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Consumer-focused tech pushes Nike toward 2020

At Nike (NKE), digital and direct-to-consumer business go hand in hand. Heidi O’Neill, president of Nike Direct, talked to Yahoo Finance about the swoosh brand’s “consumer direct offense,” how the company is leveraging consumer data to better serve its members and the new plans the company has in store for 2020.

“Consumers want a relationship with Nike. They know and they trust if they provide us information that we can actually make their lives better,” she said. “We use data to help consumers have a better run, get a better fit, get a better product, get a better service. Our data is actively applied to making better experiences with consumers.”

And by all objective measures, the relationship that Nike is fostering with its members through its digital channels is paying off. In the first quarter of the current fiscal year, Nike’s digital sales grew 42%

Investing in technology is also a big part of the swoosh brand’s digital push. In May, the company announced Nike Fit — a new scanning technology that uses computer vision, data science, machine learning, artificial intelligence, and algorithms to help its consumers get the best fitting footwear. Nike says that at any given time, 60% of people are walking around in the wrong size shoe.

Nike Fit —NIKE

O’Neill said that the project didn’t start with the tech, it began with the consumer.

“Solving one of the industry’s biggest challenges, which is, you know, finding a perfect fit and being able to do that on mobile and in a store — and we’ve used 360° programming, we’ve used computer vision, we’ve used machine learning to get there, but we didn’t start with the tech. We started with consumer friction and solved a really big problem.”

O’Neill says that Nike Fit will be expanding from a service perspective to other product types in 2020 to “continue to solve the fit challenge for consumers.”

Nike has also fostered a relationship with Chinese e-commerce giant Alibaba (BABA). The company not only participated but scored big on the Chinese retailer’s annual shopping holiday called Singles Day.

“Nike at 7 a.m., on 11/11 beat last year … And I think a couple of things to think about this 11/11 that might separate it from past is we really saw an omnichannel play from Nike,” O'Neill said.

“It wasn’t just about one channel or one platform. It was about them all. ...It was about and our app, and it was about our stores. The Nike platforms crushed it and grew 70%.”

Up next? The spring of 2020 launch of Nike’s third house of innovation store, in Paris. The new store will join the ranks of the Nike innovation stores up and running in New York City and Shanghai.

Reggie Wade is a writer for Yahoo Finance. Follow him on Twitter at @ReggieWade.

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