Sportswear giant Nike is making significant strides in its digital business, with a current share of 26% this year, up from 10% in 2019. The company remains on track to achieve its target of becoming a 40% digital business by 2025, according to Nike CEO John Donahoe during a call with investors while announcing the full-year 2023 results on May 29.

Donahoe attributed the growth of Nike’s digital business to its loyalty program, emphasizing the company’s focus on understanding its consumers better and using data-driven insights to serve them effectively. He stated that the past year witnessed an expansion of Nike’s membership base, but more importantly, the company has successfully deepened its relationships with consumers.

“Our members now engage with us more frequently, buy more, and are more loyal to our brands. Once members join our ecosystem, they are increasing their lifelong sport journeys with us,” said Donahoe.

In addition to the digital push, Nike also revealed its intention to move away from a highly promotional environment this year. Donahoe emphasized the company’s aim to recover a higher level of full-price growth and achieve profitable growth in fiscal year 2024. He acknowledged the challenges posed by a culture of promotions, expressing appreciation for the efforts of Nike’s strategic partners in balancing investments in consumer connections, enhancing the retail environment, and managing inventory.

“While we feel great about where we are, we recognize that next year, the environment is going to continue to be promotional, putting pressure on our wholesale partners in terms of how they navigate the first half of the year,” explained Donahoe.

These strategic shifts are expected to contribute to improved margins for Nike, as the company focuses on profitability recovery moving forward.

Despite some challenges, Nike reported lackluster profit growth of 4% for the full year ending on May 31, with a total of $22.3 billion (£17.6 billion), up from $21.5 billion (£16.9 billion) the previous year. However, the company’s revenues showed a more positive trend, increasing by 10% for the year to reach $51.2 billion (£40.4 billion), compared to $46.7 billion (£36.8 billion) in the previous year.

Nike’s commitment to expanding its digital business and prioritizing profitability signals its determination to adapt to an evolving market. With a strong emphasis on data-driven insights and enhancing consumer relationships, the company is positioning itself for continued success in the ever-changing retail landscape.