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Nike is deepening its relationship with Dick’s Sporting Goods, one of its leading retail partners, even as the brand has cut ties with many other stores.
The two companies announced Wednesday that Dick’s shoppers will be able to link their Nike purchases to their memberships accounts and access members-only perks, like apparel collections and in-store events. The tie-up is expected to later allow Dick’s shoppers to return Nike merchandise bought online directly from the brand in its stores, according to CNBC.
The partnership shows Nike is still pushing forward with the strategy it first announced in 2017, designed to prioritize a select few of its wholesale partners and radically increase its distribution through direct channels. The membership program has been key to that effort, serving as a tool to keep Nike customers engaged and shopping. Nike members are more likely to shop directly from the company, the company has said, and have higher lifetime values.
The strategy was especially fruitful since the start of the pandemic. Revenue jumped 19 percent year-over-year in the year ending May 2021, and direct to consumer sales increased by 32 percent in the same period.
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Dick’s was not highlighted as one of Nike’s most important retailers back in 2017 — Foot Locker, Zalando, Amazon and Nordstrom were named as among the 40 retailers that would remain as partners after the culling that saw mom and pop stores and chains like Urban Outfitters cut out. But the sports and fitness retailer has emerged as one of Nike’s most important partners post-pandemic, during which sales of sporting goods soared. Dick’s saw sales increase 9.5 percent in 2020, during which it generated positive headlines for services like curbside pickup and the decision of its chief executive and president to forgo salaries for a period. Nike is Dick’s largest vendor, representing about 20 percent of merchandise in recent years, and now more than double that of any other brand it carries.
Unlike most of Nike’s other key retail partners, Dick’s is a go-to destination for a wide range of sporting goods and team sports supplies that have resurged with the return of in-person school. Nike is focused on partnering with retailers that can help it connect to segments of customers it can’t reach as easily on its own, like shoppers of cleats and baseball mitts, said Williams Trading analyst Sam Poser.
“[Dick’s] can sell Nike baseball, football, soccer — the team sports business,” he said. “It’s not the fashion sneaker business.”
Nike is also attracted to Dick’s investment in physical retail, which saw sales increase 39 percent in the most recent quarter compared to the same period in 2019. Dick’s has also opened the first of a series of specialty “House of Sports” concept stores in recent months and is planning other launches and renovations to turn its stores into experiential destinations around different sports themes and product categories, like climbing and footwear. It counted more than 850 locations in total as of January 2021.
Foot Locker, which saw sales decrease by 5.7 percent in 2020 to $7.5 billion, announced a similar in-store membership tie-up with Nike in 2019 when the sneaker retailer said its customers could check out in its stores with the Nike app.
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