“When you are finished changing, you are finished,” founding father Benjamin Franklin said long before being immortalized on the $100 bill.
Two hundred years later, Nike’s newly released sustainability and carbon footprint reduction strategy appears to be embracing that sentiment.
“We’re changing our approach,” the athletic footwear and apparel giant’s Chief Sustainability Officer Noel Kinder blogged last week, as he outlined a sweeping raft of 5-year targets designed to bring clarity, precision and accountability to a global enterprise that did $37 billion in revenue last year.
“Across the company, our teams are pulling together with surgical focus on our biggest challenges — and our biggest opportunities: sustainable materials, renewable energy, and energy efficiency,” Kinder said. “All across Nike, we’re raising the bar for accountability with annual benchmarks; quarterly scorecards; and for the first time, executive compensation tied to our progress.”
A Material World
At the heart of Nike’s makeover are materials, which the company says account for 70 percent of its carbon footprint, and are at the foot of its push to accelerate research and development around sustainable materials and finding low-carbon alternatives to market at scale.
One such revision is the just-launched Nike Refurbished program, an unprecedented re-think of recycling by a company that survives on creating the hot new thing.
“[The Refurbished program] extends the life of eligible products by taking like-new, gently worn, and slightly imperfect kicks, refurbishing them by hand, and offering them to you at select Nike [locations and stores],” the company said, while outlining the four-step process that will pave the way for its entry into the secondhand — or circular — shoe business.
“Nike Refurbish is limited to reselling merchandise returned by consumers within its 60-day return window that is either new, lightly used, or irregular. It is also likely that this could be a more profitable way for Nike to resell returned merchandise that it might have previously disposed of through other channels,” Telsey Advisory Senior Research Analyst Cristina Fernandez said in an email to PYMNTS. “The initiative is starting small at just 15 factory stores, but we expect it to scale over time to include more stores and products,” she added.
Under the program, customers return shoes, which are then inspected and graded by Nike experts; if they qualify for resale they are cleaned and sanitized then returned to stores and sold at a reduced price.
Reebok’s Rap Rebound
For a brand that is essentially seen as discontinued in the eyes of its owner Adidas, Reebok appears unprepared to quietly disappear and has just announced a “head to toe” product line with rap artist Cardi B that will drop April 23 — its third and largest collaboration with the singer in six months after two previous sell-out offerings.
Dubbed the “Summertime Fine Collection” the latest “Reebok x Cardi B” collaboration marks a major move to refresh the image and reputation of the iconic 90s workout shoemaker, and give it some badly needed ‘street cred’ within the current sneakerhead and athleisure space.
“Today’s consumer is not down with BS. They see through brands,” said Reebok Product Manager Molly Kazarian. “With the Cardi B shoe collection, it’s clear she didn’t do it for a check. After collaborating with her, we ultimately just let her be herself” adding that every single hue and piece of fabric was hand-selected by the singer.
In addition, Reebok said the campaign and apparel line is designed to be accessible to a wide audience of fans via everything from extended and inclusive sizing to price point to styles for adults and kids.
“Bottom line,” Reebok said, “There’s a shoe and fashion option for everyone here.”
Lifestyle, Fashion And Feet
Whether it’s Reebok, Nike or other footwear and apparel makers, the same broad trends are driving decision making: rising consumer demand for the athleisure lifestyle and increased uptake of at-home fitness.
“With the loss of the commute, people are also filling newly found time with exercise regimes or hobbies,” Euromonitor International wrote in a December trend analysis report. “As a result, consumers are investing in clothing for their new pastimes [and] dominant players like Lululemon, Gap’s Athleta and Nike have reported stronger sales than other apparel retailers during the pandemic.”
What happens after the pandemic, however, remains less clear, as consumers appear split over the permanence of this fashion shift versus some degree of reversion to pre-crisis styles and choices.
“COVID-19 has been a wake-up call about inequality and inclusion, bringing people closer together. Consumers are increasingly seeking brands with purpose and meaning,” Euromonitor said.
D2C Vs. Physical Stores
While the footwear design and manufacturing processes undergo updates, so too are the actual merchandising methods as is notable in the embrace by brands like Nike, Croc’s and Adidas to limit retail outlets while increasing direct to consumer (D2C) sales and other loyalty-linked efforts.
Bucking that trend, however, is 250-year-old German sandal maker Birkenstock, which was just acquired by the LVMH investment arm L Catterton and six weeks ago announced plans last week to open what will be only its third U.S. physical retail location in the super-trendy section of Brooklyn.
“Williamsburg, Brooklyn is the perfect neighbourhood to celebrate and interact with our brand fans in the area. It is a vibrant place unlike any other and serves a new generation of families and urban creatives,” David Kahan, CEO of Birkenstock Americas said in a statement.
Like Reebok and other footwear rivals, Birkenstock is not stopping with its new store and will go well beyond sandals by carrying a growing range of products for women, men and kids, including shoes, boots, socks, skin care as well as a curated selection of limited-edition designer collaboration styles the company said.
“Overall, demand for athletic footwear in the US remains strong as consumers gravitate toward more casual looks and have extra cash due to the government stimulus payments,” Fernandez said, noting that the biggest challenge for the industry right now is supply chain disruptions and the constraints they are placing on inventory availability.