Nike Inc. is testing its footing in the e-commerce realm, selling goods directly to consumers through a company-operated Web site, but the Beaverton, OR, sports marketing powerhouse insists its online channel is unlikely to cut its retail partners out of the sales loop.
The Internet strategy marks the latest marketing incarnation of a company that began in 1964 with founder and current chairman Philip Knight selling shoes out of the back of his Plymouth Valiant. For the next three months, Nike will offer its new high-end Alpha Project line of shoes, apparel and equipment through www.nike.com as a logistics test phase. The site went live this month.
Nike hopes to broaden its online product selection in the summer, and begin offering goods at all price points before the end of the year. The company acknowledges that some retailers are bound to see the new sales avenue as a threat, but says the site should boost, rather than deplete, the ranks of amateur athletes who shop for shoes in the off-line world.
“I think obviously there's some mixed reaction out there because there's some uncertainty about how this eventually is going to impact [retailers'] in-store traffic,” said Nike spokesman Vada Manager. “But if our projections and strategies are accurate, we should be able to make this a win-win for everyone.”
The Web site will feature a store locator, which lets shoppers find retail locations in their area after entering their addresses and ZIP codes. Nike believes many consumers browsing through the site likely will be steered to brick-and-mortar shops after investigating specifications on shoes and equipment online. Even before developing transaction capability, Nike's site was getting about 1 million monthly hits. The company has yet to make volume forecasts for the site, Manager said.
Nike hopes eventually to boost the locator database to more than 10,000 store locations in the United States, and might expand retailer information to include shops overseas. It hopes to work out any bugs in the locator during the ongoing test period.
Though Nike has never operated its own online sales channel, the company has approved virtual stores operated by large retailers, including Just For Feet Inc. and New York-based Venator Group Inc. — formerly Woolworth Corp. — which owns specialty stores Foot Locker and Champs Sports.
Serious runners are the group of “technologically narrow” consumers most likely to buy through the Web site, Manager said, because they know what they want in terms of cushioning and support before they buy a pair of shoes.
“They may be more comfortable as repeat buyers going online to get the same product they've [bought] in the same size time and time again,” he said. “But in other instances as we develop and introduce new products … we still want those individuals to go to the store and try something out.”