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March 25, 2013

Nike Gears Up With News of How it Plans to Fuel(Band) Growth

by Mark J. Miller

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Nike introduced the FuelBand wristband in January 2012, and it has apparently sold well enough for the company to further invest in its growth as the device at the center of the connected universe it envisions. News on how Nike plans to boost its mobile/digital offering sets the stage for the company’s quarterly earnings call on Thursday.

The athletic-wear giant’s inaugural Nike Accelerator mobile development incubator, announced late last year, this week awarded $20,000 to 10 different startups that are building apps for its Nike+ products. The hope, CNET reports, is “to create a platform in much the same way that Apple has created a platform with iTunes and Microsoft with Windows.”

Hundreds of app ideas were proposed to Nike and its partner, TechStars, and the 10 that will receive funding as well as mentoring from Nike include “games that encourage users to exercise and a corporate wellness app that espouses healthy living habits,” CNET notes. The companies will work on their apps in Portland, Oregon, near Nike’s campus, and then pitch them to Nike bigwigs, venture capitalists and angel investors in June.

The FuelBand was set in motion back in 2009 when Nike VP of Digital Sport Stefan Olander and his staff got excited about the idea at a staff meeting. While Nike targets plenty of its products at serious athletes, it was hoping that FuelBand, which went through hundreds of prototypes such as the one above before finally becoming real, would be attractive to the masses.

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According to a press release, FuelBand was partially inspired by Nike co-founder Bill Bowerman’s statement, “If you have a body, you are an athlete.” The design, however, was partially inspired by the “thick, terry wristbands worn by the tennis greats of the ’70s.” Whatever the retro inspiration, Fast Company last month gave Nike its future-forward Most Innovative Company award as a result of the game-changing device.

Will that innovation pay off? CNBC notes that Nike’s third-quarter income “is expected to be down, despite higher revenue, as the world’s largest athletic shoe and clothing company sees its North American strength offset by weakness in Western Europe and slower sales growth in China.” What has helped the company is its basketball shoes and NFL gear in North America.

Something that is likely to help the Nike brand in England, anyway, is that the men’s and women’s national soccer teams are about to start wearing Nike gear after more than 50 years of wearing Umbro. That’s what “a contract believed to be worth over £20m ($30.3 million) a year,” according to the Guardian, will do.

Something that inevitably comes up in earnings calls these days is what companies are doing to save the planet, and Nike Inc. has long been committed to sustainability. The company just announced that it is partnering with “Swiss company bluesign technologies to accelerate the supply of sustainable materials and chemistries for use in NIKE, Inc. products.” This will help Nike’s massive supply chain be more aware of the sustainable products available to them in the production process. It will also allow Nike to “begin using (its) tools to analyze more than 800 factories in about 50 countries,” SustainableBusinessOregon.com reports.

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While the company’s environmental efforts are the cause of some pride, there is another subject that once brought embarrassment: its association with Tiger Woods. Through all the revelations of the famed golfer’s many sexual partners and marriage troubles, Nike stood by their man and now have introduced his 2013 Collection, which addresses two areas that have been “distraction points” throughout Woods’ career, according to Kim Kenney, design director for Nike Golf.

“Tiger was typically adjusting his sleeves before he addressed the ball, moving the garment’s shoulder seam back as a way to mark his golf stance,” she said, according to a company release. “Then after he followed through, he had to adjust and pull his sleeves back to the original position.” So the company addressed these issues. One hopes, now that Woods is publicly dating famed skier Lindsay Vonn, that he has addressed his own history with other distractions as well.

Speaking of distractions, plenty of basketball fans this week haven’t spent a whole lot of time paying attention to earnings calls or anything else as the NCAA’s March Madness is suddenly thrust upon American culture. Nike or subsidiary Jordan Brand have outfitted 14 of the last 16 men’s champions and 50 of 64 Final Four teams and has its duds on 52 of the 68 teams in the Big Show this year, but Adidas may give it a run for its money this year as it outfits two of the No. 1 seeds, Louisville and Kansas.

What surely won’t come up during the call will be any information on where Nike plans to expand to next in Oregon, “but an engineering company’s report offers a hint that something big is planned on 28 acres west of Nike’s World Headquarters campus,” according to the Oregonian. A water survey was done on the land in October for Project Impact, which is Nike’s code name for its planned expansion.

Via Brand Channel

posted by: Limité Staff
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