Nike has good reason to revive its retail partnerships
In a move to improve sales, Nike is expanding its partnerships with Foot Locker, Macy’s, DSW, and other retailers.
Looking at more than 250,000 pieces of feedback from “The Crowd” of apparel and footwear shoppers, including 15,000 pieces from just Nike customers, we’ve found these partnerships could be a smart way for Nike to address their customer’s unhappiness about the availability and selection of its products.
Sentiment 1,2 of Nike customers towards the availability and selection of its products are down 6% and 9%, respectively, over the past year. This far outpaces the 2% and 5% decline for other sportswear companies. Selection is the only area besides price where Nike significantly lags its peers.
The drop in shopper sentiment towards Nike’s selection and availability speaks to an accessibility issue resulting from supply chain challenges in 2021-2022 and decisions to shift away from certain retail distribution partners. Customer sentiment towards availability has bounced by 3% in the last three months as Nike works through its elevated inventories by pushing more product into the market (much of it discounted), while sentiment towards selection is down 2% over the same period.
By comparison, customers like the availability of PUMA’s products more than that of its competitors. PUMA reported it grew its wholesale business in Q1 2023 , with a focus on being “the best partner to retailers.” More insights into PUMA can be seen in our recent report on sportswear .
Looking at more than 250,000 pieces of feedback from “The Crowd” of apparel and footwear shoppers, including 15,000 pieces from just Nike customers, we’ve found these partnerships could be a smart way for Nike to address their customer’s unhappiness about the availability and selection of its products.
Sentiment 1,2 of Nike customers towards the availability and selection of its products are down 6% and 9%, respectively, over the past year. This far outpaces the 2% and 5% decline for other sportswear companies. Selection is the only area besides price where Nike significantly lags its peers.
The drop in shopper sentiment towards Nike’s selection and availability speaks to an accessibility issue resulting from supply chain challenges in 2021-2022 and decisions to shift away from certain retail distribution partners. Customer sentiment towards availability has bounced by 3% in the last three months as Nike works through its elevated inventories by pushing more product into the market (much of it discounted), while sentiment towards selection is down 2% over the same period.
By comparison, customers like the availability of PUMA’s products more than that of its competitors. PUMA reported it grew its wholesale business in Q1 2023 , with a focus on being “the best partner to retailers.” More insights into PUMA can be seen in our recent report on sportswear .
Customers want Nike products back in third-party retailers
During the height of the COVID-19 pandemic, Nike and other apparel retailers doubled down on their direct-to-consumer (DTC) business, figuring that since retailers like Macy’s and DSW were closed during lockdowns, they would need to shift their sales online. After announcing in 2020 that it would revamp its Consumer Direct Acceleration strategy, Nike turned away from its long-time retail partners and instead pushed to sell more products on its own websites and its DTC stores. The strategy has apparently worked – Nike DTC made up 44% of revenue as of May 2023, up from 16% in 2011.
Now, though, Nike is trying to mend its retail partnerships as it plans to bring products back to partner stores this fall. Dick’s Sporting Goods president, director, and CEO Lauren R. Hobart reaffirmed Dick’s commitment to Nike in its May earnings call, and earlier this year, Foot Locker CEO Mary Dillon said her company is again working closely with Nike.
Many customers have recently shared their desires to see more Nike product in other stores with HundredX. In June, one woman shared, “normally buy Nike at Dicks. They have a very limited selection vs what is shown online. Please improve.”
Another Nike customer added that while she thinks Dick’s does have a good selection of Nike products, “I wish Nike was in DSW shoe stores…that seems to have gone away.”
We’ll closely monitor the data to see how Nike’s partnership expansion pays off.
Now, though, Nike is trying to mend its retail partnerships as it plans to bring products back to partner stores this fall. Dick’s Sporting Goods president, director, and CEO Lauren R. Hobart reaffirmed Dick’s commitment to Nike in its May earnings call, and earlier this year, Foot Locker CEO Mary Dillon said her company is again working closely with Nike.
Many customers have recently shared their desires to see more Nike product in other stores with HundredX. In June, one woman shared, “normally buy Nike at Dicks. They have a very limited selection vs what is shown online. Please improve.”
Another Nike customer added that while she thinks Dick’s does have a good selection of Nike products, “I wish Nike was in DSW shoe stores…that seems to have gone away.”
We’ll closely monitor the data to see how Nike’s partnership expansion pays off.
- All metrics presented, including Net Purchase Intent (Purchase Intent), and Net Positive Percent / Sentiment are presented on a trailing three-month basis unless otherwise noted.
- HundredX measures sentiment towards a driver of customer satisfaction as Net Positive Percent (NPP), which is the percentage of customers who view a factor as a positive (reason they liked the products, people, or experiences) minus the percentage who see the same factor as a negative.
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The streaming industry has made progress but still has further to go navigating one of its biggest hurdles in years – production delays for movies and shows resulting from Hollywood writers and actors going on strike. To make up for the hole, platforms have turned to alternatives such as more international content, unscripted / reality shows and live events streaming on multiple channels simultaneously. At the same time, industry heavy hitters like Disney+, Hulu, and Netflix tweaked their prices, which annoyed customers already grappling with inflation. Viewers seemingly haven’t been satisfied with the content substitutions and plan changes, as the strikes and price adjustments seem to have contributed to a 1% dip in Usage Intent ¹,² across the streaming industry that began in May through August. It appears ending the strikes and getting new content back on the platforms needs to be a top strategic priority, particularly for Disney and Netflix, who have seen the biggest recent drops in Usage Intent. The Writers Guild (WGA) ended its strike September 27, while the Screen Actor’s Guild (SAG-AFTRA) is expected to meet with studios to find a resolution soon. The industry hopes it can next reach agreements with the actors who are still on strike soon. Analyzing more than 100,000 pieces of customer feedback across 23 video streaming services, we find:
Apparel and athleticwear retailers have seen material slowdowns in their businesses amid rising inflation and the looming resumption of student loan repayments, raising the level of debate about the health of Nike’s business heading into its Q1 2024 earnings report. Insights from “The Crowd” of real shoppers indicates Nike’s business should have seen some downward pressure in recent months but appears more resilient than most others. Despite the economic headwinds, we find Nike's direct-to-consumer (DTC) channel has bucked the trend with a modest 2% uptick in Purchase Intent ¹ , ² year-over-year in August for the Nike Store, unlike retail partners DSW and Foot Locker who are witnessing dips in both Purchase Intent and reported US sales. However, HundredX did see Purchase Intent for people under 40 dip 1% in August vs. July 2023, the first decline in over a year. This indicates demand growth is starting to crack among Gen Z and millennials, important customer groups for the sportswear company. While young adults still love the swoosh, the impending crunch on disposable income might pose a problem for Nike in the coming months. Analyzing more than 260,000 pieces of feedback across apparel, fashion, and footwear stores over the last year, including more than 20,000 on just Nike, we find:
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