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Nike has created a ‘global playbook’ amid COVID-19: Nike Exec.

Nike Direct to Consumer President Heidi O'Neill joins Yahoo Finance Live to discuss how Nike has adjusted amid COVID-19.

Video Transcript

AKIKO FUJITA: Let's bring in Heidi O'Neil she's the president of direct to consumer at Nike, our very own Reggie Wade also joining in on the conversation. And Heidi, it's great to talk to you today. Just give me a sense of where you think Nike right now is in the recovery picture. Of course, direct-to-consumer has really been seeing a huge surge during the pandemic because so many people go shopping online. But when you look at the overall picture right now, where do you think things stand for Nike?

HEIDI O'NEILL: Sure. Well, we see a global playbook unfolding, essentially, where we are still in different stages around the world. In China, we're seeing a really strong recovery phase, where we have returned to growth. We have normalized inventories. Our stores are not only open, but our stores are demonstrating and generating growth over last year.

And so what we've been able to see at Nike is that we're creating a global playbook. And we're ready for react phase, if we hit a point in the pandemic where we need to close stores down and divert consumers to our amazing digital experiences. And we're ready for live operations to make sure we're serving online the way consumers want, with new convenient services. And then we're ready for that recovery, to make sure we open for consumers and our stores are safe with great new digital experiences, such as non-touch experiences and digital queuing, so when we come back to shopping, we're ready for consumers in a safe way.

REGGIE WADE: Heidi, it's Reggie Wade here. Nike has topped consensus estimates on revenues three out of the last four quarters. But does this company have room to grow? And if so, what areas do you see Nike growing in the next few quarters?

HEIDI O'NEILL: Well, first of all, we've just been hitting on digital. And we absolutely see our digital business is on fire. We grew 83% Q1.

One of our insights over the period of COVID is consumers' expectations and behaviors have fundamentally changed. And our consumer of February 2020 is not our consumer of today. And we have achieved our goal of 2023 digital penetration of 30% three years early. And we're on our path to a 50% penetration.

So first and foremost, Reggie, I'd say there's tons of potential. We're scratching the surface as it relates to digital. Beyond that, you and I have talked about our growth opportunities from a women's perspective, an apparel perspective, and I would actually say Jordan as well. We're investing quite a bit in our women's and our apparel product teams.

And we're also investing in our digital experiences, with from a women's perspective, we just launched our first maternity collection, the Nike M collection. We're going to be investing in Her from workout to a lifestyle perspective. We're going to be offering extended sizes for women. And then in all of our apparel products, just in Q1, our women's business grew 100%. And between women's and Jordan and apparel, we took over the number one position in apparel in the competitive US.

From an apparel perspective, we're all seeing the athleisure boom. I don't know what your day looks like, but I'm going from a Zoom to a Nike Training Club and back. And that creates an incredible opportunity for Nike as well. So we see apparel as a real focus area, from product all the way through the end-to-end consumer experience. We've just launched live streaming digitally, which is a great way to showcase product from an apparel perspective.

And finally, Jordan-- Jordan's on fire. Jordan grew last quarter in every single geography. And we've got-- we've got some great launches coming up this holiday. And we're really investing in growth from a Jordan perspective in apparel and women's as well.

REGGIE WADE: Heidi, I know Nike has recently changed relationships with some of its wholesale partners. Amazon, we spoke about that a few months ago. Is there still room for the mom-and-pop shops in the new direct-to-consumer world that Nike is building?

HEIDI O'NEILL: Without a doubt, Reggie. We see our future with partners big and small. And partners are a really important part of our digital and our overall marketplace ecosystem. And what we've said is that we-- with our consumer-direct offense, that we really want to be more direct, more personal, more connected. We are innovating store concepts.

And we're pivoting to differentiated retail. But that differentiated retail we see with partners of all sizes, and just partners who share our vision of a more connected, more elevated retail experience. And so with those partners, we're going to be investing in connected digital experiences and making sure together we never leave a consumer stranded without the swoosh from an inventory perspective.

And we're calling this future strategy One Nike Marketplace. And we see it as a really important consumer-centric move forward to make sure that our consumers, regardless of where they're shopping-- online or in stores, or with a partner or at Nike-- that they feel like a member at Nike. And we know them to serve them in a very personal way.

ZACK GUZMAN: And Heidi, I mean, Reggie knows this well. Back when we were in the office, I mean, I was trying to shop for those marathon shoes, finally got those through. But it seems like other competitors out there are now moving in the same direction. We saw Under Armour kind of announcing a similar direct-to-consumer shift, pulling their apparel out of some stores there. One, does that make you feel like you were already ahead of the curve in kind of making this move? And then two, how does that complicate or maybe make it a little bit more expensive to chase that consumer in terms of getting them to shop with Nike online versus some of your other competitors?

HEIDI O'NEILL: Sure. Well, you know, first of all, I believe we're ahead. And that is our goal, is while we see the world changing around of-- around us, we want to stay ahead of the state of play. And Nike will always have that aspiration.

From acquiring consumers and maintaining consumers, we actually see quite an efficiency play if we work together with our partners. There is waste in the digital marketplace. And we see the possibility of acquiring consumers together as a positive efficiency play. And then, of course, as we work down the funnel and serve them and know them better together with our partners, there is a significant growth potential as we work together to increase LTV for our consumers, wherever they're shopping.