The global sportswear company Nike believes that the huge shift of consumers to online sale channels could be a permanent feature of the industry. This was commented on by the company after it reported a huge growth in its online sales which helped the company to stage a turnaround from the hit to its business because of the novel coronavirus pandemic.
A growth of 82 per cent in the total digital sale was noted by the United States based company for the June to August quarter which comfortably offset the drop in revenues at the stores as consumers refrained from moving out much and with many stores still not back to full capacity.
The company also reported revenues of $10.6bn with a recovery in demand and sale in many of its critical markets – including that of China.
In the preceding quarter the company had reported a drop of more than a quarter for its revenues because of lockdown and store closures in market throughout the world.
The shift to online sales could be a permanent trend, said Nike chief executive John Donahoe. “We know that digital is the new normal. The consumer today is digitally grounded and simply will not revert back,” Donahoe said.
While the company reported a decline in sale in its core North American market during the quarter, it also noted strong sale growth in its major markets including China, Japan, South Korea and the United Kingdom.
The shares of the company propped up by more than 10 per cent in late trading in the US with the company reporting better than expected results for the latest completed quarter.
Release of its limited edition footwear was being made by Nike through its website and shopping apps.
Over the past few years, the sportswear giant has adopted new strategy of transforming itself into sell directly to customers business model which has reduced its dependency on store and retailers as well as reduced presence in stores and at its retail partners.
Strong demand for more casual attire has been reported by sportswear companies with more people work and exercise at home because of the closure of many gyms during the pandemic.
An improvement in sales trends was also reported by Nike’s rival Adidas last month. On the other hand, a 175 per cent growth in its online business was reported for the last quarter by yoga pants maker Lululemon.
Because of the restrictions imposed on the number of people who can come into its stores at once because of the pandemic, Nike, like many other retailers, is still limiting people entering its stores.
But Nike said that those who are entering the store are exhibiting a strong intent to purchase.
(Adapted from BBC.com)