HOW IS NIKE TRYING TO UNDERSTAND THEIR CUSTOMERS?

This year hasn’t been easy for retail at all, doesn’t matter if you are a fast fashion, premium or luxury fashion business. The covid-19 pandemic shut the retail world down for months whilst we were stuck in the middle of a global pandemic. Now, Nike is opening a new store on the famous Champs-Élysées, one of the most expensive streets in the world, as the world is still recovering from the effects of coronavirus. For Nike, this has been labelled as one of their most critical projects.


The store is set to be another one of their innovation stores, Nike use these stores as a stage to give the world a small peak into what they do. This will also be the third ‘House of Innovation’ Nike is opening since they opened stores on New York and Shanghai back in 2019. In the last quarter, Nike’s sales have declined by over a third due to the pandemic, and with customers still remaining hesitant to return back to going shopping in stores, this could be a very expensive experiment. Mariola Borysiak is S&P Global’s primary analyst for Nike and has noted that it has been their worst performance that she has ever seen for a long time, her predication for the next quarter is that they are going to “continue to be weaker than the same quarter a year ago” and this has come down to consumers lack of confidence and still be cautious after seeing what covid-19 can do.

However, there is a chance that this might not be the case. There are experts who suggest that Nike making such a huge investment could have some of the answers to their problems in the current global climate. Currently their strategy is to start scaling back dependency on any current wholesale partnerships, and to gain back more control of their own distribution, as well as reducing discounting and gaining more market shares in areas like women’s business. However, this will take a while to do, since Nike has used this method for years. Figures show that Nike’s direct sales account for a third of their total sales, which was estimated to be around $12.4 billion, however Nike has never released any statements sharing their percentage of sales that are generated from fully priced goods.

Using the ‘House of Innovation’ stores along with Nike’s apps, customers are given an even more personalised experience that is tailored to them. Now they can choose how much contact they have with sales assistants, to help them in stores if they need it. These stores also help Nike get a better understanding of their customers and understand what resonates with them and what doesn’t.

The Paris store will feature a City Shop with souvenirs specific to Paris, as well as having a diverse range that can cater to anything, something as simple as mannequins in all sizes or even creating swimwear that is ‘pro hijab’ shows Nike’s understanding, which is simply why they are one of the most successful companies in the world.

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