As I sit down in front of my computer, preparing for another exhilarating Zoom lecture, I take a look at myself in the video test window before entering the Zoom room. Of course my video is going to be turned off, but I take a moment to check my hair, make sure there’s nothing in my teeth in case I’m called out by the professor. During this process, I take a look at what I’m wearing, and I chuckle. There I am again, in a pair of comfy training pants and a Dri-Fit shirt with an inspirational quote on it. This has become my norm in a world where I never go outside, and I know that I am not the only one.
Athleisure is a category of clothing that has steadily been gaining traction as a real fashion trend, and with the onset of the COVID-19 pandemic, it has broken through as a true mainstay of all wardrobes. Comfortable, multipurpose clothing that is passable in a video meeting is a dream come true for all those continuing to work at home, as well as students struggling to show up for Zoom University in a presentable fashion.
There are several brands that have tried to capitalize on this growing trend, like Adidas and Puma, but the two largest competitors in the industry are Nike and Lululemon. Lululemon certainly has the power of recency on its side, as well as an established niche as the premier brand for women’s athleisure. When one thinks of fashion, they don’t necessarily think Nike. However, it is also easy to forget that Nike stands in a league of its own as one of the largest brands in the world.
While many of its competitors have struggled with the forced paradigm shift brought on by the pandemic, Nike has instead exceeded expectations for its first fiscal quarter of 2020. According to Barrons, earnings per share was projected to top out at around 50 cents per share, but instead Nike nearly doubled that mark at $0.95/share, revealed in its quarterly release of earnings. To add onto all of that, Nike stock had been rising in value ever since the beginning of the pandemic, and on September 29, it capped out at $130/share. That is more than double what Nike shares were worth before the first time the Dow Jones took a dive in March.
So what gives? How has Nike managed to find success, even exceed expectations, in a time where every retailer other than Amazon seems to be reeling from losses? Well, one possible reason is the massive boost in online sales across the world. The overall increase totaled 82%, with there being double digit gains in the major regions of North America and Greater China, and triple digit increases in other parts of the world like Europe and Africa.
How has Nike managed to find success in a time where every retailer seems to be reeling from losses?
The infrastructure and hardware necessary to facilitate a large volume of online sales had actually been an ongoing project, and the pandemic became an opportunity to prove to shareholders that Nike was moving in the right direction. It came at the perfect time as well, following a major strategic decision in the summer to cut some low-tier distribution partners in favour of improving the online selling platform and establishing better B2C channels. The decision was not unanimous, facing some opposition from major shareholders, yet the fact that Nike has not only met expectations but exceeded them should be reason for the company to further investigate a diverse portfolio of B2C strategies.
Other factors contributing to Nike’s relative success over the past half year include: mobile applications like the Run Club app that have been key in engaging customers with Nike products and physical activity, the introduction of a new yoga collection to rival Lululemon offerings, and the Move to Zero sustainability initiative.
In the retail industry, businesses fade in and out of relevance, following the times and consumer demand. Some companies capitalize on these trends to achieve profitability for a short moment of time, but fail to establish a long term presence. Nike is a company that has stood the test of time — a household name in the world of sports. With the arrival of athleisure as the new “thing”, Nike looks to further extend its reach as the goddess of victory smiles from above.