Whitney, great article! It is so interesting to learn about how Nike is reorienting themselves in the new ecommerce world. Nike has historically been a leader in product innovation as well as store experience. I remember when the Nike flagship store opened in Chicago and it was beyond a store, it was an experience! I see the initiatives that you document here as Nike’s attempt to start the transformation, but to your point, there’s so much more to be done to become a leader in the future.
The question that you asked that is the most interesting to me is: how do partnerships, such as those with Amazon, Nordstrom and other retailers, play a role in the long-term strategy? In my opinion, they are going to be crucial. Foremost, this will enable Nike to get broad reach to people who are already shopping in these channels and may not otherwise go to Nike.com. Moreover, they will be able to leverage the supply chains to get clients what they want, when they want it. I believe that long-term the branded dot com website plays a strong role in building the brand and should have differentiated products to the other channels that they’re selling in, but it will be a place to cater to Nike aficionados rather than your casual customer buying a new pair of sneakers. That way, Nike will not have to overhaul the supply chain to stay in sync with every supply move that Amazon makes, but rather they can focus on their core customer promise through the dot com property. Moreover, one day they may be able to share warehouse space and leverage the supply chain capabilities of Amazon, even for those shoes they sell on their branded site. Amazon may seem like the foe right now, but one day I could see a very successful and symbiotic relationship between the two companies with each doing what they know best.
Great article, CN! It is really interesting to think of the implications that an isolationist trade policy would have on one of the favorite past times in the United States. I personally cannot imagine going to a Mexican restaurant or a hot summer day and not being able to order a cheap Corona to enjoy!
Though all of your suggestions are great, this article actually made me think that Constellation Brands should start to diversify the end-market for Corona to non-US markets. Foremost, they would be able to avoid the implications of a potential NAFTA breakdown and diversify the risk to other markets. Second, in my experience traveling abroad, I noticed that Corona sold for much higher prices and to more fanfare than in the United States. Constellation Brands should build on that momentum and create better supply chains to those markets, whereby decreasing the price to provide while maintaining the elevated end-price to consumers. They would also be able to use these new supply chains to bring their other brands, notably their wines, as consumer taste shifts towards new alcohol beverages in underserved markets.
This article highlights how Walmart is both powerful and powerless as a major retailer in the United States. While it has incredible buying power throughout the world and the ability to drive down costs across its supply chain, as a retailer who counts every penny, it will be greatly hindered if isolationist trade policies take effect in a major way in the US.
The biggest issue here is the mismatch between what the consumer hypothetically wants (made in America) and what they actually want (affordable goods). In my opinion, there is no way for Walmart to compete on price as well as production location. It must hunt for the most competitive pricing possible in order to maintain its razor thin margins. Moreover, consumers are not willing to pay a premium for goods ‘Made In America,’ and will ultimately default to the lowest cost provider .
Though isolationist trade policies would affect the entire retail industry, it is Walmart whose customer promise is “everyday low prices” and without the ability to deliver that, they will likely face major headwinds. This will likely be amplified by Amazon, who is able to provide comparable prices as well as the added benefit of fast delivery directly to the consumer’s door.
Thanks for posting. While I agree that Nike does a lot of great things for sustainability in its products, I believe there is more to this story than meets the eye.
This article overlooks a dirty secret in the retail industry, which is arguably one of the most polluting industries, which would paint a less positive picture for Nike. When retailers have overstock (i.e. items that they cannot sell) and do not want to sell them through outlet sites: they burn the extra items. This is a practice that has had much attention drawn to it in the past few years, but little has been done to stop it as most of the burning happens in developing countries. It has been reported that Nike burns excess scrap shoe that is not used in end production as well .
While all of the other initiatives make the end product for Nike look particularly sustainable, I wonder if they are doing enough to offset some of the dirtier practices of the industry.
Erica, thank you for the buzz-worthy article! As a coffee drinker myself, this article pushed me to think about the impact my coffee drinking habit has on the climate and visa versa. It is great that Illy is focused on changing the coffee industry through responsible supply chain processes, environmentally friendly cultivation, low emissions facilities and packaging. I agree with you that marketing should drive more attention to these practices and that the company can use more temperature-resistant beans to address rising temperatures.
The two big questions I have for leading coffee companies are:
1) Given the advent of pod technology in coffee consumption (e.g. Nespresso, Keurig), can we change consumer habit away from using these wasteful products? Can Illy market better ways to consume coffee that have less packaging?
2) Given that coffee is often produced in locations (e.g. South America) that it is not consumed, how can we bring production closer to the consumer so we spend less money and reduce environmental impact of shipping coffee?
While reading your article, I wonder if Illy could take a more prominent role in leading those two issues and set a new status quo for the coffee industry as a whole.
Niko, great article! Before reading, I do not think I appreciated the challenge that Walmart is facing today trying to both catch up to Amazon and predict what’s next in consumer preferences with technology. I’m impressed with the three-pronged approach they are taking to modernize through acquisitions, fulfillment center investment and hybrid models.
I agree that the acquisition of Jet.com is crucial as they start to reorient themselves towards a modern supply chain, but believe that the Bonobos and Modcloth acquisitions were more about understanding consumer preferences in e-commerce. I am curious to see where this leads them as the Bonobos and Modcloth as they are both experts in producing items for their target audiences, but they are both more upscale than the traditional Walmart clothing selection. Hopefully, Walmart will leverage the consumer data and client-centricity of these brands to create a better product, but also a more streamlined product development cycle, better forecasting of items and an improved interface for online shopping.