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Why Nike CEO Calls COVID-19 Crisis a ‘Catalyzing Moment’

Months into the global coronavirus pandemic that rocked Asia before spreading across the globe, Nike is seeing shoppers return, slowly but surely, in China and some of its neighbors.

All of Nike’s owned stores and more than 95 percent of partner-operated locations are open in Greater China and South Korea, the company said, though some are keeping abbreviated schedules.

Although store traffic in the region remains below last year’s levels, higher conversion rates coupled with an uptick in digital demand are helping to offset the brick-and-mortar losses.

“We are encouraged by the recovery we are seeing in Greater China and South Korea as we continue to deepen our connection to consumers,” Nike president and CEO John Donahoe said. “Even more so, consumers around the world are recognizing the need for an active and healthy lifestyle and sport is now more meaningful than ever.”

Outside of China and South Korea, “the vast majority” of Nike stores and those of its wholesale partners have been closed since mid-March. As a result, Nike is shipping less product, driving significantly lower wholesale revenue and causing inventory to pile up, the company said.

“We continue to expect this to have a material impact on our Nike Direct and wholesale operations in North America, EMEA and APLA in the fourth quarter,” Nike added.

Nike’s digital ecosystem has emerged as a top priority amid robust member acquisition and increased digital demand, traffic and engagement internationally.

Earlier this month, Nike give its popular app and website a bilingual upgrade, part of an effort to connect more deeply with the Spanish-speaking U.S. population and especially while homebound consumers spend more time on their digital devices.

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“We have such a strong connection to our Latinx communities, and we want to make sure that they continue to feel that in their experiences across our digital channels,” said Nicole Otto, vice president/general manager of Nike Direct North America.

“This is the first step in our journey to bring better Latinx representation into Nike’s full ecosystem of sport and wellness,” she added, “from their experience shopping for Nike products online to the at-home workouts and wellness tips we offer through our Nike trainers.”

Beyond strengthening digital ties with the Latinx community, Nike has also bolstered its e-commerce fulfillment operations to serve growing numbers of online shoppers and offset the overall lack of brick-and-mortar activity.

However, stores have begun to open gradually and states and countries loosen lockdowns, Nike said, including in Brazil, France, Germany, the Netherlands and the United States. By region, 40 percent of Nike stores in EMEA are open, followed by 15 percent in APLA and 5 percent in North America.

Following what is by now a familiar playbook for reopening retail, Nike said stores now require  associates to wear company-provided face coverings and feature social-distancing signage and protocols to reduce density. Both stores and products are cleaned and sanitized more frequently, while distribution centers have implemented similar cleaning and six-foot-distancing guidelines as well.

Citing Nike’s digital prowess and robust financial resources, Donahoe believes the coronavirus crisis “will be a catalyzing moment that strengthens Nike’s long-term future.”