’s recent success? What can other retailers and brands learn from Nike’s digital approach?

Please practice The RetailWire Golden Rule when submitting your comments.
"Once you reach 'lifestyle partner' status, you have reached marketing nirvana."
"The lesson: behind simple “engagement” is a fully thought out digital ecosystem to acquire, understand, and motivate members..."
"Nike has taken their messaging straight to the consumer and eliminated the middle man retailer."

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15 Comments on "How is Nike excelling at driving loyalty with digital?"

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Suresh Chaganti

Nike’s In-app engagement is very good. I noticed more frequent drops and discounts. Clearly they are increasing the investments in promotions and loyalty. Nike’s brand strength and the mass advertising it does with celebrity athletes gets used in the personalized promotions and 1:1 engagement. Great strategy and execution.

Michael La Kier

Membership engagement is critical to Nike and all other brands. The lesson: behind simple “engagement” is a fully thought out digital ecosystem to acquire, understand, and motivate members built out over a number of years. While Nike’s CEO said “it’s not one thing,” he’s wrong; a maniacal focus on the customer is that one thing all retailers (and brands) can focus on for growth.

Shelley E. Kohan

Nike’s digital business allows the brand to continue to connect with its members and increase sales despite store closings and restricted occupancy. Nike has added over 70 million members to its loyalty program this year. Over 60 million customers across 25 countries participated in Member’s Day, a new event providing unique retail moments, first access to products, exclusive products and added rewards. Other brands can take a page from Nike’s DTC strategy. Three years ago, Nike reduced the number of wholesale distributors to focus on the direct-to-consumer market. The brand went from over 30,000 distributors down to focus on 40 of them. This pivot allowed Nike to maintain control of the brand and keep close ties with its customers, a strategy called “Consumer Direct Offense.”

Chuck Ehredt

Nike has been engaging their customers around passion and values for decades. These new digital channels are simply (great) examples of what brands can accomplish when they personalize around topics that are important to customers.

Of course Nike invests heavily in the talent, apps, and campaigns – but this allows them to create a community of advocates that end up not being very price-sensitive. All marketers should follow Nike closely and piggy-back on the elements of marketing that could work in their own businesses.

Evan Snively
Evan Snively
Director of Planning & Loyalty, Moosylvania
1 year 7 months ago

Agreed Chuck – Nothing new to the core strategy from Nike’s perspective, just different vehicles for achieving it.

Dave Bruno

Once again, we see how effective engagement can drive revenue and loyalty. These marketing investments (including making Training Club and Running Club free) helped make Nike fitness partners for millions of shoppers. Once you reach “lifestyle partner” status, you have reached marketing nirvana. The trick, of course, is maintaining that status, but Nike seems to have figured out how to do that as well. Huge (if not necessarily new) lessons to be learned about making marketing investments that build real connections.

Brandon Rael

Once again, this proves how successful Nike has been in taking complete ownership of their branding, messaging, and personalization strategies with their loyal consumers. Pre-COVID-19, Nike was making significant strides with their physical experiential stores, such as the House of Innovation, etc. However in a COVID-19 quarantined world, digital has proven to be the most effective engagement platform to drive revenue growth, drive outstanding experiences, and enhance customer loyalty.

Nike’s provocative and mission-driven messaging continues to drive interest in the brand that has been relevant for decades. Digital engagement is completely dependent on execution, and Nike has essentially been flawless in this space. In an industry where traditional marketing strategies simply are not effective, Nike has taken their messaging straight to the consumer and eliminated the middle man retailer.

Lisa Goller

Membership engagement makes Nike magnetic, as consumers crave connection this year. Belonging to Nike’s global health and fitness community gives consumers physical and mental health benefits, including hope.

Lessons for other brands include:

  • Diversity matters: Celebrating both elite athletes and exercise novices makes the brand exciting and inclusive;
  • Habits pay off: Membership rewards build a consumer habit of interacting with a company, which can boost brand trust. Omnichannel shoppers are more loyal and likely to recommend a retailer, as Harvard Business Review reported in 2017; and
  • Stand out online: Embracing digital innovation like livestreaming helps brands differentiate their offerings and reach younger consumers.
Ricardo Belmar

“It’s no one thing,” is the key to Nike’s success. From their mobile app engagement, to livestreaming and YouTube videos, Nike knows where its customers are and what they want. By delivering on those fronts Nike has made itself part of its customers’ lives and that’s the stickiest any brand can get! For Nike’s digital members, this ecosystem of engagement is providing tangible value to their lives and that increases their love of the brand and with it, their purchasing power. Nike’s direct-to-consumer sales have been up by 32 percent at their last reported quarter, so the plan is certainly working. Investing in digital engagement has paid off for Nike but the main lesson for other retailers is the comment I started with – it’s no one thing, it’s the combination of all of these touchpoints and engagement channels that cements the loyal relationship with the customer.

Shep Hyken

To engage with a brand — beyond a sale — can create an emotional connection. This is what drives repeat business and potential loyalty. Nike seems to be very good at getting their customers excited about what’s new at Nike. And they are masters at marketing the right merchandise to the right customers. This creates a level of personalization that draws the customer even closer to them.

Lee Peterson

Nike is the master of DTC at this moment. Top shelf, IMO. Great digital workout apps, use of marketplace (Walmart), social media and yes, physical stores (all with BOPIS) as well as a fantastic web site. They also made some critical moves this past year in terms of eliminating “fringe” vendors to narrow access, which is something huge brands (Under Armour) have had a hard time doing over the years. A+ all the way around and a role model/road map for all other brands going forward.

Steve Dennis

Nike excels at just about every aspect of what I call the 8 Essentials of Remarkable Retail (full disclosure, Nike is a past client). They’ve fully embraced being digitally enabled and leveraging the power of mobile. The Consumer Direct Offense has further pushed what has historically has made them memorable. Most importantly, by encouraging brand enrollment (literally and figuratively) and narrowing their distribution, they are creating a far more personalized experience. Having been with them at the outset of this remarkable journey, it’s amazing to see what they are bringing to life in a relatively short amount of time. Other retailers would be wise to study what they’ve done.

David Adelman

Loyalty, personalization, and great online support are just a few of a great membership program’s founding principles. Since Nike’s pullback from third-party sellers, they have gained super control over their digital branding platform. More great brands must follow their lead if they don’t want to see their brand’s dilution.

Kim DeCarlis
A handful of years ago, I read an article in a business magazine that basically said “face it Nike, you’re a software company now.” At that time, there was an app that connected to chips in specific shoes to track mileage and remind a person to stay motivated to reach their fitness goals, and shortly thereafter the ability for a consumer to customize their shoes on the brand’s website. This was the beginning of leveraging technology and of digital engagement with customers that the brand has learned from and continues to build upon today. They — and other brands across segments ranging from automotive to beauty products — have realized the engagement with and personalization for the consumer is critical to success. This is particularly true for highly undifferentiated products where substitutes are easily available, often at a better price point. Other retailers and brands should take note of Nike’s success and how they handle engagement across digital and in-person channels. As a top consumer brand, they have set the expectation for others to follow.… Read more »
Casey Craig

Nike took digital services that were previously fringe products fueled by subscription models and made them free at a time when a much wider audience was looking for exactly that kind of solution. Rather than promote a paid service to this new audience, they took a gamble that bringing new “customers” in the door through a free product that still met the Nike quality/brand standards would breed long-term, profitable customer relationships, and it paid off.

Retailers could learn from their focus and willingness to adapt their product and service for their customers, not just for quick profit-centered solutions, but ultimately to fuel success in uncertain times.

"Once you reach 'lifestyle partner' status, you have reached marketing nirvana."
"The lesson: behind simple “engagement” is a fully thought out digital ecosystem to acquire, understand, and motivate members..."
"Nike has taken their messaging straight to the consumer and eliminated the middle man retailer."

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