In the direct-to-consumer sales race, in the sprint to get shoes on feet and apparel off the racks, Nike has evidently brought its A Game to digital.
In the summer of 2017, the company said it would look to gain traction with what it called the Consumer Direct Offense, which in part looked to boost sales done through mobile devices.
The firm’s latest earnings illustrate the sizzle of its strategy. In terms of headline numbers, the company logged $10.7 billion in revenues, up 7 percent year on year.
Digital, as reported, was up 42 percent year over year, accelerating from the mid-30 percentage point realm growth rates earlier in the year, and in commentary from CEO Mark Parker, the company has done well even amid volatile macroeconomic and geopolitical backdrops. The app has proved effective, especially among retailers where consumers can scan items in the store and get details on inventory and offers. This last point shows that the omnichannel retail experience can be a boon for in-store, physical shopping (and thus, depending on how you look at it, brick-and-mortar need not be dead).
Digital, of course, also can help goose margins, as gross margins grew to 45.7 percent in the period, up 150 basis points year over year. As has been seen in previous quarters, “tailored experiences” aided by algorithms are strengthening company/consumer bonds, as major regions such as North America and China were up double-digit percentage points year over year. Nike has also pointed to RFID technology as aiding supply chain efficiencies.
International Payments: Strong growth lies ahead for payments across borders as Bill.com reports that it now facilitates international payments across 106 currencies and 137 countries. The firm said transaction processing is up 216 percent year over year and total payment volume is up 258 percent.
AI-Powered and Online Lending: Kreditech, an artificial intelligence (AI)-based loan startup focused on emerging markets, has raised $22 million in a funding round. And Carvana, which lets consumers browse and purchase vehicles online, has added a new virtual financing option, in tandem with Regions Bank through a co-branded site.
Cars, Ever More Connected: General Motors will let U.S. owners of vehicles that are 2018 models or newer download Amazon’s Alexa digital assistant software to control phones, navigation and streaming media. The auto giant noted earlier in September that it would embed Alphabet’s Google technology into vehicle dashboards sold outside of China beginning in 2021, Reuters reported.
IPOs: No shine for initial public offerings (IPOs) this week, as WeWork shelves its IPO plans, even after ratcheting down valuations by more than 70 percent to $15 billion (or less) and shares of exercise equipment maker Peloton were off high single-digit percentages on their first day of trading on Thursday.
Facebook’s Libra: Regulatory scrutiny is still coming in waves, and now, adding to the confusion as to whether or when, and just what Libra is, the Security and Exchange Commission (SEC) says it is not prepared to rule, yet, if Libra is a security.