Blog MAR 27, 2013 #37 Making money through co-creation example 2 – Nike+
How did Nike increase market share from 47% in 2007 to 61% in 2009 in the US runner market? (A 3.6 billion dollar market)?
We’re doing a whole series of co-creative case studies here courtesy of “The Power of Co-Creation” . Venkat Ramaswamy who wrote the book was generous to give a lot of his time in the run up to a forthcoming article in idealog magazine. http://www.amazon.com/The-Power-Co-Creation-Productivity-Profits/dp/1439181047
This case study is a “oldie but a goodie”.
Customised Nike+platform
Background
- 2006 Nike employees noticed runners wearing earbuds on the Nike campus
- CEO Mark Parker “ Most runners were running with music already.We thought the real opportunity would come from combining music with data.”
Initiative from the customer viewpoint – better running everybody
- 2006 Nike plus build a shoe with built in wireless for iphone or ipod touch
- Voice-overs provided congratulations on completed runs from Lance Armstrong. (Clearly this is now a mute point).
- Nike plus provided a platform for runners to share music, runs in local cities, share running tips, sign up for Nike Running Club Events, find a ‘run’ for execs in a new city and issue challenges.
Co-creation benefits from Nike’s viewpoint – cost savings and deep insights
Nike + running shoe
- CEO Parker says that the initiative allowed direct meaningful engagement with customers resulting in the reduction of communication spend from 55% in 2006 to 33% in 2009
- Parker says “We’re not in the business of keeping media companies alive, we’re the business of connecting with customers…People run three times a week and we are right there with them”
- Parker “ In more ways than one the genius of the Nike plus system is the software that allows the generation of deep insights and facilitating social connections with a community of runners.”
Commercial outcomes – this learning fuelled the way for the Nike + Fuel Band which has seen a 18% rise in profits for the equipment division
- By 2009 150 million runs had been uploaded
- Nike had sold 1.3 million Nike + & iPod sports kits @ $29 US
- Market share rose from 47% to 61%.
Key Learning – They didn’t use Facebook they created a unique customised space that they could shape over time.
