The sneaker industry has forever been standing on a few pillars. Air Jordans and their long rich history, Adidas’ Yeezys, and world-famous retailers. We owe it to these retailers for making sneakers more accessible from wherever you are in this world. The real world, not the virtual one where NFT sneakers exist. Did you know that NFT bots are already a thing now? One fact stays the same though: we will still need to get sneakers from somewhere in real life. And this somewhere will soon be Nike only because of the Nike Direct to Consumer business strategy! Let’s check what DTC means, and why we should all care.
The Evolution of Nike Sales
So the Nike Direct to Consumer strategy didn’t start just yesterday. It’s the product of years of change and market monitoring! Before 2017, most of Nike’s revenue relied on wholesale. That means they sell their products to retailers, who in turn sell their products in their physical stores. However, that was just about to change with retailers and brands moving their transactions online. Nike launched the SNKRS app, and they have their own website. Slowly, but surely, people started buying things directly from the Nike website and app.
Fast forward to 2017, and the swoosh announces their Nike Direct to Consumer strategy, aka D2C. The main goal is for Nike to become 40% digital by the 2025 fiscal year. And according to Nike CEO John Donahoe, the brand is well on its way to reaching that goal. In fact, Nike Digital makes up 21% of Nike’s total revenue. You can see in the graph below how fast the digital revenue is growing!
But What Is the Nike Direct to Consumer Strategy?
Well, as the name suggests, Nike D2C is all about direct relations with the customer. So simply cut out the wholesale to retailers and then have customers buy from there. Now, a sneakerhead can simply log into the Nike website or app, and buy whatever they want. And more people are becoming members of the SNKRS app and buying directly from there. Well, it’s not that easy when you’ve got a hype drop, but you got the idea.
Why Should You Care…
So when Nike cuts the middleman, they can control the sales and so on. But in return, they can give the consumer more creative freedom. The biggest example of that is the Nike By You line where you can customize your own kicks! Another incentive that makes the Nike Direct to Consumer strategy a success is perks, mainly through Nike SNKRS. Members can get exclusive access to hype drops before the official release. And sometimes they can get kicks that don’t even get a public release! Ahem… the 50 Off-White Dunks…
The Effect of Nike Direct to Consumer on Retailers
Well, after discussing the new strategy, Nike is definitely starting to apply it. And one of the biggest retailers that are feeling the heat is Footlocker. After announcing that they will be reducing their stock of Nike products, Footlocker stocks took a nosedive. A plunge of 35%, around $950M, ought to be a bit painful. The swoosh announced that no retailer will have more than 55% of the total stock by Q4 2022. And Footlocker’s Nike purchases won’t be more than 60%. That’s pretty low if we compare it to 2020’s whopping 75%! You can read more about this here.
Nike Direct to Consumer – What Do We Think?
Well, this strategy is a game-changer for giant brands and customers alike. However, when you’re getting your kicks from one place, that means it’ll get more competitive! So if you really wanna come through, you’ll need a good Nike bot. And the bot alone won’t give the best performance unless you hook it up with the best proxies and servers. Also, this guide will take you through the steps you need to take for the perfect setup! Godspeed 🔥