Nike Kicks Off Subscription Business
● The company is hoping to tap into the growing rental industry, while creating lifelong brand loyalists.
Nike has its eyes set on the next generation with the launch of its first subscription shoe service for kids.
Nike Adventure Club, which launched Monday, allows children to swap Nike and Converse sneakers every 90, 60 or 30 days for $20, $30 or $50 per month, respectively. Parents can change their shopping options, upgrading or downgrading, at any time while choosing from more than 100 different sneaker styles for children ages two to 10, or sizes 4C to 7Y.
Dominique Shortell, director of product experience and retention for Nike Adventure Club, said the program is not just for kids, but intended to alleviate some of the stress parents experience when shopping for their children and their evergrowing feet.
“We want to make shopping for footwear as convenient as possible for them,” she said.
The program also serves as a gateway to future shoppers, building brand loyalty before consumers are even old enough to shop for themselves.
“What's interesting is that this younger audience is creating this disruption and making even the most traditional brands, the most traditional media outlets, think about how they can target these younger customers, through the channels that the customer cares about,” said Alison Bringe, chief marketing officer of Launchmetrics, a software company and data platform.
Much like other subscription apparel services, parents can also purchase the shoes that they rent from Nike Adventure Club if they like. But, unlike other subscription services, like Rent the Runway, which keeps renting out its clothing, Nike will donate or recycle the used shoes.
Nike's kid-friendly subscription boxes come with activities, such as adventure guides made to be drawn on, and printed boxes with the child's name on it.
There's no word yet if Nike will expand the program to include apparel or adult sizes.
“We're just really excited to be launching Nike Adventure Club and are eager to ensure we deliver a great service to busy parents, while encouraging their kids to be more active and enjoy fun adventures,” said Sandra Carreon-John, global corporate communications director of Nike Inc. She added that the company is “always innovating around how we serve members.”
The news comes as many competitors are diving into the growing apparel rental market. Urban Outfitters announced the launch of Nuuly, a subscription service, this summer. In April, Walmart partnered with Kidbox, an emerging online platform that sends out seasonal boxes of baby and kids fashions six times a year. American Eagle Outfitters has American Eagle Style Drop. Amazon recently expanded its try-before-you-buy apparel and accessories Prime Wardrobe program to include an online Personal Shopper for members.
Still, despite the competition, Nike may not have much to worry about. Athletic and footwear stocks, such as
Nike, Lululemon and Under Armour, are trading at premium prices compared with historical valuations, John Kernan, an analyst at Cowen Insight, wrote in a recent note. In the case of Nike, revenues totaled more than $10 billion last quarter. Shares of Nike's stock, meanwhile, are up more than 10 percent year-to-date. Nike also scored the highest among apparel-makers to have an emotional connection with shoppers, according to MLBM's recent Brand Intimacy Survey. The higher the emotional connection a brand makes with consumers, the firm says, the more likely the company is to have higher profits.
“Nike is accelerating supply chain and digital investments, opening new opportunities for faster speed to market and improved inventory efficiency, leading to margin expansion,” Kernan wrote.