Nike's mobile apps have helped to fuel sales growth during the pandemic as part of the sportswear giant's effort to boost direct-to-consumer (DTC) sales. Those apps urge people to participate in a range of activities with a gamification strategy designed to maintain loyalty, reinforce brand messaging and drive sales.
With many folks spending more at home and avoiding stores because of health concerns, brands with significant retail footprints like Nike have been forced to switch up their sales strategy. Consumers are still shopping for clothing — especially athleticwear and other comfortable styles for work-from-home settings — but are doing so through mobile websites, social media marketplaces and apps at a higher clip.
On the strength of its websites and mobile apps, the company's digital revenue jumped 84% in the quarter ended Nov. 30, according to its earnings report last month. While Nike didn't provide exact figures, it reported a 9% gain in total revenue to $11.2 billion. Digital sales will make up about half of total revenue in the near future, the company forecasts.
"Digital is the 'new normal' in consumer behavior, and we believe the trends that we're seeing are here to stay," John Donahoe, president and CEO of Nike, said in a December earnings call. "Consumers want to get what they want, when they want it, how they want it."
The company's portfolio of apps underscores that philosophy of accessibility for customers, helping Nike to gather data on fans' purchasing habits, personal information and exercise routines that can inform future marketing initiatives.
Its Nike app, which is ranked No. 12 by downloads in Apple's App Store shopping category, provides a mix of content and personalized commerce. Users can gain early access to product drops and chat with Nike specialists for style advice. The company's Nike SNKRS app is more specialized in providing a hub for "sneakerheads" and ardent brand enthusiasts. The app gives users a way to participate in drawings for limited-edition sneaker drops and share in a community of Nike fans, among other interactive features to support engagement.
Those digital-based experiences complement or even temporarily replace the in-store experience that had been a key part of Nike's brand evolution before the health crisis. With fewer people visiting stores, pursuing compelling in-store efforts have become secondary to online sales channels such as Nike's website and apps.
"All of that brand equity out there for all these traditional big retailers has become devalued quite a bit just because there's not as much foot traffic," said Will Crocker Hay, vice president of customer and partner marketing at Braze, a provider of customer engagement software. "People aren't walking through stores and browsing and perusing anymore."
Tying workout apps to engagement
Separate from its dedicated shopping apps, Nike's exercise apps also feature mini shopping sections to reach people when they're thinking about workouts and necessary gear. The Nike Run Club app has guided runs with a pre-recorded coach to encourage and advise, along with practical tools like a GPS tracker to measure distance. A Nike Training Club app has hundreds of video workouts and tips on nutrition and wellness, illustrating how content can reinforce the idea that Nike is a dependable source of inspiration in setting fitness goals and achieving them.
"There's a lot of 'stress-shopping' going on during COVID, and that's leading to lower retention rates. If companies don't have a ... well-thought-out strategy for how to keep those people, it's going to make the value of every ad dollar they spend less."
Will Crocker Hay
Vice president of customer and partner marketing, Braze
Its suite of apps represents a key source of gathering first-party data about consumers, bringing them into the top of the purchase funnel and urging them to check in regularly with gamified experiences. Nike Run Club lets people share their achievements with a community of like-minded people and receive encouragement, while Nike Training Club offers digital badges and other rewards for following workout routine or regularly logging in.
"The backbone is membership…having a direct connection with consumers, and we are growing our membership," Donahoe said on the earnings call. "How do we engage them? Engage them through engaging whether it's Nike Running Club, Nike Training Club, SNKRS app. Live streaming is the way to engage consumers, and what we know is: more engaged consumers buy more."
Braze's Hay agrees that engagement is a priority, though it has become more difficult as consumers spend more time "window-shopping" on their smartphones.
"Companies have an 82% lower retention rate than before the pandemic," he said. "There's a lot of 'stress-shopping' going on during COVID, and that's leading to lower retention rates. If companies don't have an integrated and well-thought-out strategy for how to keep those people, it's going to make the value of every ad dollar they spend less."
The mobile pivot
As the pandemic led to lockdowns on nonessential businesses like clothing retailers last year, Nike was forced to switch gears quickly to emphasize its digital sales channels. With mobile apps becoming a necessary touch point between businesses and consumers, Nike took steps to boost repeat engagement.
It dropped the subscription fee for its Nike Training Club Premium service last March, giving people immediate access to a suite of services including the Nike Run Club and Nike Training Club apps, social channels, website and "Trained" podcast. With more people stuck indoors, the company revamped its marketing and debuted a new slogan, "Play inside, play for the world," along with corresponding hashtags on social media.
Since then, Nike has continued to make its app a central part of its brand experience by provide exclusive product offers and interactive content. The company has maintained support for diversity and inclusion efforts, building on campaigns featuring Colin Kaepernick, the former quarterback who has become an activist for social justice.
Nike in November celebrated Black women in a dance film, created with agency AKQA, that debuted on its Nike Training Club app. Viewers of "The Awakening in Dance: An experience in motion" in the app were granted access to exclusive content, including an instructional on the choreography to follow the moves at home. The film was another sign of Nike's commitment to its apps as key gateways to its digital shopping platform.