Nike Collaborates with Stitch Fix to Heighten Consumer Experiences

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Photo credit: Nike

Digital innovation is a top priority for Nike and the company is expanding its partnerships with digital purveyors to take consumer experiences to the next level.

In an earnings conference call on Thursday, Nike chief executive officer Mark Parker told analysts that this spring, the company will run a pilot with Stitch Fix, a digital personal styling service, and extend its pilot project with Amazon. Working with Stitch Fix will enable Nike to bring personalized women’s apparel to Stitch Fix’s diverse consumer demographic, while the Amazon partnership will help Nike reach more consumers online.

“On the commerce side, our digital footprint continues to scale to hundreds of millions through new partnerships,” Parker said in the call. “Our strategy is to partner with platforms that advance our brand, as well as our business through presentation, pricing and consumer data to support our membership efforts.”

Parker told analysts that the Amazon pilot has “gone well” and that both companies will use digital innovations, including data, to tap into consumers’ fashion preferences and deliver on their expectations for clothing that will suit their unique lifestyles.

“We’ve seen good sell-through on the limited selection of products that we have offered,” Parker added. “The important part is that we advance the brand through better presentation and then the sharing of data so we can better serve consumers. I think that’s really what we’re driving for behind the Amazon relationship.”

Nike’s collaborations with Amazon and Stitch Fix reflect its ongoing mission to heighten consumer experiences through digital innovation. By partnering with these digital purveyors, Nike can establish a future where consumers can seamlessly communicate with the retailer through digitally connected devices—including smartphones and wearables—to provide information on the products they want. In return, Nike can use this data to inform consumers on its design, distribution and manufacturing operations, and tailor them to consumers’ styling needs moving forward.

[Read more about strategic partnerships: Luxury Outerwear Goes Fashion-Forward With New Brand Partnerships]

While Nike seeks to expand its consumer reach online, these digital purveyors, including Stitch Fix, have grown their revenues and consumer reach over the past year. By tapping brands like Nike, Amazon and Stitch Fix can strengthen their apparel offerings, which are critical for reaching more consumers that want more personalized performance clothing.

Business Insider reported that in the first quarter ended Oct. 28, Stitch Fix experienced revenue growth—increasing revenue by 25 percent year-over-year to roughly $300 million, while its consumer base went up 30 percent year-over-year to 2.4 million at the end of the first quarter. Despite this growth, the company’s net income was only $13.5 million, a two percent increase compared to last year. Business Insider indicated that partnering with brands, including Nike, may help the company fortify its product assortment and also reach more consumers through personalized styling.

Nike’s partnership expansions come on the heels of its recent financial results. For the second quarter ended Nov. 30, Nike reported that revenues increased 5 percent to $8.6 billion, and was up 3 percent on currency neutral basis. Revenues for the Nike Brand alone were $8.1 billion—a 4 percent increase primarily driven by growth in the Nike Basketball and Sportswear categories. Additionally, Nike said it will continue to use digital innovation to boost its partnerships and reach more consumers in the years ahead.

“We’re seeing great results early on from those experiences that are better serving consumers and giving them more of what they want, leveraging digital and in a more personally oriented service environment,” Parker added.

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