Nike experimenting with ‘local’ theme
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Nike experimenting with ‘local’ theme

Nike is trying on a new idea to see if it fits: going local. The company, despite being one of the world’s most popular brands, is hoping to respond to mounting competition from Adidas and others by focusing more on customers’ local experiences in a dozen cities. Nike is taking inspiration from fast-fashion companies like Inditex here, hoping to get products on shelves faster, and react to changes in customer preference as-and-when they occur.

The company’s CEO, Mark Parker, made a statement last Thursday outlining Nike’s new strategy. He said that “the future of sport will be decided by the company that obsesses the needs of the evolving consumer,” and added that Nike is “getting even more aggressive in the digital marketplace, targeting key markets and delivering product faster than ever.”

Over the next two and a half years, Nike expects 80% of its growth to come from just 12 cities, including New York, Paris, Beijing, and Milan. Consequently, these are the cities in which the company aims to deliver “local business, on a global scale.” This could encourage more product diversity, as Nike caters to a disparity of local tastes around the world. It is also being ambitious in its pursuit of fast fashion, hoping to cut its product–creation cycle time in half.

Investors didn’t seem overawed by Nike’s statement, perhaps concerned – as was Erin Lash, a Morningstar analyst – about the possible costs the new direction could entail. Nonetheless, it is hard to argue with Nike’s priorities: the company is explicit that customers want products quickly, easily, and with a personal service. “These are all things that are driving some of these shifts in the marketplace,” Parker told analysts in March.

Disclosure

Dominion holds Nike in its Global Trends Luxury Fund.


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