Nike Inc. started its fiscal 2024 with digital sales growing in its first quarter ended Aug. 31, 2023. The athletic apparel and footwear retailer did not share a dollar amount for digital sales but reported $12.9 billion in revenue for the quarter. That’s up 2% versus Q1 of its fiscal 2023.
Nike ranks No. 9 in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers.
Nike’s digital retail strategy
Chief financial officer Matt Friend said Nike consumers spent more time in brick-and-mortar locations in the quarter.
“But 90% of their shopping journeys are starting with digital,” Friend said. “And so we continue to believe that our digital and physical strategies of serving consumers are the right strategy to serve demand as we look forward.”
In North America, Nike Digital sales grew 4% in the retailer’s first quarter. Nike Digital refers to sales made through the retailer’s websites and apps.
At the same time, Nike Digital sales in Europe, the Middle East and Africa decreased 2%. And they decreased 3% in Asia Pacific and Latin America. In Mexico specifically, though, Nike’s “digital business delivered double-digit growth,” Friend said, without revealing more.
“We’ve increased the size of our supply chain in the last few years to be able to address the growth that we’ve seen in our business, both overall and in digital,” Friend said.
To improve that efficiency, he said, Nike has reduced digital split shipments so consumers don’t get two deliveries for the same order. It has also invested in “regional service centers that are closer to where consumer demand is.” In other words, it has improved its fulfillment by opening distribution centers in strategic areas.
Nike Digital sales in China
In the Greater China region, Nike Digital sales grew 6% in Q1. The footwear brand held a three-day sports festival called Sportchella in China.
“The team amplified the impact of the festival by partnering with Tmall to create the first Nike Super Brand Week, which drove more than 2 billion impressions,” Friend said. “And this partnership seamlessly integrated the events with a digital shopping journey that generated very strong consumer response and engagement.”
Tmall is an Alibaba-owned marketplace, along with Taobao. Taobao ranks No. 1 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the largest such marketplaces by gross merchandise value. Tmall ranks No. 2.
Nike App increases Nike sales
The Nike mobile app had “strong growth,” Friend said. Nike mobile app traffic had high single-digit growth in the quarter, he said.
“We saw member activity continue to increase both in terms of engagement and buying behavior and a higher basket size, a higher AOV,” Friend said.
That drove “sustained momentum on the Nike mobile app” as loyalty members increased their buying frequency in the quarter, he said.
“We continue to see a growing structural advantage as more consumers start their shopping journeys with us on mobile,” Friend said.
Nike Direct revenue
Friend said member engagement through Nike Direct grew double digits in its Q1 compared with the year-ago period. Average order value through Nike Direct sales increased, but he did not specify how much.
Nike Direct refers to the retailer’s direct-to-consumer sales (online and offline). It grew 6% year over year in the first quarter.
In North America, Nike Direct grew 7%, led by 11% growth in physical store sales. Nike Direct sales grew 10% in China. They grew 6% in Europe, the Middle East and Africa, and 3% in Asia Pacific and Latin America.
How much does Nike make in a year?
For the fiscal first quarter ended Aug. 31, 2023, Nike reported:
- Revenue grew 2% to $12.94 billion, from $12.69 billion in the year-ago period.
- Profit also grew 2%, to $5.72 billion from $5.62 billion the year before.
- Similarly, Nike Digital sales grew 2% year over year in the quarter.
- Nike Direct, or the retailer’s direct-to-consumer sales (online and offline), grew to $5.4 billion. That’s a 6% year-over-year increase.
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