Nike Inc. sees opportunities to grow its business with women, but will need to change its approach to reach them, relying less on athletes and more on “real women” and “microinfluencers” to gain share.
On the most recent earnings call, Chief Executive Mark Parker said over the past three months, three of the company’s shoes, priced above $125, have become the top-selling athletic footwear models for women: 270, VaporMax, and Epic React. Lifestyle products “set the pace for the category” with the tops and fleece business growing.
“One of our biggest opportunities for fiscal 2019 is to scale our women’s sneaker business across both Nike and Jordan,” Parker said, according to a FactSet transcript.
Among the big names associated with Nike’s NKE, -2.63% brand are NBA’s Kevin Durant, U.S. Open-winning golfer Brooks Koepka, and tennis champ Rafael Nadal. In tennis, fellow Grand Slam champ Serena Williams and Simona Halep, this year’s French Open winner, also have partnerships with Nike.
However, female athletes with big athletic sponsorship deals are few and far between. On a list of athletes with the most endorsement deals provided by jewelry designer Dana Rebecca Designs, mixed martial arts star Ronda Rousey, race car driver Danica Patrick and Serena Williams are the only women on a list of 15 athletes with the most deals.
“Nike has a strong track record of using celebrities as part of their overall marketing strategy and studies show that influencers can be impactful in driving purchase decisions…especially among younger audiences,” said Katie O’Dell, senior vice president of strategy at Ansira, a marketing agency. “However, many big brands have seen a lot of success over the last couple of years using real women at the heart of their campaigns.”
See: Under Armour’s The Rock shoes sell out in 30 minutes
Among those are brands are Unilever PLC’s ULVR, +1.54% Dove brand, which has become famous for its “Real Beauty” campaign, and American Eagle Outfitters Inc.’s AEO, +0.42% marketing for the Aerie lingerie brand that is focused on positive body images using “real women” in photos that haven’t been retouched.
Nike has reached out to women using this strategy, as in the “Better For It” campaign, one of O’Dell’s favorites, that uses real women and their everyday fitness goals – running a first half-marathon or dead-lifting your body weight for the first time – as inspiration.
“If Nike wants to have relatively broad appeal, taking a similar approach as they look to expand their business with women might be the way to go,” said O’Dell.
In addition to “real women,” “microinfluencers” could be key, according to Jessica Ramirez, retail research analyst, Jane Hali & Associates. Those on Instagram with 25,000 followers are one definition of a “microinfluencer.”
One example would be Clémentine Desseaux (@bonjourclem, 79,800 followers), a “model, muse and entrepreneur.”
Ramirez suggests mixing celebrities with “microinfluencers” who are more “relatable” to potential consumers.
Athletic gear and athleisure has become more fashionable, with yoga pants going from the studio to brunch and even the office. And streetwear, historically male-centric, is making gains with women.
“Nike snoozed a bit and didn’t have the right influencers,” said Ramirez. “Nike woke up and they’re going in full steam. Now they’re providing newness to future-proof the brand.”
The culture of gender and female empowerment isn’t tied to athletes, says Agathe Blanchon-Ehrsam, chief marketing officer of business consultancy and branding company Vivaldi.
“We’ve seen that women are motivated by being part of a movement, by participating in a lifestyle — not necessarily by the performance of top athletes,” she said. “With the increase in fitness tracking, the competition is more personal, while the activities themselves have become more social.”
Besides expanding the range of sizes in shoes and apparel to fit women, Nike is seeking newness in areas like fabric innovation. For example, Nike’s Parker said the company is “building on our leadership in bras and bringing more innovation through Flyknit apparel in the second half of the year.” Flyknit technology is lightweight, but uses strong fibers, according to the Nike website.
“Performance matters,” said Stephen Lee, founding principal of Logan Capital Management. “There’s innovation in new products and they’re gaining market share.”
And that’s not just for women. Lee notes that Lululemon Athletica Inc. LULU, -0.21% has been gaining share with men, which he attributes to the performance and quality of the product.
Don’t miss: Lululemon Athletica customers pay full price, something other brands strive for
“[Nike is] adding to the roster of athletes where they can,” Lee said, noting that the technology in women’s merchandise seems further ahead than men’s, even on items like t-shirts. “Even baseline products seem to be more sophisticated.”
Nike shares are up 25.3% for 2018 so far, outpacing the Dow Jones Industrial Average DJIA, -0.54% , which is down 1.7% for the period.
