Will Nike’s new CEO accelerate its consumer-direct digital transformation?
Nike announced earlier this week that its longtime chief executive, Mark Parker, would be stepping down from that role and be replaced by former eBay CEO John Donahoe in January. Mr. Donahoe, who has been on the Nike board of directors for five years, is also currently chairman of PayPal.
Mr. Parker, who replaced Nike founder Phil Knight as CEO in 2006 and will remain with the company as its executive chairman, said Mr. Donahoe’s background makes him an ideal fit to lead the brand at this point in time.
“I am delighted John will join our team,” said Mr. Parker in a statement. “His expertise in digital commerce, technology, global strategy and leadership combined with his strong relationship with the brand, make him ideally suited to accelerate our digital transformation and to build on the positive impact of our Consumer Direct Offense. I look forward to continuing to lead the Board as Executive Chairman, as well as partnering closely with John and the management team to help him transition to his new role.”
The decision to hire Mr. Donahoe resulted from a planned succession led by Tim Cook, CEO of Apple and a member of the Nike board since 2005.
Many see Mr. Donahoe’s hiring as a sign that the athletic lifestyle brand intends to put the pedal to its consumer direct digital transformation strategy. Nike, which generated about 15 percent of its sales from its own website and retailer partner sites last year, has previously said it sees that percentage rising to 30 percent by 2023. The company expects that sales generates online for its products will eventually surpass those sold in stores.
Nike reported that sales for its first quarter ending on Aug. 31 were up seven percent overall, driven by a 42 percent increase in digital sales. Earnings for the quarter were up 28 percent.
In August, the brand launched Nike Adventure Club, a digital sneaker subscription service for kids between the ages of two and 10. Members have three different subscription options, which range from receiving four pairs of sneakers per year up to 12. The cost for each of the options is $20, $30 or $50 a month. Nike rolled out the program after a pilot program that involved 10,000 members.
- Nike, Inc. announces Board Member John Donahoe will succeed Mark Parker as President & CEO in 2020, Parker to become Executive Chairman – Nike, Inc.
- Nike, Inc. Reports Fiscal 2020 First Quarter Results – Nike, Inc.
- Nike sees online eclipsing offline sales – RetailWire
- Is Nike’s new subscription program for kids a parent’s best friend? – RetailWire
DISCUSSION QUESTIONS: What do you think of Nike’s decision to name former eBay CEO John Donahoe as the athletic lifestyle brand’s new president and chief executive? How do you expect Nike’s digital strategy to differ under his leadership versus that of Mark Parker?