{"id":19643,"date":"2016-11-18T17:28:54","date_gmt":"2016-11-18T22:28:54","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/just-do-it-the-swoosh-goes-digital\/"},"modified":"2016-11-18T17:28:54","modified_gmt":"2016-11-18T22:28:54","slug":"just-do-it-the-swoosh-goes-digital","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/just-do-it-the-swoosh-goes-digital\/","title":{"rendered":"Just Do It: The Swoosh Goes Digital"},"content":{"rendered":"

Are We Running Today?<\/em><\/p>\n

Looking down, you see the Nike+ Run Club app logo on the face of your Apple Watch, followed by a guilt-inducing reminder: 3 days, no runs . . . Are we running today? <\/em>Wearable fitness trackers and mobile fitness applications are nothing new. Yet this watch is different: the integration of the Nike+ Run Club app with the latest Apple Watch represents a unique partnership between Nike and Apple, two of the most iconic brands in the world. For NIKE, Inc. (\u201cNike,\u201d or \u201cthe Company\u201d), however, it represents something more \u2013 the Company\u2019s continued push into digital.<\/p>\n

Started in 1964 by Phil Knight and legendary track coach Bill Bowerman, Nike today is one of the world\u2019s most recognizable companies. Although sales through third-party vendors continue to comprise the majority of the Company\u2019s revenues, Nike has, in recent years, made a concerted effort to expand its direct-to-consumer (\u201cDTC\u201d) reach, and digital is an important piece of the Company\u2019s DTC growth goals. Indeed, for the last three fiscal years (2014-2016), Nike\u2019s DTC revenues have grown\u00a0nearly 20% each year, with\u00a0digital growing at\u00a0nearly a 50% clip. (By comparison, Nike as a whole experienced 5%-10% revenue growth over the same period.) Digital revenues now represent\u00a022% of Nike\u2019s DTC revenues and have grown by nearly $1 billion since 2014\u00a0[1]<\/a>. Figure A shows the three-year trend:<\/p>\n

\"Figure
Figure A\u00a0<\/strong>[2]<\/a><\/figcaption><\/figure>Nike\u2019s recent structural changes further convey its emphasis on digital. In February 2016, the Company created a new executive position (Chief Digital Officer) solely dedicated to the growth and development of digital\u00a0[3]<\/a>. In addition, the Company launched a digital studio in New York City in August 2016 to house a team of talented tech entrepreneurs \u201cfocused on pioneering engaging consumer experiences across the Nike Digital portfolio\u201d [4]<\/a>.<\/p>\n

Nike has also sought to integrate digital into<\/em> physical stores. For instance, the Nike+ Run Club app advertises group runs (led by Nike pacers and coaches) that begin and end at Nike stores. In addition, the new Nike Soho store in New York City is, what the Company calls, \u201ca seamless link between Nike\u2019s digital and physical platforms\u201d due to an array of immersive digital trials. Store visitors can, for instance, try out basketball shoes on a basketball court surrounded by images of iconic New York basketball courts and test running shoes on treadmills that offer\u00a0real-time, on-screen feedback\u00a0[5]<\/a>.<\/p>\n

The new Nike+ mobile app takes the Company\u2019s digital relationship with the consumer one step further. Darren Heitner of Forbes<\/em> describes the app as \u201cmuch more than another shoe and apparel company app designed to track performance,\u201d pointing out that \u201cthis stand-alone app provides the user with a feed of stories tailed based on inputs of interests, the ability to connect with an expert for training tips, and most importantly a store with highlighted products that makes it easy for a consumer to buy straight from Nike\u201d\u00a0[6]<\/a>. Indeed, after installing the app, a user is prompted to enter information about his\/her preferences \u2013 for instance, whether to follow categories like running, basketball, training, and\/or soccer \u2013 and provide a shoe size. From there, the user is fed product and training recommendations, and he\/she can make purchases directly from the app. If the user wishes, he\/she can even place orders for pickup at a Nike store.<\/p>\n

The Company\u2019s digital efforts have not all been rousing successes, however. Many may remember the since-discontinued Nike FuelBand fitness tracker. While not exactly a success story in and of itself, many in the wearable technology industry believe it was a product that catapulted wearable fitness technology to the mainstream. For instance, Chris Smith from Wearable<\/em>, a site dedicated to the wearable technology industry, argues that despite the product\u2019s limitations, \u201c[the wristband\u2019s] importance as a t\u00ad\u00ad\u00adransformative product can\u2019t be understated\u201d because it was \u201cthe first high-profile marriage of consumer tech and fitness [in what\u2019s] now a multi-billion-dollar industry\u201d\u00a0[7]<\/a>.<\/p>\n

As it moves forward, Nike needs to focus on differentiation and further digital innovation because, in many respects, competitors face a low\u00a0barrier to entry to do what Nike has done in the digital space. For example, New Balance recently partnered with fitness app Strava; when New Balance\u2019s MyNB app is linked to\u00a0Strava, the resulting app operates very similarly to the Nike+ app \u2013 just with New Balance products\u00a0[8]<\/a>. One potential way to drive innovation could be to focus on new digital product offerings that encompass a greater variety of sports and activities. Although products for multiple sports appear for purchase in the Nike+ app, the focus of Nike\u2019s other apps \u2013 notably, the Nike+ Run Club and Nike+ Training Club apps \u2013 is\u00a0predominantly on general fitness and running. Adding skill-based training regimens for sports like basketball and soccer to the Nike+ Training Club app could be a way to appeal to more consumers.<\/p>\n

 <\/p>\n

[Word Count: 796 without citations or figures]<\/p>\n

 <\/p>\n

Citations<\/strong>:<\/p>\n

[1]<\/a> NIKE, Inc., 2016 Annual Report, p. 76<\/p>\n

[2]<\/a> Ibid., p. 76<\/p>\n

[3]<\/a> NIKE, Inc., \u201cCompany News,\u201d http:\/\/news.nike.com\/news\/names-adam-sussman-as-chief-digital-officer<\/a>, accessed November 2016.<\/p>\n

[4]<\/a> NIKE, Inc., \u201cCompany News,\u201d http:\/\/news.nike.com\/news\/nike-digital-studio-2016<\/a>, accessed November 2016.<\/p>\n

[5]<\/a> NIKE, Inc., \u201cCompany News,\u201d http:\/\/news.nike.com\/news\/nike-soho-first-look<\/a>, accessed November 2016.<\/p>\n

[6]<\/a> Darren Heitner, \u201cJust Do Digital: Nike\u2019s Fundamental Shift to Direct-to-Consumer.\u201d Forbes<\/em>, August 2, 2016, http:\/\/www.forbes.com\/sites\/darrenheitner\/2016\/08\/02\/just-do-digital-nikes-fundamental-shift-to-direct-to-consumer\/#3a58edf3707a<\/a>, accessed November 2016.<\/p>\n

[7]<\/a> Chris Smith, \u201cNike FuelBand: The Rise and Fall of the Wearable that Started It All,\u201d February 22, 2016, http:\/\/www.wareable.com\/nike\/not-so-happy-birthday-nike-fuelband-2351<\/a>, accessed November 2016.<\/p>\n

[8]<\/a> New Balance, \u201cMy NB Loyalty Program,\u201d http:\/\/www.newbalance.com\/id\/loyalty-info.html<\/a>, accessed November 2016.<\/p>\n

 <\/p>\n

Cover photo credit<\/strong>:<\/p>\n

NIKE, Inc., \u201cProduct News,\u201d http:\/\/news.nike.com\/news\/nike-plus<\/a>, accessed November 2016.<\/p>\n","protected":false},"excerpt":{"rendered":"

An iconic sports brand doubles down on digital.<\/p>\n","protected":false},"author":2679,"featured_media":19644,"comment_status":"open","ping_status":"closed","template":"","categories":[788,209,37,158,2121],"class_list":["post-19643","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-digital","category-fitness","category-innovation","category-nike","category-wearable-technology"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/digitization-challenge-2016\/","yoast_head":"\nJust Do It: The Swoosh Goes Digital - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/just-do-it-the-swoosh-goes-digital\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Just Do It: The Swoosh Goes Digital - 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