Doing it Right – Nike’s growing online sales

Stefany Zaroban’s article on internetretailer.com about Nike’s reported growth of 46% in online sales made me think about a case for a successful Digital Transformation. In my previous blog, I mentioned that Target didn’t stress on innovation in their Q3 2016 earnings call. Nike’s Chairman, President, and CEO Mark Parker had a refreshing view on how innovation drives growth during Nike’s Q2 2017 fiscal year call (1). Here are a few comments from him that I like. They set a tone about connecting with customer’s choices and leading the business through Digital Transformation.

  • “Starting with the consumer who’s not asking for more product…but looking for more choice of the products they love…”
  • “Beyond product, e-commerce is one example, as we double down on the power of digital in this mobile-first market.
  • We’re leading through digital. We made the move long ago to integrate brand, service, and commerce in a meaningful way for consumers. No one in our space is close to connecting all three and turning it into value for the business the way that we do.”

I analyzed Nike’s financials (the fiscal year 2010 through Q2′ 17) and composed the below table. My observations are:

  • Nike first started reporting an aggregated Sales Direct to Consumer and online sales only from 2013. Before the fiscal year 2013, I do not see clear mention of an aggregated Direct to Customer sales revenue number or a call out on online sales.
  • Since 2013, Sales Direct to Consumer has increased by 1.8x and online sales has grown by 3.3x through 2016 fiscal year. Just in 2017 fiscal year alone, Nike’s online sales has grown by 49% and 46% during Q1 and Q2 respectively.

If Nike maintains or exceeds their current growth rate, with a continued focus on building a digital ecosystem, they will quickly surpass their goal of reaching $7 billion in online sales by 2020.

Reference

  1. Q2 2017 – 2011 10k http://investors.nike.com/investors/news-events-and-reports/?toggle=earnings
  2. Nike kicks up 46% web sales growth this quarter
  3. How Nike will grow e-commerce to $7 billion from $1 billion in 5 years
  4. Nike names Adam Sussman first chief digital officer

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