The fallout from the coronavirus pandemic is laying waste to a retail sector that was already shaky — from struggling traditional players like Macy’s and the Gap (now announcing massive layoffs and furloughs) to widely hyped direct-to-consumer startups lately exposed as far weaker than they appeared (which, like Everlane and Rent the Runway, have been adding to the layoff carnage).
So does any consumer-facing brand that’s not selling groceries or other essentials have a convincing plan for surviving this grim era? Maybe Nike.
In its most recent and keenly awaited earnings call on March 24, Nike reported surprisingly good numbers — despite the company’s heavy reliance on a Chinese market that had been walloped by the coronavirus. In fact, Nike’s CEO John Donahoe declared that, having made it through to “the other side of the crisis in China,” the company now has “a playbook we can use elsewhere.”
That’s a bold claim. And it may prove exaggerated. But the Nike Covid-19 “playbook” deserves the deeper scrutiny of pretty much any retail brand trying to figure out how to survive the months ahead.
The main lesson may be that a robust digital sales and marketing strategy isn’t an add-on. It’s a must. Traditional brands and retailers have paid lip service to that idea for years, but now they’re learning the hard way that half measures aren’t enough.
Here’s the short version of what happened with Nike: When the virus sparked store closures across China, Nike embraced a hard pivot to digital sales and marketing. It reopened physical spaces strategically as the crisis there eased, its decisions guided in part by sophisticated monitoring of its distribution and supply chain. While sales still took a hit, the company’s ability to tap into, and even build on, its robust digital channels eased the pain and, the company says, aided with a quick bounce-back.
Weekly active use of Nike’s fitness apps rose 80% in China.