What Nike’s takeover of Zodiac, a nugget of predictive analytics, shows

by bold-lichterman

IN SHORT

  • Businesses need expert support to leverage the flow of data now available online, in apps and in stores
  • Nike has chosen to integrate in house a predictive analytics company
  • The objective is twofold: to extract most of all the data that the company collects as it launches connected products and experiences; and help Nike predict future purchases for its customers, and create personalized interactions that will drive those purchases.

What Nikes takeover of Zodiac a nugget of predictive analytics

IN DETAILS

The announcement did not make much noise in France, yet it is significant. Nike has just acquired its provider Zodiac Inc., a predictive analytics specialist created in Philadelphia by researchers and data scientists from Wharton and the University of Pennsylvania.

One way, in the wake of L’Oréal who bought ModiFace last March, to secure an exclusive collaboration with one of its service providers considered eminently important in the “Consumer Direct Offense” plan set up by Mark Parker, CEO of Nike. Zodiac had previously worked for other major American brands, missions that will stop. Another sign of the lockdown by Nike…: all the documents published in recent months by Zodiac on its site and its Linkedin account now point to the announcement of the takeover.

A takeover that takes place in a brand which, however, already knows data well. Point of view shared by Adweek which counted, on March 29, 300 vacancies at Nike listed under the keyword “data”!

In New York, during the presentation of Nike’s results at the end of March, Mark Parker described the takeover of Zodiac as follows: “ [•••] They help us have a deep understanding of customer value, and where the customer’s growth or potential is. [ •••] We’ve been working with Zodiac for several months using their proprietary algorithms and models and I would say we’re extremely excited about how we can make the most of these capabilities to accelerate some of the key pillars of our strategy. […] It is absolutely fundamental to fuel our strategy [… ] which is to be more personal “.

The plan “Consumer Direct Offense

The “Consumer Direct” plan launched in 2017 testifies to Nike’s desire to increase direct relations with its customers. The plan has already resulted in:

  • an internal reorganization leading to the creation of Nike Direct, a division that includes Nike.com, direct-to-consumer retail and Nike + digital products, in 12 cities around the world
  • an acceleration on two initiatives that allow Nike to acquire a high amount of data: its loyalty program Nike +, and Run Club.

This Plan seems to be bearing fruit: Nike which announced at the end of March 2018 world sales up 7% (to $ 9 billion) on Q3 2018 (fiscal) compared to last year.

Goals :

  • Calculate the Life Time Value client
  • Better communicate one-to-one with him by knowing his objectives and needs.

We are not very far from the Under Armor strategy and its dedicated mobile applications that allow it to collect data on the performance and sports habits of its connected customers, and thus better advise them, on the site, on the apps and in stores. (In 2015, Under Armor bought MyFitnessPal, an app dedicated to fitness and nutrition, downloaded at the time by 80 million users worldwide

Nike +, a loyalty program well in its time

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1605306986 704 What Nikes takeover of Zodiac a nugget of predictive analytics

Loyalty program or Personal shopper ? Both, no doubt. It’s all about the app. In addition to the benefits that can be found quite conventionally in a Loyalty Program (example: products reserved exclusively for members), the Nike + program, because it is controlled in the app, enriched with real personalization.

This is where Zodiac comes in.

Nike relies on the analysis of data on purchasing behavior, sports practices and on customer comments on Nike products to reward them for their commitment to the brand, by offering them customized products or services, offers partners, and articles Actually likely to please him.

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1605306987 777 What Nikes takeover of Zodiac a nugget of predictive analytics

In his app, the customer accesses a mini Nike store in which multiple advantages are offered to him according to his athlete profile.

Nothing is more personal than playing a sport. To each his own style, pace, performance objectives. The customer accesses a mini Nike store in his app in which multiple solutions are offered to him according to his athlete profile:

  • contact Nike experts on-demand for personalized recommendations
  • customize their articles, attend store events reserved for members and corresponding not only to their sport, but also to their level …
  • get recommended training sessions that take place close to home, based on their interests and sporting goals
  • access music, meditation podcasts corresponding to sports practice.

As Nike explains in a press release: “ The more you use Nike.com and the Nike apps, the better Nike can get to know you and serve you with offers and promotions tailored to your interests and goals.“.

Nike App at Retail… A dedicated store app

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1605306989 355 What Nikes takeover of Zodiac a nugget of predictive analytics

Nike will test a mobile app, a true companion for the customer in the store, which, if he wishes, makes him fully autonomous.

Is this the Amazon Go effect? Nike will test a mobile app, a true companion for the customer in the store, which, if he wishes, makes him fully autonomous. Its clientele – very connected – so ready. During the presentation of his results at the end of March, Mark Parker was very clear: “ We don’t believe that digital and physical work in silos. In fact, more and more they intersect and amplify with each other “. Continuing: ” The key point is the integration of physical and digital, something everyone is talking about of course. But you will see that this link between store and digital will be more and more present as we deploy new experiences in our own physical stores. The distinction will therefore fade and I think that one will complete the other ”.

Among the features of the app:

  • Autonomy and time saving in store – The customer is recognized when he enters the Nike store. They can scan a product for its availability in the store or surrounding stores, buy it and pay for it in the app without having to queue at a checkout.
  • Continuity Online> Store – The customer can reserve a product online and pick it up in store in a locker in order to try it on before buying it. The two pilot stores are in Portland, and in the beautiful open-air mall The Grove in Los Angeles.

Without going all the way to the full concept of an Amazon Go, Nike is picking up on some of the elements that one might expect will become mainstreamin commerce. Macy’s also generalizes mobile payment in the shelves.

Direct to Consumer

In New York, during the presentation of Nike’s results at the end of March, Mark Parker stressed the importance Nike places on apps: “I believe that digital and mobile applications will play an increasingly important role in the launch of some of our key innovations. Obviously, that’s how customers buy, and it’s where we focus our efforts when we launch our launches, and where we invest to serve our customers. I think you’ll see more and more storytelling starting in digital form, including premieres on our mobile app ”.

A test with Stitch Fix

While Under Armor chose to launch its own subscription service to a personalized box, Nike opted for the partnership. This spring, it will launch a similar pilot project in the United States, but relying on subscribers to Stitch Fix, the American leader in subscription style consulting. Nike will offer a line of Women products to Stitch Fix members. Always with the same idea: to rely on predictive factors to increase direct sales to consumers.

The correspondant :

All about Visual Research with The Home Depot Best BuyLaurence Faguer is a marketer and entrepreneur “go-between” France and USA, founder of Customer Insight.

At the request of French companies, she identifies in person innovations in Digital, Mobile and Retail in the United States, before they are known in France, then helps them to successfully transpose these successful strategies in the US

Laurence is US expert for FrenchWeb who resumes from time to time the publication of articles on her blog.