Introduction
Nike is more than just a sportswear and athletic brand; it’s a global phenomenon that has consistently dominated the athletic apparel and footwear industry. The company is renowned for its ability to innovate, adapt, and remain at the forefront of the industry, which has translated into impressive financial success. This article explores the reasons behind Nike’s continuous innovation and its remarkable financial performance.
Some Public Facts About Nike
Nike, Inc.is an American multinational corporation that is engaged in the design, development, manufacturing, and worldwide marketing and sales of footwear, apparel, equipment, accessories, and services. The company is headquartered near Beaverton, Oregon, in the Portland metropolitan area.
It is the world’s largest supplier of athletic shoes and apparel and a major manufacturer of sports equipment, with revenue in excess of US$46 billion in its fiscal year 2022 (ending May 31, 2020).
As of 2021, NIKE total number of employees in 2021 was 73,300, a 2.79% decline from 2020. The company was founded on January 25, 1964, as “Blue Ribbon Sports”, by Bill Bowerman and Phil Knight, and officially became Nike, Inc. on May 30, 1971. The company takes its name from Nike, the Greek goddess of victory.
Nike markets its products under its own brand, as well as Nike Golf, Nike Pro, Nike+, Air Jordan, Nike Blazers, Air Force 1, Nike Dunk, Air Max, Foamposite, Nike Skateboarding, Nike CR7 and subsidiaries including Jordan Brand and Converse. Nike also owned Bauer Hockey from 1995 to 2008, and previously owned Cole Haan, Umbro, and Hurley International.
In addition to manufacturing sportswear and equipment, the company operates retail stores under the Nike town name. Nike sponsors many high-profile athletes and sports teams around the world, with the highly recognised trademarks of “Just Do It” and the Swoosh logo.
Nike Constantly Innovates with
- New Product Designs/IP
- Technology Adoption / Investment in High Tech to improve Customer Experience
- Supply Chain Optimisation / Holistic Experience from Raw Material Sourcing to End Product Delivery
Research & Innovation, Supply Chain Management, Technology Integration and Customer Experience go hand in hand for Nike, be it New Product Designs, Supply Chain Processes or be it Latest Technologies or Omnichannel Marketing Strategy. Gaining Trust of the Customer is always at the forefront of its Business Strategy.
1. Research and Innovation:
Nike is constantly adopting new innovations and creating IP. Based on Statista Report, Nike has a total of 25762 patents globally (Surpassing all its competitors put together) out of which 18340 have been granted and more than 79% of these worldwide patents are active with US being the main focused R&D Centre. As of mid-2022, Nike had filed over 10,000 patents in the United States, making it the country in which the company filed the highest number of patents by far. The U.S. was followed by China and Europe, which accounted for more than 2,600 patent filings each. This shows how much Nike Invests in its Product Designs, Research and Innovation
Its not about Nike just creating a Product, its more about How Nike Creates a Product and an Experience to connect the entire life cycle of that product. So be it Sustainable Materials, Overt Teaching, Adding AR/VR, QR Codes or Activations or making things customisable, Its all about putting a new idea in the market that generates trust with the customers.
Deborah Castle
Learn more Below:
2. Adoption of New Technologies for Holistic Customer Experience
Apart from filing patents and creating innovative products, Nike is also keen adopter of Latest technologies, AI, Data Science, Big Data & Analytics etc. It frequently collaborates with Tech Giants to transform and power its Digital Brand Experience . It uses AR and VR to improve its Product Design, and 3D Printing that creates Products of the highest Quality.
NIKE also Acquired Data Analytics Leader Zodiac (a leading consumer data analytics firm based in New York City and Philadelphia.) to strengthens the brand’s digital capabilities.
The acquisition of Zodiac demonstrates our commitment to further accelerating Nike’s digital transformation and enhancing our consumer data and analytics capabilities to help us serve consumers globally. We’re adding world-class data-science talent and best-in-class tools to power 1:1 relationships with consumers through digital and physical consumer experiences.
Adam Sussman, Vice President and Chief Digital Officer of NIKE, Inc.
Direct to Consumer (D2C) & 360 View Omnichannel Customer Experience Strategy
Nike was among the first ones (among its peers) to enter direct-to-consumer or D2C market few years back and partnered with many technology companies to achieve that objective. One of them was Apple. One of the First Examples of Collaboration was Nike+ Plus iPod Ad campaign that allowed Nike to stay ahead of that curve and revolutionised the way Customers interacted with Nike Brand. Today about 30% of all of Nike sales go through their direct-to-consumer channels.
Nike Created its Omnichannel Strategy by creating an immersive Retail Experience which combines Retail Store, Online, Ecommerce and Mobile Customer Journeys seamlessly to provide a flexible shopping experience to the Customer. Learn more about Nike 360 Degree Customer View Omnichannel Strategy Here:
Nike 360 Degree Customer View Omnichannel Strategy
3. Supply Chain Innovation and Use of Sustainable Reusable Recyclable Materials
Nike is constantly looking out for new technology Innovations to improve their Logistics, Manufacturing and Supply Chain Management Process. Are you aware that – No one uses more recycled polyester in the industry than Nike.
Based on this Nike Report, 75 percent of all Nike shoes and apparel now contain some recycled material. Beyond reusing, Nike also manufactures some of its most iconic products in a sustainable way. In fact, Air is one of Nike’s most sustainable innovations. Further Based on the Report:
Five Air Sustainability Facts
- A dye-coloring process for Air soles allows 99% of recoverable dye water to be recycled
- All Air sole innovations designed since 2008 are composed of at least 50% recycled manufacturing waste.
- Today, Nike Air Manufacturing Innovation facilities divert more than 95% of manufacturing waste from landfills — that’s 51 million pounds of materials (the equivalent of nearly 10 Olympic-size swimming pools) from May 2016 to 2017 alone.
- The new Nike Air Max 270 Air sole boasts one of the largest, tallest, and most visible cushioning systems to date and contains more than 70% recycled manufacturing waste.
- The VaporMax Air sole, which contains more than 75% recycled material, has allowed Nike to remove the need for a foam mid-sole.
Video – Why Nike Makes Money despite the Competition and manage to Stay ahead of its Competitors?
Conclusion – Nike Winning Strategy
Consumer-Centric Approach
Nike’s success begins with its unyielding commitment to its customers. The company conducts extensive market research to understand the evolving needs, preferences, and lifestyles of its consumers. This consumer-centric approach enables Nike to design products that cater to a wide range of athletic and lifestyle activities, ensuring that their offerings remain relevant and appealing to a broad audience.
Cutting-Edge Technology
Nike invests heavily in research and development, continuously pushing the boundaries of sportswear and footwear technology. The company collaborates with athletes, scientists, and engineers to develop cutting-edge innovations like Nike Air cushioning, Flyknit technology, and more. These innovations not only enhance athletic performance but also offer a level of comfort and style that appeals to consumers.
Marketing and Branding
Nike’s marketing and branding strategies are iconic. Their advertising campaigns are often centered around star athletes, such as Michael Jordan, LeBron James, and Cristiano Ronaldo, helping them connect with sports enthusiasts and style-conscious consumers alike. The famous “Just Do It” slogan has become synonymous with Nike’s brand, encouraging people to embrace their athletic aspirations and potential.
Sustainable Practices
In recent years, Nike has made significant efforts to incorporate sustainability into its business practices. By designing products with sustainable materials, reducing waste, and working to reduce its carbon footprint, the company has aligned itself with environmentally conscious consumers. This commitment to sustainability not only resonates with a growing segment of the market but also helps reduce operational costs and inefficiencies.
Product Diversification
Nike recognizes the importance of diversifying its product offerings. In addition to its core athletic wear and footwear lines, the company has expanded into various lifestyle segments. This diversification extends to collaborations with fashion designers and artists, such as Virgil Abloh and Travis Scott, which create limited-edition, highly sought-after products.
E-commerce and Digital Presence
The digital age has revolutionized the way businesses operate, and Nike has fully embraced this transformation. The company has made substantial investments in e-commerce, offering a seamless online shopping experience for its customers. With personalized recommendations, mobile apps, and direct-to-consumer sales, Nike has made it easy for customers to connect with their brand and make purchases online.
Global Expansion
Nike operates on a truly global scale. It has a presence in nearly every country, with a network of retail stores, franchise operations, and distribution centers. By entering emerging markets and tailoring products to local preferences, Nike has been able to tap into new revenue streams and expand its customer base.
Collaborations and Partnerships
Nike’s collaborations with other companies and organizations have contributed to its success. Partnering with sports leagues, like the NBA, as well as renowned fashion brands like Off-White, has allowed Nike to maintain a fresh and exciting image. These collaborations often lead to limited-edition releases and generate significant buzz within the industry.
Nike’s constant innovation and financial success are the result of a multifaceted approach that prioritizes customer needs, technology, sustainability, diversification, e-commerce, global expansion, and strategic partnerships. The company’s ability to stay at the forefront of the athletic apparel and footwear industry is a testament to its commitment to excellence and adaptability. Nike’s dominance is likely to continue as long as it remains dedicated to these principles and continues to push the boundaries of innovation.
