Even before the pandemic,
had been stepping up its efforts to sell directly to consumers and online. That’s been a winning strategy throughout the Covid-19 crisis, and the athletic giant’s latest moves show it’s doubling down on that strategy.
On Wednesday, Nike (ticker: NKE) announced changes to its senior leadership team, as it aims to support its Consumer Direct Acceleration (CDA), a strategy it announced last month.
In its press release, Nike said the moves would further its CDA goals of creating “a more premium, consistent and seamless consumer experience across Nike’s owned and strategic partner ecosystem,” and uniting its technology investments to boost its digital transformation.
Nike named a number of new executives to its team to spearhead different geographies and brand segments, but also warned that changes to its operational model to fit with its CDA will likely result in a net loss of jobs across the company. Nike is planning to take a one-time pre-tax charge of $200 million to $250 million to cover the termination costs.
Most of the new appointees are Nike veterans, aside from a couple of recent hires from
(KO), so it’s not a huge shift in terms of C-suite composition. However, with more than half a dozen new promotions, it does show that the company is looking to move quickly as it shifts to an ever more digital and direct-to-consumer (DTC) strategy.
It’s not surprising that the company is looking to move fast in this direction. Even before Covid, Nike had seen success with these efforts, as it invested heavily in improving its digital presence and selling directly to consumers. This year, even with the economic uncertainty stemming from the crisis, people have shown they’re still willing to spend money, especially on health and wellness.
Nike’s most recent quarter showed that its robust e-commerce business still wasn’t enough to offset store closures. No wonder then that the company wants to speed up its growing online presence. Recent spikes in coronavirus cases have many cities and states rethinking reopenings, while many consumers may choose to stay home even when stores reopen.
Yet longer term, investments that Nike and others make their digital business will remain crucial, pandemic or not. Many industry watchers believe that the pandemic accelerated trends already in place in retail, especially consumers’ willingness to buy more and more often online.
Nike is up 0.2% to $98.56 in recent trading.