Footwear Insight

16 • Footwear Insight ~ July/August 2019 footwearinsight.com THE FOOTWEAR EYE Nike Is All In On Digital T he Swoosh will rely on tech solutions to con- nect with shoppers and more in 2020. Coming out of a fiscal year where global brand revenues topped $37.2 billion and North American annual sales rose 7 percent to more than $15.9 billion, Nike senior management is clear about the company's increasing focus on digital, connecting with its consumers worldwide, keeping better track of its inventory via technology and raising the innovation bar in footwear and apparel. Despite the bullish strategy take, Nike shares dipped June 27 after the company missed the Street's EPS forecast by $0.04 a share. It represented the company's first earnings miss in seven years. Direct sales drove 50 percent of Nike's incremental revenue growth in FY19 ended May 31, with digital increasing 35 percent over the 12 months. Digital commerce, both owned and partnered with retail- ers, is forecast to be at least 30 percent of Nike's business by FY23. Encouraged by triple-digit revenue growth from its Nike app in North America last year, the company has begun introducing it glob- ally, including in China this fiscal year. The Nike app is currently live in more than 30 doors across the U.S., U.K. and France and will be scaled further in FY20 in an effort that will include select Nike factory stores. "The intersection of physical and digi- tal is going to continue to be a more and more intimate relationship," Mark Parker, Nike's chairman, president and CEO, said in a call with investors. "I think we're looking at a lot of experimentation [and] trial-and-error learning from some of the test we're doing. Ultimately, it's about making the experience physically or digitally richer." On the technology front, Nike is install- ing RFID across all non-licensed apparel in Fall '19 and RFID and QR codes on footwear to "dramatically improve" the company's inventory visibility with styles, colors and sizes across the retail market- place and throughout its supply chain. Parker says the effort is about getting consumers "the product they need when and where they want it." Among key product developments: • Joyride, a new cushioning platform designed to appeal to both performance- and lifestyle-focused consumers, will debut at the end of Q1 before Labor Day. • Nike Fit, a foot scanning technology via a smartphone camera or in-store device that should minimize returns over sizing issues, will debut in the U.S. and the EMEA later this year. • A refresh of footwear products under $100 retail, what Nike refers to as its "core zone," is coming. Approximately 75 percent of styles in the group will get a new look, including the utilization of existing Nike tech into some. • Converse, whose FY19 sales rose 1 percent to slightly more than $1.9 billion, is diversifying it product assortment, including a renewed focus on its authentic basketball business. — Bob McGee EARNINGS REPORT No Silica gel , clay, or biocides CAPTURES and ISOLATES MOISTURE in excess of 200-450% of its dry weight Prevention is better than cure Michael Hanrahan > > michael@superdryers.com (201) 679 4703 Steve Ryan > > steve@superdryers.com (312) 371 5438 Alex Chisholm > > alex@superdryamericas.com (904) 210 8602 MOLD? MOISTURE DAMAGE? AVAILABLE WORLDWIDE For orders in the Americas : w ww . s up e r d r y e r s . c o m The Nike Fit foot scanning technology will roll out later this year.

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