Nike’s Secret Innovator: The Customer
If there is one thing I learned from reading about business, it’s that novelty doesn’t come from a mission statement. It comes from understanding your customer.
From the start, Nike obsessed over making the best shoes for its athletes. Jeff Johnson, the first full-time employee at Nike would keep files of his customers and send them congratulatory cards when they won races. The customers led innovation, otherwise, the shoes became useless and obsolete. A successful business features its products in stores, not in museums.
Nike was profitable because they made shoes that were wildly different. Phil Knight, the founder of Nike, started the company by selling Japanese running shoes to Americans. Runners have never seen shoes like these before, and they went crazy for them. But what made athletes even more hopeful, was Nike’s adoption of their suggestions. Knight’s partner, Bill Bowerman, spent hours taking apart shoes and tinkering with different shapes and materials. He even poured concrete into a waffle press to create the Waffle Sole.
Nike’s products are still rooted in their consumers’ needs even if Jeff Johnson can’t send them handwritten notes. Nike’s approach of “data-driven shopping” uses analytics from customers to guide future decisions in product development, marketing, and design. The Nike app with 250 million users provides insight into what trends people are excited about. When Nike saw people doing yoga workouts on their app, they designed new yoga gear. Furthermore, Nike’s Express Lane updates models with new materials and colors that customers find stylish. You can go to Nike iD, customize your own shoes and have them delivered in under three weeks.
Amazon’s Prime delivery benefits push Nike to speed up its distribution. Nike decreased the product creation process by half using 3D modeling software and partnering with automation companies. Its partnership with Flex takes the standard time for manufacturing, which is around 60 days, to ten days or less.
Nike’s COO, Eric Sprunk says in a few years, “Our consumer can place an order and have it delivered the same day in key cities around the world. Your favorite team wins a championship. And in a few days, we have designed, manufactured, and delivered a brand-distinctive, innovative product to your doorstep. Not just for certain products, not just in certain colours. For all of our products.”
Nike will gain a significant advantage by blending the online and offline shopping worlds. In the next few years, retailers will face new challenges, like the rising costs of digital ads, shipping, and returns. But the company is adapting, and it shows in its numbers. In early March last year, Nike hit a target that was originally set for 2023, selling 30% of its goods online. During lockdown and quarantine, when shops were closing, 70 million people became Nike members. Nike found new avenues for growth that allowed it to increase its brand value by two million dollars from 2019.
Nike’s astronomical growth surprises me. They never settle and always out-innovate and out-work their competitors. They fly to such a high altitude that their competitors get a nosebleed catching up. Nike asks, “What is the next thing?” and sprints after it.
Originally published at https://www.enlightenedcloud.com.
