Nike: House Of Innovation

How might we create the most innovative direct to consumer experience in the world?

Market Foresight | Future-proof Innovation

Nike now makes $12.4 billion (or 36% of its annual revenue) from Direct to Consumer sales

Nike’s Challenge

In 2015, CEO and President Mark Parker set an ambitious revenue goal; USD50 billion by 2020. To achieve this goal we worked with the retail innovation team to pursue a Direct to Consumer (DTC) strategy that would capture more revenue and a higher margin for the business.

The Sense Worldwide Approach

We knew that some brands, like Apple, Lush, M&Ms and Lego, are able to attract customers to bricks and mortar stores by offering unique experiences, making them ‘destinations’. We also knew that a me-too strategy was not an option for a brand like Nike. To ensure a future-proofed strategy we needed accuracy market foresight that would subvert the trend of declining high street foot traffic.

How The Sense Network Shaped The Future of Retail

We engaged radical thinkers and extreme users to understand what constituted ‘state-of-the-art’ in retail and digital consumer experiences across the globe. Using this insight as inspiration, our task was to design a consumer journey that would exceed this benchmark. We wanted to create an experience with touch points that would communicate and demonstrate pinnacle Nike product and service innovations.

The Outcome

‘The House of Innovation’, opened its doors in November 2018 and can be found on the corner of Fifth Avenue and 52nd Street in New York. There is now also a store in Shanghai and, undeterred by the turbulent 2020, Nike announced the launch of its next store on the Champs-Élysées in Paris. In 2020 36% (or $12.4 billion) of Nike’s revenue now comes from DTC activations.

The Result

2020 was, to say the least, an interesting year. Nike was projected to make USD41 billion. While this missed Mark Parker’s ambitious moonshot target it was USD6 billion above where Nike was set to be based on its previous growth trend. This represents 17% growth compared to the projected revenue.

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