In the spotlight this week, we have Nike, Inc, an American multinational corporation that designs, develops, manufactures, and markets apparel, footwear, accessories, equipment, and services worldwide. Founded in 1964 as Blue Ribbon Sports, the company became Nike in 1971 after the Greek goddess of victory.
So, why did Nike become so successful? Here are 9 things we have identified that business owners can learn from them in this Nike case study:
Price skimming is a pricing strategy where you initially charge the highest price that your market will accept for your product, and then lower it over time. The logic behind this strategy is that you attempt to "skim" off the top market segment to which you appeal (aka early adopters) at the time when your product is freshest, thereby maximising your profit margins early on. Then dropping prices after that to attract more price-sensitive consumers.
Nike applies a price skimming type strategy whenever it produces new products. By implementing this strategy, Nike tries to skim money from the customers who want the product and are willing to purchase it at that price. After a newly designed product has been out in the market for a while, Nike lowers the price of those products. Normally, Nike shoes are sold at peak prices for a period of 3 to 6 months and after that period, there comes an activity called closeout where prices are reduced gradually.
This can be easily done with Konigle's Bulk Price Editor tool:
- Simply set the selling price of the product to the “After Launch Price” and the validity period to begin after launch period.
- Then make another pricing request and set selling price to “Before Launch Price” and ensure that valid to date is set as the end date of the launch period.
Nike creates scarcity and a sense of FOMO (Fear of missing out) with this “Limited Edition” + "New & Upcoming Drops” tactic. They pre-launch limited quantities of sneakers, which induces anticipation and buzz along with FOMO in consumers resulting in a boost in Nike's sales every time.
You can inform your subscribers of an upcoming launch with the Konigle's Bulk Price Editor tool by scheduling draft products to become active at a designated time then creating email + sms campaigns reach out to them.
According to a study, using charm pricing can increase sales by an average of 4% compared to using "rounded" price points. Figures ending in an odd number, such as five, seven, or nine, are said to sell better than others.
Want to implement Charm Pricing on your Shopify Store? Use Konigle's Charm Pricing Seller Tool and enable charm pricing on your store within 5 minutes.
On online stores, compare at price is the product’s original price that shows up on a product's listing when its on sale. Customers will see it crossed out next to its discounted price. This is an attractive way to help customers see the gap between the price now and then and how much they would be saving.
If you would like to add or edit Compare at prices, the Konigle's Bulk Price Editor tool can help you do it easily.
Here's a video on how to do it:
Exit intent pop ups can come across as annoying if not done well. But when they’re used at the right time, exit intent popups are an effective strategy for increasing revenue. These popups when used simultaneously with discount codes can boost conversions, reduce cart abandonment and bounce rates, and increase sales.
Here's how nike.com has implemented the exit intent pop up on their store:
You can notice here how they wait for a certain time for a visitor to browse their website before showing an exit intent pop up. There are only three things to fill out, and they’ve limited your choices so you can complete the form fast.
Nike has a dedicated Sales collection page on their website. This quickly highlights products being sold at a discount for bargain buyers. This is a good way to boost sales from people looking for an easy way to get discounted apparels.
They also have promotional descriptions added to each products on sale. This enables shoppers to know of other existing promotion and end up spending more.
If you would like to implement this on your Shopify Store, you can use Konigle's Bulk Price Editor tool to:
- Add tags on discounted products as you edit prices and show them on the Sales Collection Page.
- Add promotional descriptions before submitting price change requests
Here's a video on how you can use the Konigle Bulk Price Editor:
Nike's “Category Offence” Strategy is to identify what athletes are trying to accomplish and where they currently struggle. This shift to focus on sports and athletes rather than product categories has led to massive sales growth. Some of the new categories included Running, Global Football, Basketball, and Women’s Training.
The Nike membership program is a club where Nike customers and fans can receive exclusive perks. There are many benefits of the Nike loyalty scheme such as exclusive products, early access to product launches, special offers on birthdays and, to top it off, free delivery.
This is a successful loyalty strategy that many stores should learn as it creates a sense of exclusivity, community, personalisation in members. All these contributes and strengthens brand loyalty.
Wondering how you can steal this loyalty strategy? Do so by rewarding your loyal customers when you create customer based price rules with Konigle's Customer Based Pricing tool!
Find out how you can do it here.
With an elaborate sizing chart for all their products, this gives customers more trust in Nike's product as they will have a better idea of how the apparels will look like on themselves and hence more willing to purchase. This is a way to both reduce return requests and increase AOV. In addition, the elaborate sizing chart they provide caters to an international audience hence widening their customer base greatly.
