Nike, known for athletic footwear and clothing, began developing innovative products in 1964.

Phil Knight and his university track-and-field coach, Bill Bowerman, founded the company Blue Ribbon Sports and worked with a Japanese production company on ways to improve athletic footwear. The company was innovative from the onset, with new designs and new ways promoting their products, for example, through endorsements by athletes. After breaking its relationship with the Japanese production company, changing its name to Nike after the Greek goddess of victory, and incorporating the iconic swish logo, the company was set for decades of growth. Nike has never been afraid to take a stand on political issues, from better working conditions for its factory workers in developing countries to endorsing Colin Kaepernick, who protested police brutality toward Black Americans.

Nike's most recent innovations are data driven. It calls its new strategy "triple-double"—2x innovation, 2x speed, 2x direct connections with consumers. To achieve the objectives that Nike has set out for itself, the company is collecting more data on its customers and changing the way it does business in order to be closer to the customer.

Rather than develop its data programs on its own, Nike has been on a buying spree, acquiring technology companies. In March of 2018, Nike purchased the data analytics platform Zodiac, and in April of the same year, it purchased Invertex Ltd. and transformed it into the Nike Fit program. In August of 2019, Nike purchased the predictive analytics company Celect. The Celect purchase was an important move for Nike's data strategy because the Celect came with a large database and software that allows retailers to optimize sales and forecast online activity both locally and globally.

Nike made the decision that it needed to regain ownership of the customer experience to be closer to the customer. This allowed it to collect the data needed for its new predictive models. The company was aware that NikePlus members spent three times as much as guests on the company website, so it put programs in place to encourage membership. NikePlus members have access to Nike Run Club, Training Club, and the SNEAKERS app. In this way, Nike collected data on customer interactions and health data on their exercise routines. This information lead Nike to change the way it segmented the market from demographics to interests and lifestyles.

Nike also streamlined its distribution systems to regain ownership of the customer experience. It made the decision to cancel its contract with Amazon, moving toward a direct-to-consumer model for both online and offline sales. Nike kept its relationship with some of the retail stores currently selling their products, like Foot Locker, but changed the customer experience in these stores; for example, NikePlus members can customize their in-store experience at Foot Locker locations. Also, as part of the direct-to-customer business model, Nike decided to focus on 12 major cities throughout the world, projecting that this would account for 80 percent of its growth over the coming years.

Nike used the data collected from all the customer sources it developed to customize its products, design new products, and change its distribution system.

 

Where do companies that collect large amounts of data from their customers, like Nike, store this data?

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