Nike Focuses on Digital and Social Strategies to Hit $36 Billion Target
Nike, the world’s most valuable sports brand, has set a $36 billion target to hit by 2017 as they focus on digital and social strategies to boost sales
Nike, The World’s Most Valuable Sports Brand
With a brand value of $17.5 billion, netting over $25 billion per year, Nike, Inc. is the world’s most valuable sports brand.
Over the past ten years their revenues have doubled, and the past three years alone have seen the brand grow almost 40%. Their significant growth is much in thanks to high-performing apparel, women’s, and e-commerce businesses. But it has also been aided by their dominating position in the football, basketball, and running markets, and of course, by their position as global leader in footwear. Nike currently claims almost 20% of the athletics footwear market, and their stock price has outperformed the Dow Jones US Footwear Index by 50% for the past five years.
A $36 Billion Target
In line with this growth, in October of last year Nike announced they had set a $36 billion revenue target to hit by the year ending May 2017, aprojection that substantially beats the Wall Street consensus estimate of $33.2 billion by 2017.Aiming to deliver revenues of $30 billion by fiscal year 2015, the Oregon-based company will need to see an annual growth rate of 9.2%.
A Digital Strategy
Digital and social strategies will be central to achieving their ambitious goal.
In social media, Nike is already a dominant, utilising a strategy that has created significant brand buzz. A report by the Social Bakers reveals that whilst Nike was not even an official London 2012 Olympic sponsor, they were the best performing sports brand of the Games. And as the FIFA World Cup launches, Nike are already ahead of the game and have taken a commanding social media lead against official sponsor Adidas. Their Winner Stays World Cup advert has so far attracted 76 million views and over 1.3 million shares.
Building a Community
And with the ultimate aim to persuade customers to buy more trainers, football shirts and running kit – in the 250-300 new own-brand stores they plan to open worldwide over the next five years – Nike is also working on other ways to boost their connectivity with customers and build the Nike community.
They recently announced they are to cease the development of FuelBand in order to concentrate on their Nike+ apps and activity-tracking software. Whilst the FuelBand – a rubber bracelet with a digital display that captures fitness data and uploads it to Apple devices – positioned Nike as an innovator, the wearable-tech market is now crowded: Samsung have launched Gear Fit, and Apple’s iWatch is expected this year. Building standout hardware that competes with the product giants takes extreme dedication and a more singular focus.
But a shift to fitness software offers Nike the opportunity to create the ultimate go-to in fitness tracking, but an app that instead links in with the hardware others produce. Nike aim to triple their Nike+ membership of 28 million to 100 million people, as they build a platform for the Nike community that they can just grow and grow.