Behind Nike's purchase of a consumer analytics firm

This may not be Nike's most significant acquisition in the last few years, but its announcement caused something of a stir during the presentation of the US sport-lifestyle giant's quarterly results, when Mark Parker, Nike's CEO, revealed the group has acquired Zodiac, a New York-based consumer data and analytics firm.

Nike will deploy the Nike + subscription formula in its key cities worldwide this year - Nike

The US group gave no indication of the amount it spent for the acquisition, and it clearly intends to keep a lid on any information about Zodiac. All the pages of Zodiac's website now link back to the Nike site's page which reports the acquisition.

"Zodiac is a small technology firm featuring world-class scientists and engineers, based in New York. They will bring to [Nike] an in-depth understanding of how to optimise and understand what consumers regard as valuable," said Mark Parker. "We have been working with Zodiac for several months, using their exclusive algorithms and analytics models. We are extremely keen on the idea of further developing them, to accelerate the deployment of some of the cornerstones of our strategy," he added.

Clearly, Nike has already shared its plan to double direct consumer sales, chiefly online, a plan called 'Consumer Direct Offense', featuring the '2XDirect' strategy. "2XDirect provides the vision for a different kind of market, connecting Nike more profoundly with its consumers," said Mark Parker. "Our digital business is cutting-edge, and it grew 18% in the third quarter. Last December, we launched the SNKRS apps in China. In one month, there were two million downloads."

Above all, Nike is clearly focused on its subscription strategy as a way of strengthening the relationship with consumers. It announced it wants to broaden the Nike+ subscription programme in its 12 'key cities' worldwide this year, a programme encompassing all the group’s different sales channels.
"We are still in the early days of Nike +, but we observed a strong rise in consumer subscriptions in the third quarter, with new members increasing by more than 50% over the same period last year. Though we are investing heavily in digital tools, we don’t believe that online and brick-and-mortar retail exist in separate compartments. They actually become stronger the more they are inter-linked."

Mark Parker went on to explain how the group is ready to deploy a new concept called Nike App at Retail, integrating the digital experience within its flagship stores at The Grove in Los Angeles and in Portland. Nike subscribers are recognised via the app as they enter the stores, and can then access exclusive in-store services and products, like checking out and paying through the app without having to queue at the tills, or the possibility of reserving a product through the app and hold it in a personal locker.

"What really powers all these immersive consumer experiences is great data and the ability to maximize," added Parker. "Better analytics are also a critical factor in our 2X Speed initiative [designed to cut down the time-to-market of Nike products] as we can meet demand faster and deliver more relevant personalized products. We’ve made good product progress with our Express Lane teams, especially in the EMEA region," said Parker.

Through Zodiac, Nike will clearly boost its digital development and analysis capabilities. The group also stated it will continue to increase its investment in innovation. For Nike, putting more life and resources into its apps - notably its highly successful app for choosing sneakers, on which it currently bases a sizeable part of its product launches and business - is clearly a major growth factor.

Translated by Nicola Mira

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