Nike CEO Says U.S. Retail Is ‘Not In A Steady State’
Nike Chief Executive Mark Parker said the U.S. retail landscape is “not in a steady state” as consumers spend more online and make fewer visits to brick-and-mortar stores. That behavioral shift has resulted in hundreds of store closures and higher promotions, putting pressure on major retailers and apparel and footwear makers like Nike that depend on them for sales. “The important thing to point out is that these changes are being driven by the consumer,” Parker told analysts during Nike’s quarterly earnings presentation on Tuesday. “Consumer demand remains quite strong but expectations remain high in terms of product, the innovation, and the style. They want it fast, easy and [they want] personal service.” Nike reported a slim 3% increase in sales in North America for the fiscal third quarter, results that include revenue booked for much of the key holiday shopping season. While the overall retail industry enjoyed a strong holiday season for 2016, online sales generated much of the growth. Many physical store retailers lamented that promotions were very high for the season—comments that Nike executives echoed on Tuesday. Parker told analysts that the consumer “has decided digital isn’t just part of the shopping experience. Digital is the foundation of it.” He added consumers expect more from brands when it comes to personalized service, a faster pace of innovation, and a better in-store retail experience. Nike is aiming to address all of those elements: the company is trying to offer more services like personalized shopping, quickening the pace of innovation to get new product on store shelves faster, and also working with stronger retail partners like Foot Locker and Dick’s Sporting Goods to better present Nike goods. Nike, like Adidas, is also taking more ownership of its own fate by focusing more attention on their own physical stores. Read more at Fortune.
