Nike is turning the shakeup in the retail world as an opportunity for direct selling to consumers and will focus its efforts on solely 40 retail partners.
Over the last 12 to 24 months, the acceleration of retail consolidation has decelerated the overall market, according to Nike CEO Mark Parker’s interview Wednesday. This change drove Nike to shift its strategy to begin selling more directly to consumers.
The footwear giant started selling some of its products via Amazon in a pilot program announced in June. The results have been encouraging and both companies gained insights by this move.
Parker disclosed the company’s efforts to differentiate and elevate the brand experience, along with its partners, in the future while not entirely disregarding its traditional retail partners.
A “massive transformation” that includes selling directly to customers is currently under works with Nike, moving forward with its supply chain and product development process, Parker stated.
“The whole speed to market, the connection to consumers, and the direct connections we have to consumers powered by digital and membership is enormous,” Parker said in an interview.
In addition to that, Parker explained that Nike has set a goal of $50 billion revenue target within the next five years and has released an outline of its plans to achieve high single-digit revenue growth. Along with these plans, the company is also trying to achieve mid-teens earnings per share growth target.
“Triple Double Strategy”
Nike’s current retail network covers 30,000 retailers with 110,000 points of distribution. Nike products won’t be removed from the other retailers, according to company officials. However, over the next few years, its focus with its resources, marketing efforts, and exclusive product offerings will be specifically targeted on 40 key partners.
During a presentation at Nike’s annual Investor Day event, Parker stated their vision for new growth opportunities despite others’ perspective about the disruption to old models.
“Whether that’s redefining our approach to the retail landscape or accelerating our international momentum, we’ve mobilized our priorities and we’re driving growth in new ways,” he added.
Nike has built its future around a plan which it calls its “Triple Double Strategy,” wherein the focus lies largely on boosting the level of product creation, manufacturing and delivery in a variety of areas of the business, from product to mobile customer experience.
The strategy carries Nike’s renewed focus on direct-to-consumer retail. This explains its plans to sell directly to its customers either in the world of e-commerce or its own brick-and-mortar stores.
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