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NIKE Deploys China Playbook to Tackle Coronavirus Crisis
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The coronavirus pandemic has been affecting the stability of retailers, particularly apparel and shoes. However, some companies have shown resilience amid the outbreak, one such stock being NIKE Inc. (NKE - Free Report) . In the adverse scenario, it has been pulling the right levers to stay afloat using its strong digital foundation as a key playbook to emerge stronger from the COVID-19 crisis, when physical stores around the world are closed.
When COVID-19 hit China, NIKE was compelled to close more than 5,000 stores across Greater China, and those, which were in operation, served reduced hours. This dealt a great blow to the retail channel, reflecting a strong decline in retail volume. Meanwhile, the company’s digital stores remained operational.
To wither the situation, NIKE acted promptly to efficiently leverage its diverse sourcing base and digital capabilities to manage the business with flexibility, and shifted inventory to serve consumers’ digital demand. It used the digital app ecosystem and NIKE expert trainer network to inspire and support consumers across China to stay active and connected while remaining at home.
This resulted in an extraordinary rise in signups for NIKE Training Club (“NTC”) Workouts in China. Consequently, weekly active users for all of NIKE activity apps rose 80% by the end of the fiscal third quarter from the beginning of the quarter. The increased engagement of China consumers with activity apps, also translated into strong engagement with NIKE’s commercial app, leading to more than 30% growth in digital sales in Greater China.
In addition to Greater China, the company has applied the playbook in Japan and South Korea, which has resulted in early momentum in the markets. This provides the company with the right strategy to combat the effects of the COVID-19 outbreak in other markets, particularly in Europe and the United States.
NIKE has now launched a strong digital marketing campaign to engage consumers across Europe and the United States to stay healthy and connected amid the lockdown. On Mar 24, the company made the NTC Premium free for everyone in the United States for 90 days. NTC Premium offers the best on-demand workouts and expert tips from trainers and others as well as inspiration and support for healthy living. Further, the company’s digital sites and product deliveries are up and running to serve customers.
NIKE is leaving no stone unturned to keep its business going in the tough times. The company has efficiently leveraged its digital presence to build demand avenues in the situation with increased memberships. This effectively illustrates its mantra of delivering a seamless, physical and digital retail. Additionally, the company is poised to take the growth graph ahead with its unparalleled product innovation strategy.
Although the overall market reaction has certainly impacted the company’s near-term performance, it still shows a lot of potential to bounce back on its stringent strategies despite extended store closures. Notably, NIKE reported robust results in third-quarter fiscal 2020, despite the coronavirus-related impacts on its China business due to store closures. Shares of the Zacks Rank #3 (Hold) company have lost 16.6% year to date compared with the industry’s 17% decline.
Chico's FAS, Inc. , a Zacks Rank #2 (Buy) stock, has an expected long-term earnings growth rate of 15%.
Costco Wholesale Corporation (COST - Free Report) has an impressive long-term earnings growth rate of 8.4% and a Zacks Rank #2.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
NIKE Deploys China Playbook to Tackle Coronavirus Crisis
The coronavirus pandemic has been affecting the stability of retailers, particularly apparel and shoes. However, some companies have shown resilience amid the outbreak, one such stock being NIKE Inc. (NKE - Free Report) . In the adverse scenario, it has been pulling the right levers to stay afloat using its strong digital foundation as a key playbook to emerge stronger from the COVID-19 crisis, when physical stores around the world are closed.
When COVID-19 hit China, NIKE was compelled to close more than 5,000 stores across Greater China, and those, which were in operation, served reduced hours. This dealt a great blow to the retail channel, reflecting a strong decline in retail volume. Meanwhile, the company’s digital stores remained operational.
To wither the situation, NIKE acted promptly to efficiently leverage its diverse sourcing base and digital capabilities to manage the business with flexibility, and shifted inventory to serve consumers’ digital demand. It used the digital app ecosystem and NIKE expert trainer network to inspire and support consumers across China to stay active and connected while remaining at home.
This resulted in an extraordinary rise in signups for NIKE Training Club (“NTC”) Workouts in China. Consequently, weekly active users for all of NIKE activity apps rose 80% by the end of the fiscal third quarter from the beginning of the quarter. The increased engagement of China consumers with activity apps, also translated into strong engagement with NIKE’s commercial app, leading to more than 30% growth in digital sales in Greater China.
In addition to Greater China, the company has applied the playbook in Japan and South Korea, which has resulted in early momentum in the markets. This provides the company with the right strategy to combat the effects of the COVID-19 outbreak in other markets, particularly in Europe and the United States.
NIKE has now launched a strong digital marketing campaign to engage consumers across Europe and the United States to stay healthy and connected amid the lockdown. On Mar 24, the company made the NTC Premium free for everyone in the United States for 90 days. NTC Premium offers the best on-demand workouts and expert tips from trainers and others as well as inspiration and support for healthy living. Further, the company’s digital sites and product deliveries are up and running to serve customers.
NIKE is leaving no stone unturned to keep its business going in the tough times. The company has efficiently leveraged its digital presence to build demand avenues in the situation with increased memberships. This effectively illustrates its mantra of delivering a seamless, physical and digital retail. Additionally, the company is poised to take the growth graph ahead with its unparalleled product innovation strategy.
Although the overall market reaction has certainly impacted the company’s near-term performance, it still shows a lot of potential to bounce back on its stringent strategies despite extended store closures. Notably, NIKE reported robust results in third-quarter fiscal 2020, despite the coronavirus-related impacts on its China business due to store closures. Shares of the Zacks Rank #3 (Hold) company have lost 16.6% year to date compared with the industry’s 17% decline.
Looking for Favorable Stocks? Check These
Rocky Brands, Inc. (RCKY - Free Report) has delivered a positive earnings surprise of 13%, on average, in the trailing four quarters. The company sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Chico's FAS, Inc. , a Zacks Rank #2 (Buy) stock, has an expected long-term earnings growth rate of 15%.
Costco Wholesale Corporation (COST - Free Report) has an impressive long-term earnings growth rate of 8.4% and a Zacks Rank #2.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>