retail news in context, analysis with attitude

by Kevin Coupe

Nike is getting into the automatic replenishment business. And it is doing it with kids’ sneakers … which strike me as about as appropriate as I can imagine for such a program.

Here’s how Fast Company frames three important parts of the innovation:

• “Today, the retail giant launches the Nike Adventure Club, which will send a pair of Nike or Converse kicks at regular intervals. You can get them on a monthly, bimonthly, or quarterly basis. Each pair of shoes works out to between $50 and $60 a pair - which puts the service on higher end of the kids’ sneaker market (though Nike’s kids’ sneakers themselves vary considerably in price from $40 to $100, so many of the shoes within this program may actually be cheaper than buying directly from the store). Customers can choose what style they want, from performance shoes for sport to casual everyday sneakers, and they can also skip months and easily swap sneakers if they don’t fit or their kid doesn’t like them.”

• “The online interface allows them to easily pick the style of the shoe they want in the box (their parents don’t have to worry about pricing differences, since the program charges a single monthly fee). And to make the unboxing experience more fun, Nike is customizing the box with the kid’s name. It is also collaborating with KaBoom, a national nonprofit focused on giving kids of all backgrounds the opportunity to play. Together, Nike and Kaboom will create content and activities, filling the box with things like stickers and booklets with ideas for fun outdoor activities.”

• “When your child grows out of a pair or they get worn out, you can send shoes back—either in the Adventure Club box or by requesting a prepaid shoe bag—to the company, and even include non-Nike shoes you want to get rid of. If a shoe is in good condition, Nike will donate it to a nonprofit. But if it has reached the end of its life, Nike will recycle it through its Grind program, which breaks down athletic footwear to turn it into other products, including running tracks and playgrounds.”

Readers of MNB know that I’m a big enthusiast about replenishment models … it has been spectacularly successful for Amazon’s Subscribe & Save. The Nike version makes a lot of sense, and has the potential of turning these kinds into lifetime Nike customers. Plus, Nike gets a lot of data about these young customers, and is able to act on that information with real insights in the future.

That’s an Eye-Opener.
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