Sources: nike.com/membership
Are Nike’s Member Days loyalty’s future?
Nike in November set member engagement records with the launch of its first globally coordinated Member Days event. The event, started in 2019, offers loyalty members special access, offers and rewards over five themed days.
“From member exclusive product offerings to our first livestreamed member events from our Nike Town London and Passeig de Gracia Store in Barcelona, we created a distinct member experience and set a record for weekly active users on the Nike App in North America,” Matthew Friend, Nike EVP and CFO, said on the company’s second-quarter investor call last month.
The U.S. event in November included:
- Nov. 9 – Member Exclusive Footwear & Running Apparel: Exclusive access to new cold weather running apparel as well as the re-release of the 1979 running shoe, Daybreak, updated in retro colors.
- Nov. 10 – Celebrating PeacePlayers: Members earned an Achievement Badge in the Nike Run Club app by running a 5K or partaking in other activities to raise awareness for PeacePlayers, an organization that uses basketball to unite youth in divided communities.
- Nov. 11 – Save Up To 50% On Select Styles: A flash sale offered discounts of up to 50 percent on various styles.
- Nov. 12 – Exclusive Nike By You Kyrie 7: Members earned a chance to customize the new Kyrie 7 footwear style through Nike By You.
- Nov. 13 – Exclusive Air Force 1: Members gained access to the latest Air Force 1 in colors inspired by World Kindness Day.
Nike attributes its strong member engagement to the options it gives customers to connect digitally. Forty percent of Nike’s online sales this year came from the brand’s mobile apps.
“Not every brand in our industry or other industries is able to have that direct connection with consumers,” said John Donahoe, Nike’s president and CEO. “That’s why we’re putting so much focus on our full consumer funnel, bringing new members into the top of the funnel, engaging the mid-funnel and then obviously, translating that into strong and deep relationships.”
Most member events from other retailers appear largely tied to sales, including Amazon Prime Day, early access to major sales events such as Nordstrom’s Half Year Sale, and Friends & Family days from Macy’s, Gap and others.
Discussion Questions
DISCUSSION QUESTIONS: Would an extended-days program similar to Nike’s Member Days work for other retailers? What can other retailers and brands learn from Nike about engaging members digitally?
Poll
Loading …BrainTrust
Suresh Chaganti
Consulting Partner, TCS
Carlos Arambula
VP of Marketing, FluidLogic
One of the things I’ve always admired about the Nike program is that it’s not about points. It’s just about membership. Once a member joins, Nike tracks their purchase patterns and can promote the right products at the right time. This is an excellent personalization strategy. The benefit of membership is good content and targeted promotions.
Nike is constantly raising the bar with its user engagement strategies. Not every brand has the brand equity or product range to mimic these strategies. But the spirit of the strategies should be adopted by every brand – Loyalty rewards that actually mean something, a program that is easy to understand, and one that encourages stickiness and retention.
Many retailers can learn from the success of Nike’s loyalty program and mobile app. The Nike Members Day has curated further fan loyalty by offering exclusive offers to members. When consumers feel like they are getting special treatment they become more loyal. Loyalty programs are not rocket science but, when done right, they can produce astronomical results.
It is an extension of the brand that will translate well to their consumer base. A lot of other retailers do some sort of program as well.
Clearly, there are lessons to be learned by other retailers from how the Nike Member Days program is implemented, but the bigger, more strategic issue that would take others years to replicate is the ability to gain and maintain a growing base of loyalists and brand ambassadors. This doesn’t happen overnight. It takes time, investment, and a high degree of bonding with the brand over a variety of topics. Nike has painstakingly been at the forefront of this, bonding with their consumers on many issues, and several of them controversial. The good news is that retailers can start their journey today, but senior management needs to understand that this is a marathon, not a sprint (pardon the pun) and that they will endure bumps along the road to success.
The great thing about Nike’s approach is that it is way more than a multi-day version of a one-day sale event. The world already has plenty of multi-day sale events. Nike offers true content and engagement, a real opportunity to explore + experiment. Wouldn’t it be great if brands could use these kinds of events to help raise awareness about sustainability solutions instead of just selling more stuff?
The reason this approach works so well for Nike is because its target consumer thrives off exclusivity and early access to products. Nike plays in a trend-driven space and is more than a brand to its loyal customers. Retailers that function like Nike, such as Levi’s, are doing similar drops for their loyalty members and it works really well. I could see this working in the auto space in addition to fashion.
Reis and Trout wrote “Battle for Your Mind” more than 40 years ago. Its message is as true today as ever. It was required reading for anyone who worked for me and I also provided it to the executives above me.
The message is every bit as valuable as it was, if not more so, today with online sales. 74 percent of shoppers start their online experience with Amazon. Amazon has won the battle of the mind. The Nike program attacks that mindset. Instead of “I need new sneaks” and going to Amazon first, it changes the mindset to “I need new Nikes so I will start there.”
The sooner the shoppers find what they want, they sooner they buy. If they find it on Amazon first, it could be anyone’s brand. If they start with Nike, and are happy, they go no further.
Years have gone into the making of Nike’s culture and loyalty. Another retailer would be hard pressed to jump in with the same strategy and see similar results quickly. The unique culture of the consumers as well as how the products are associated with star athletes might be relatable to another athletic brand. But the strategy would be a miss for a beauty or clothing brand catering to a different style or consumer group.
Is it about “member days” or the gamified experience of rewards and other little dopamine hits along the way? Everything is being gamified – from diet tracking to investment trading to travel rewards programs. For brands to stay relevant and engaging more of them should look for new ways to provide enjoyable gamified experiences for their customers.
The concept of loyalty programs should always have been about special events for members rather than discounts. Other retailers, and not just Nike, that offer uniqueness to their loyal customers are on the right path.
Other brands should absolutely pay attention to Nike’s efforts and methods of engaging customers. What is often ignored is that loyal customers want to be recognized above all else. This is why many loyalty programs have tier levels – which provide access to additional benefits. Nike’s Member Days are a great way to recognize member loyalty with access to exclusive content and offers. Loyalty points are not necessary when the value proposition and recurring customer experience are good (or better than “good”). Of course, a points-based program can be a powerful tool in keeping score, so appropriate recognition and access to customized services can be delivered.
Nike remains on the cutting edge of innovation and driving personalized experiences. The adage is that membership has its privileges, and Nike stands by its brand promise. Nike’s member-exclusive events are an excellent industry-leading example of how to leverage loyalty programs to drive engagement and outstanding experiences.
Nike’s engagement strategies extend beyond the product and commodity with a laser focus on the customer experience and cross-channel journey. Customers seek significantly more benefits beyond product discounts, loyalty points, and membership tiers. Nike’s exclusive content offerings, product releases, and other unique privileges will pay off significantly for the global powerhouse.
As I have often said, loyalty is not about customers being loyal to the brand, but the brand being loyal to its customers. How? By delivering on its promises to its customers. The question is, do member days fit the needs of Nike’s customers? I do like the term member days versus loyalty days. This is a good start toward recognizing the customer-centric approach that all companies should adopt.
The popularity and effectiveness of Nike’s Member Days reflects the power of very intentionally shaping and nurturing the customer (member) experience in a multifaceted manner, as part of the brand’s longer term strategy to focus on direct-to-consumer sales and touchpoints. In exiting wholesale and third-party retail doors, then doubling down on DTC, the Nike Live format, its House of Innovation and related digital tools and apps, Nike is rewriting the script on customer loyalty programs. Other retailers and brands can certainly learn from the evolving Nike playbook, then apply the appropriate components to their retail model and customer base.
We’re seeing the results of years of planning and strategic operations by Nike to get to this moment. Strategically shifting to more direct-to-consumer sales to take ownership of the customer relationship and continuing to entice customers to adopt their loyalty membership and mobile apps has yielded these results. Can other brands imitate this approach? Yes, but realistically you need to be a lifestyle brand and a large enough brand to have the devoted customer base necessary to pull this off as more than just an extended sales event. An adidas, maybe a lululemon, could do it – but maybe tougher for other brands. However, there are pieces of this strategy that all brands can learn from and leverage to improve their own loyalty base.
It’s great to see Nike continuing to lead the pack with its engagement strategies. But it’s equally important to look at “why” this effort has garnered increased attention and urgency.
Many reports state that Nike is looking to fix the SNKRs app and to do a better job handling bots before they drive away loyal customers. That suggests that Member Days were put in place, at least partially, as an approach to ensure that real people — not bots — get access to limited edition products, including Kyrie 7 and Air Force 1 brands, and to attempt to handle flash sales more effectively. Nike is also reportedly using a “dedication score” to further differentiate and provide product access to its biggest and most ardent fans and supporters.
This is one way to handle bots, but it seems that a better bot mitigation strategy – one based on machine learning and constant feedback loops – might serve the brand equally well. Other brands should watch Nike’s moves with a keen, yet skeptical eye, and rather than be a “fast follower,” assess whether their business warrants similar strategies.
Loyalty programs that seamlessly integrate to consumers behavior and habits are the future.
Nike had a unique consumer cohort in place with sneaker heads, and they have tapped into the culture and provide an asset to the established behavior of a consumer group.