Nike's Social Network For Runners Helps Boost Shoe Sales
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| Nike+ Web Site Allows Runners To Network |
Since the '06 launch of Nike+, the company "has built a legion of fans," and is "building brand loyalty via online social networking," according to Jay Greene of BUSINESS WEEK. The technology used in Nike+ "tracks data of every run and connects runners around the world" at nikeplus.com, and this past August, 800,000 runners "logged on and signed up to run a 10K race sponsored by Nike simultaneously in 25 cities." The company now is "testing a social network to promote its basketball shoes,"and Nike is "beta-testing Ballers Network, a Facebook application that lets players organize real-world games and manage their teams online." But how Nike+ "benefits the company's bottom line is harder to gauge." SportsOneSource said that Nike "accounted for 48% of all running-shoe sales in the U.S." in '06. Market share has increased since then to 61%. SportsOneSource analyst Matt Powell: "A significant amount of the growth comes from Nike+." Greene notes Nike originally envisioned Nike+ as a "clever way to combine music and running, not as a prototype for a new kind of marketing." Nike Global Dir of Brand Connections Stefan Olander: "It was never about how can we convert some percentage of users (to buy Nike shoes)." SportsOneSource indicated that Nike to date has sold 1.3 million Nike+ iPod Sport Kits, and 500,000 SportBands, "wristwatch-like devices for runners who don't want to listen to music." Sales from these products have totaled $56M, though that is "just a rounding error" for a company that posted $18.63B in sales in FY '08 (BUSINESSWEEK, 11/17 issue).
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