Nike ensuring products are what customers want

www.wsj.com

The economic principle I’m exploring is how is Nike so effective when it comes to sales.

My research question to help me study the economic principle is how do companies tailor their items to their consumers likes?

The article published in Forbes titled “Nike Just Does It - Keeping An Eye On The Customer” demonstrates this economic principle by showing that Nike listens to what the customers want, tests the products on their professional athletes, and give customers instant feedback.

First, Nike makes sure they’re selling what the customers need and will use by monitoring them. Nike created a Nike+ app which allows people to track their own runs and compare them with their friends. You’d think this would just be beneficial for these runners but it actually benefits Nike as well, “Everyone gets added value: the customers get something that helps them with their fitness regime and helps them interact with friends, while Nike gets valuable information about how customers are using its products.” This allows Nike to see the trends of their customers and then tailor there products to there needs, listening to their reviews on things such as shoe complaints. In my opinion this is very effective, i'm not very likely to go online and just fill out a questionnaire about what I want in shoes, however I could see myself using this app which accomplished the same thing without the drag of having to do it.

Second, Nike ensures the quality of their products by testing them on their professional athletes first. They do this by “stay[ing] close to the needs of the professional athlete. We put sensors on their bodies and monitor how they perform with our product.” They can then analyse this data and see the pros and cons of the products they’re testing. That’s why you often see professional athletes wearing shoes before they’ve been released to the general public. I love that Nike does this because it creates hype around shoes seeing these athletes wearing them before anyone has them and it's also comforting to know that you're not going to spend money on shoes that will end up breaking.

Third, Nike does a great job of giving their customers instant feedback on the products. One of Nike’s greatest additions to their stores has been the “treadmills they have in Nike stores. Store employees run analyses as people test out shoes. They are then able to make specific shoe recommendations for the customer based on the data collected, like pronation, rotation and how the runner’s foot hits the ground.” This not only helps out the customer by figuring out which shoe is the best fit for them, but also gives data to Nike on what shoes tend to work best for their customers and produce more of those. 

In my next blog post I will research the question: What effect does store location have on Nike’s sales?