Marketing
Lessons from Nike’s Consumer Direct Acceleration program
Valuable insight on how Nike is driving its direct-to-consumer business and how other retailers can learn from the approach.
March 16, 2023 by Susan Jeffers — CEO, XY Retail
There's been a sea change in brands' approach to distribution in recent years, with many moving away from department stores and finding more ways to sell to customers directly, whether through digital channels or physical presence.
Emblematic of this is Nike, which has been making significant investments in its direct-to-consumer business, culminating in the creation of the Consumer Direct Acceleration (CDA) program.
This strategic move has helped the sportswear giant to enhance its digital capabilities and streamline its operations, all with the aim of providing a more seamless and personalized experience for consumers. Now other brands, particularly those in luxury retail, are taking a look at why Nike has been so focused on and what they can learn from its approach.
One key to understanding the success of this approach is understanding the importance of brand experience, particularly in today's fast-paced, hyper-connected world.
As consumers have become more digitally savvy and demanding, their expectations for a brand's online and offline experiences have risen — they expect to be able to interact with brands seamlessly across multiple touchpoints, whether it's through a website, apps, social media, or a physical store. Modern consumers want a consistent, personalized experience that reflects their individual tastes and preferences, and they expect this experience to be effortless and intuitive.
CDA helps brands deliver on this experience by giving brands the data and control they need every step of the way. Nike, by investing in its direct-to-consumer business, has been able to create a more streamlined and integrated customer experience which includes a robust digital infrastructure that allows it to collect and analyze data on consumer behavior and preferences, enabling it to create more personalized experiences for each individual customer. It has also expanded its own physical footprint, reducing dependency on third party retailers like Foot Locker, with a greater emphasis on experiential retail and community-based activations. All of these efforts have contributed to a more seamless brand experience that better meets the needs and expectations of today's consumers.
Nike may have brought CDA to the forefront, but this focus on brand experience and moving to a more direct-to-consumer approach is not unique to Nike. As we talk to brands about what they want to do with our platform, we have learned that this approach has become increasingly important for brands across all sectors, particularly in luxury retail.
Luxury consumers are among the most discerning and demanding, with high expectations for the quality and exclusivity of the products they buy, and even higher expectations for a seamless and personalized brand experience that reflects the exclusivity of the products they purchase. They want to be treated as individuals, with shopping experiences that are tailored to their preferences and interests.
This is where the importance of seamlessly fusing digital and physical shopping experiences to enhance both comes in. While luxury retail has traditionally been associated with the high quality of its in-store experiences, digital channels have become increasingly important in recent years. According to a survey by McKinsey, online sales of luxury goods are expected to double by 2025, driven by the increasing importance of e-commerce and social media.
But for luxury brands, creating a seamless digital experience is not always easy. The exclusivity and personalized, high-touch experiences associated with these brands can be difficult to replicate online, and it can be challenging to provide personalized experiences at scale.
But there are several key lessons that luxury brands can learn from Nike's approach to CDA:
- Luxury brands should invest in their digital infrastructure to enable a more seamless and personalized brand experience. This means building robust data analytics capabilities that can collect and analyze data on consumer behavior and preferences, as well as investing in technologies like artificial intelligence and machine learning that can help automate and personalize every step of their products' journey to the customer, from production to delivery, whether that's in store, to their front door or a hybrid experience like buying online and picking up in store (BOPIS) or buying online and shipping to store (BOSS).
- Focus on experiential retail and community-based activations. This means creating physical spaces that are more than just stores, but rather destinations that provide an immersive and engaging brand experience. It also means creating opportunities for customers to connect with each other, whether through events or online communities, in order to create a sense of belonging and exclusivity.
- Create a consistent and cohesive brand experience across all touchpoints, whether online or offline. Ensure that brand identity and messaging is consistent across all channels, and that the customer experience is seamless and intuitive. It also means investing in technologies like omnichannel commerce and customer relationship management that enable a unified view of the customer across all channels, with robust clienteling capabilities that empower in-store sales associates to have a 360-degree view of the customer's preferences as well as all available products in all of the brand's stores and warehouses.
For luxury brands, taking a closer look at Nike's focus on Consumer Direct Acceleration and the creation of a seamless brand experience provides valuable lessons in where to focus their efforts to meet the needs of the increasingly discerning and demanding luxury consumer.
An investment in digital capabilities, experiential retail, and a consistent and personalized brand experience creates opportunities to deliver highly personalized service with clienteling, optimize your supply chain from production to the point of sale and much more. This empowers luxury brands can build stronger and more loyal relationships with their customers, which is essential for long-term success in today's competitive marketplace.
About Susan Jeffers
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