Cool-looking shoes garner most of the attention when it comes to sneaker innovation, but Nike has nabbed Fast Company’s 2019 Design Company of the Year award for something else: a savvy retail strategy that blends analog stores and digital platforms to drive its business forward. At Nike’s House of Innovation store in New York, mannequins are fitted with QR codes so phones can identify each item on display, and reservable lockers are stocked with new shoes in your size if you’ve ordered in advance. Last year, Nike invested more than $1 billion in new capabilities and consumer concepts. Today, 170 million people are part of Nike Plus—the digital loyalty program behind Nike’s retail and fitness apps. After admitting in 2018 that the shoe industry still lags behind most others in digital retail, Nike grew its digital business 35% in the last fiscal year and had its first billion-dollar digital quarter this year. According to CEO Mark Parker, digital commerce will generate at least 30% of Nike’s revenue by 2023. Here, he tells Fast Company about the company’s evolving strategy for connecting with customers—and why this sometimes requires taking a stand in today’s increasingly partisan world.
Fast Company: What’s the biggest change you’ve seen in retail during your 13 years as Nike’s CEO?
Mark Parker: Retail has really become more of a two-way dialogue. Instead of just selling products, we’re actually interacting, communicating, gaining knowledge, and then using that to create even richer experiences. The speed at which we do that, it’s always been there on the product side. But we’re applying that to the whole consumer experience, whether it’s on mobile or in a large-scale showcase-format store like Nike House of Innovation.
FC: How does something like Nike Fit, which is an app that scans your foot to size your shoe, sit within this retail model?
MP: Half the population is in footwear that is the wrong size. This scanning technology allows us to go right from measurements on the foot to an accurate sizing in the store. It’s those types of things that we’re trying to use to allow the consumer to spend more time with our experts in the store going deeper [than sizing], getting more information on the product, [enabling us to know] what they need and what we have to best meet those needs.
FC: How would you describe the role of design at Nike?
MP: Design is an incredibly critical differentiator for any brand. I think you’ve got to move more quickly in terms of the innovation cycle, and it’s about presenting something that’s meaningful to people, relevant and unexpected. But our focus has always been on the athlete. What do they need to perform at the highest level? That drives a lot of the innovation at the company. And that innovation takes on different forms, different looks. The aesthetic, obviously, is very important, as well as the function. But we’ve tended [toward] function-based innovation that drives a new aesthetic. People may not be drawn to the function. They may be drawn to the aesthetic. But the aesthetic is based on function and performance. And I think that’s always been our touchstone.
FC: It’s not just function driving Nike’s design, though. The women’s soccer kits that Nike recently designed for the World Cup seem like examples of design emanating from social awareness. Each team had a design that meant something to its members. The Australian team, for instance, had a jersey that almost looked spray-painted, as a nod to Melbourne’s graffiti culture in the ’90s.
MP: We’ve always drawn from a huge spectrum of sources for design inspiration. Certainly, when you’re designing a national team kit, you’re looking at the history and heritage of a nation. Those are incredible bits of inspiration. But we’re layering that on top of a fixation and obsession with fit, form, and function, and it’s also a part of the storytelling of the product. I think really good design speaks to you. It tells a story. We can obviously amplify that through communications and merchandising and how we display and think about product online, in store, and then certainly on the fields of play in competition. But as a designer, you’re always looking for relevant bits and pieces of inspiration that drive meaningful design and tell a compelling story.
FC: Nike released an Air Max shoe featuring a 13-star colonial-era American flag that prompted criticism because the imagery had been co-opted by the alt-right. So you pulled it. How do you think about the social consequences of a product?
MP: [They’re] important, particularly in a world that’s become polarized in many ways, amplified by social media. It’s a more sensitive environment. So there are occasions when we’ve decided to pull our product and services from the market. The decision [regarding] that Air Max product was based on concerns that it could unintentionally offend and detract from the Fourth of July holiday. That’s the reason we pulled it, not to create a source of polarization. We make those decisions, sometimes. They’re rare, but it does happen. We’re trying not to offend.
FC: But Nike doesn’t seem to avoid tough conversations. The company has delved head-on into them, such as aligning itself with figures in the sporting world who are outspoken about inclusivity, including Colin Kaepernick, Serena Williams, and Megan Rapinoe—and Nike has been criticized for this. It seems like you are choosing sides, actively and openly, as part of your identity.
MP: There are values that are important to the brand and the company that we’re not going to shy away from. We support the views of our employees, our athletes. And yeah, we will put a stake in the ground and take a stand. I don’t want to suggest that we don’t. I think it’s probably pretty obvious that we do, and that’s a part of who we are as a company.
FC: And you take it on the chin from both left and right.
MP: That’s not a reason not to have a voice. It’s important for me personally, but also for the company, to stand for some values. We don’t shy away from that.
A version of this article appeared in the October 2019 issue of Fast Company magazine.