Nike’s online business is booming — ‘digital is here to stay,’ CEO says
Nike is proving during the pandemic that its big bets in digital are paying off, as consumers are turning to its website and app in record numbers to shop for sneakers and workout apparel.
For the past few years, the company has been pulling away from department stores and other wholesale outlets, instead investing in opening its own smaller neighborhood stores, called “Nike Live,” to serve as pickup hubs for online orders, alongside multilevel flagship locations dubbed “House of Innovation.” It also is testing a new concept that debuted earlier this year in Guangzhou, China, called “Nike Rise,” where visitors can use their Nike app once inside the space to sign up for local soccer matches and running clubs.
Even as most of its stores were reopened, Nike’s digital sales soared 82% during the fiscal first quarter, pushing revenue ahead of analysts’ estimates.
“Nike’s decision to evolve into a digital-first organization has proved prudent, as the crisis continues to push consumers toward the digital channel,” Susquehanna analyst Sam Poser said. “Digital momentum is sticky. ... [And] Nike has embraced the structural shift of consumer shopping habits from traditional brick-and-mortar to digital and will, in our view, continue to capitalize on this shift.”
Nike shares were up about 9% Wednesday morning, hitting an all-time intraday high of $130.38.
Before the Covid-19 crisis, Nike had set a goal of having its e-commerce sales represent 30% of total revenue by 2023. But it has already exceeded that. It didn’t break out the exact percentage, but said online sales were more than 30% of total sales during the latest quarter.
Now, it’s on track to break 50% in coming years.