Given that Nike virtually outsources all of its apparel manufacturing to third parties from multiple countries around the world — particularly China — various macroeconomic factors have been taking a toll on Nike’s core business. These struggles became public in Nike’s latest quarterly earnings report.
The war in Eastern Europe, scarcity of key raw materials, and forced COVID lockdowns in China have challenged Nike’s supply chains since the last quarter of 2021, slowing overall growth and affecting its business operations.
Nevertheless, that hasn’t stopped the Swoosh from expanding its business and scoring alternative revenues from other places.
A good digital transformation strategy relies on the brand’s ability to predict future changes in consumer behavior based on emerging tech trends, then evolve quickly to keep up with the market.
Nike has been more successful than most other big brands in the transition to the metaverse because it committed to the trend early, leveraged its brand identity to tap into the multibillion-dollar market, and partnered with critical experts in the metaverse to deliver top-quality virtual experiences.
The interoperability of metaverse elements — gaming, shopping, social media, entertainment, digital currencies — creates new business opportunities in a market that’s growing extremely fast.
Nike understands as well as any brand that people’s attention is shifting to digital. In 2018, it set a goal of generating 30% of revenues through Nike Digital by 2023 (currently 24%).
Nike may be purposefully obscuring much of its metaverse returns to avoid revealing useful information to competitors — but if its involvement in the metaverse continues to grow, it may need to share more details in future reports.
Want to learn more? Check out the full Nike report here.