BEAVERTON, Ore., June 27, 2019 – NIKE, Inc. (NYSE:NKE) today reported financial results for its fiscal 2019 fourth quarter and full year ended May 31, 2019.
Source: NIKE, Inc. Reports Fiscal 2019 Fourth Quarter and Full Year Results
Nike is a 50 year old company. Typically old companies move sluggishly and don’t adjust and adapt to new trends very quickly. Actually that sentence is incorrect, in the sneaker world Nike is basically the middle child. adidas and Puma are older and Under Armour is younger. Whatever the age, Nike is an anomaly. They shift and move with the speed of a startup. Take for instance a digitally native brand like Greats. The company was born as a DTC company. They shifted into brick and mortar and the company straddles the line of timeless classics and modern sustainability like a startup. Greats is an agile startup which is to be expected because there aren’t the encumbrances of large boards and the burden of keeping the shareholders engaged.
Nike is 50 years old and they move just as agile as a startup. Actually they move faster. In startups there is a lot of wavering and indecisiveness. Nike implements a plan and they push forward with a momentum that gives analysts pause. When Nike began their DTC initiative (Consumer Direct Offense) prominent analysts stated that limiting wholesale would be a mistake. When Nike removed Futures as a measurement for business health, Wall Street panicked and Nike dropped to 47 dollars a share. Nike now sits at 85 dollars a share and the company just reported a 39 Billion dollar year.
Revenues for NIKE, Inc. rose 7 percent to $39.1 billion, up 11 percent on a currency-neutral basis.
This is not where or why startups should be excited. Nike’s pivot to the CDO has been a boon for the brand and it’s a model that a company like Coddi, founded by a PENSOLE design graduate,
This is What It Looks Like to Start a Shoe Company | Matthew Walters Founder CODDI™ www.coddi.co”
can look to as evidence of successful DTC strategies.
NIKE Direct revenues were $11.8 billion, up 16 percent on a currency-neutral basis, driven by a 35 percent increase in digital commerce sales, 6 percent growth in comparable store sales as well as the addition of new stores. Sales to wholesale customers increased 10%.
During the 2017 Investor’s Day Nike stated they would be cutting wholesale accounts down. This would have logically led to a decrease in wholesale. Wholesale hasn’t suffered although Direct has grown considerably. There is another story that can be written here in regard to Nike being in competition with wholesale accounts, but that’s a different post. There are 5 things a startup can learn from the agile adjustments of Nike:
- If a billion dollar company can adjust to the new digital economy, a startup should really be able to move quickly.
- An investment into internal marketing (not simply buying Google Ads or relying solely on social media campaigns) is a beneficial strategy.
- An outside consultant is outside. They can’t really tell you what’s best for your company unless you give them everything… and even then they are on the outside.
- Understand that your digital ecosystem (apps, website, cms) will allow you to get more out of your customer. The website isn’t a static thing.
- Don’t overthink things. If a channel is winning let it win. Don’t try to fix something that isn’t broken, but always plan for the shift.
Nike is unlike a startup in that they have a ridiculous amount of capital, but simplifying these 5 things will help any startup, even my own:
- Stop sitting around talking about launching your online store, use Squarespace, Shopify or Woocommerce via WP.
- You don’t have the money to run ads so write and do videos. Your phone is your tv station.
- You can’t afford a consultant, and if you’re by yourself advice is hard to come by, but LinkedIn is a great source to bounce around ideas with like-minded people. If you have a team, listen to them.
- Your website doesn’t have to be just product. Like Nike, you can tell the story of your service/product. Give people a reason to leave social to visit your site daily and maybe they will buy what you have.
- I’m a victim of this, I overthink things and start changing them when they are paying off because I think something will go wrong. Prepare for problems, but keep driving to the hoop if it’s working. Let the other team adjust. Once they adjust, have your plan ready to change gears.
