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Nike’s Strategic Use Of Technology Is Boosting Sales & Customer Relationships

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Nike’s efforts in leveraging technology are paying off with digital sales growing 42 percent in the first quarter of the current fiscal year.

The developments are part of Nike’s “Consumer Direct Offense” initiative, launched two years ago, aimed at garnering more sales at its own stores with tech at its center without relying on other retailers.

NikePlus

A company app, NikePlus, is key to the program, connecting shoppers not only to Nike stores but to fellow-fitness conscious shoppers through Nike programs that provide training plans. 

NikePlus allows the company to better know what interests existing and potential customers, as well as their shopping patterns, to sell them more. 

Nike’s newest flagship stores in Tokyo and Long Beach, California, leverage the app to bring more sales. 

The app now has 185 million members and offers many benefits, some being store-specific such as allowing members at the Tokyo store to get access to a digital vending machine.

Around half of Nike’s digital revenue growth was brought in by members using the app. 

According to Heidi O’Neill, president of Nike Direct, 70 percent of purchases made at recently opened stores were by members. 

SNKRS

Nike will also use the blueprint of the success of SNKRS, its app for the sneaker obsessed, and apply it to a broader group of consumers.

SNKRS is the company’s main channel for high-demand, limited-release offerings, where the sneaker-obsessed members unlock exclusive products. The app also served as a venue for members to showcase themselves wearing Nikes.

Ron Faris, Nike vice president of Global SNKRS App, shared that when people began to see the most-engaged SNKRS users, it lured them to be a part of the community, too.

In the last fiscal year, Nike took in $11.8 billion from its own stores and website, persuading it to reduce its reliance on other retailers in specific locations. 

It recently ended a two-year pilot of selling its merchandise on Amazon.com, but started a partnership with Chinese e-commerce giant Alibaba and sold briskly on the retailer’s annual event called “Singles Day.”

O’Neill emphasized that for the brick-and-mortar model to work, they need a lift from technology to draw customers’ interest. She plans to add more full-service stores on top of the 29 stores in the United States. The company also has 57 elsewhere in addition to its countless outlet stores. 

Another area where Nike is effectively utilizing technology is through Nike Fit, which uses scanning to helps its consumers get the best fit for footwear on mobile or in a store.

Nike Fit utilizes artificial intelligence, data science, computer vision, machine learning, artificial intelligence, and algorithms to solve what it claims to be “one of the industry’s biggest challenges.”

O’Neill noted that at any given time, 60 percent of people are using the wrong size shoe, adding that Nike Fit will be expanding from a service perspective to other product types in 2020 to “continue to solve the fit challenge for consumers.”

Other plans of the company include launching the third house of innovation store in Paris in the spring of 2020. 

Current Nike innovation stores are in New York City and Shanghai.

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How To Nurture & Grow Your Business In 2020

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Do you know that growing a business is much like losing weight? Yes, it’s that difficult but it’s also that much rewarding. See it like this, when you start your business, just as with trying to lose weight, you have a lot of focus and many goals. You start off really strong. However, as you go along, you experience frustration because of the challenging process. Then comes a plateau where you go back to old habits. Soon enough, when you don’t meet your goals, you panic and lose focus altogether. 

Don’t wait for a magic pill – both for your business and losing weight – because there isn’t any. What you need is a systematic process that will make it easier for you to identify the cracks in the system. You can then create the pathways where you can progress. With informed decisions, you can take more aggressive steps so you can achieve bigger successes. Here are the key steps on how you can nurture and grow your business this year. 

Make Honest Assessments

As an entrepreneur, you need to focus your energy on getting nearer to achieving your primary goals. To do this, you should first outline what your biggest priorities are as well as the impact that you expect from them. After that, assess where you are spending much of your time on. 

Are you working on projects that truly align with these primary goals that you’ve set? If you can examine this part honestly, you’ll be able to see where things are not aligned. You can then begin to build a more effective strategy. 

Work on Your Strengths

Too often, when entrepreneurs assess their businesses, they look at the weak points. However, it may not always be in the best interest of the company to do this. What you can do instead is to look at where you’re great at. What are the opportunities for growth on the parts that you’re succeeding? 

While it may be tempting to focus on getting new clients, you can focus on the clients that you already have. This may be where the future growth of your business lies. So, don’t spend all of your time, effort, and resources on client acquisition. Instead, work on deepening your relationships with your current customers. 

Take Risks

It may be tempting to be on the safe side and try to avoid failure as much as possible. This move is a logical one and many entrepreneurs prefer to take this route. It’s hard to keep a business afloat with failure being highly likely. 

But instead of being governed by fear, change your perspective. Whether you take risks or play it say, the odds are still going to be against you. So, make the move and take bigger risks. You’ll find that the odds are not any worse really. But the rewards you may gain can be exponentially higher. 

Strike the balance between being a risk-taker and being financially responsible. Trust your gut while examining all the available data that you have to make an informed decision. It’s the best way that you can create avenues for success in your business. 

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Customer

Year In Search 2019: Google Guide’s Top Travel Trends

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Thanks to the internet, traveling has never been easier. Whether you’re listing down your top travel destination or looking out for the next place to visit, you can have all your options with just one click of a search button. 

In fact, the world’s leading search engine has released its most searched travel destination for 2019. Google’s algorithm works by identifying the changes in travel searches every year. In this way, they were able to identify the top trending destination. 

So what made it into the top five trending places for this year? 

  • Maldives

What makes the Maldives so enticing is that it gives you a sense of sweet escape. Whether you might want to run off and trade cold winters for a warm and sunny holiday or simply looking for a place to get away from stress, this small Asian nation is known for its relaxed tropical vibe. A trip to the island is about being able to take a step back and enjoy the calm and serenity of its azure waters and white sandy beaches. 

However, the island’s warm and peaceful vibe might not come as cheap. In fact, a night at the Conrad Maldives Rangali which boasts the world’s first over-water villa and underwater bedroom can cost as much $38,000. Even its low-season bed and breakfast daily rate would be around $10,000- making it pretty much a steal. 

For this year, the top searches in terms of accommodation go to the Kudadoo Maldives and Waldorf Astoria Maldives Ithaafushi. 

  • Japan

Whether you might be looking for a gastronomic journey in Tokyo or exploring its soft side with street-filled cherry blossoms and quiet temples, Japan is surely gaining a lot of attraction. 

In fact, the United Nations World Tourism Organization has announced last September that the country hosts the second-highest growth in international tourism receipts. 

  • Bora-Bora 

If you’re looking to swim with sharks, rays and an occasional whale sighting, Bora-bora should top off the list. Known for its beautiful diving spots, the French Polynesian island sits on the heart of an extinct volcano known as Mt Otemanu.

Indeed, the island had sprung back from the drop of tourist arrivals in the early 2000s. With its sudden tourism boom, prices for accommodation can range between luxury rooms at $1,000 to grass-thatched villas at $300 dollars a night. Plus if you feel more like exploring the island, you can also hop on a cruise aboard Paul Gaugin, a vessel named after the iconic artist. 

On the other hand, most searches include “all-inclusive” resorts, while Four Seasons and St. Regis tops off the list of the most searched hotel. 

  • Las Vegas

While the desert city is known for its bright lights, crazy performances, wild clubs, and pre-wedding mayhem, it actually attracts a more diverse group of people. Whether it might be young families or a group of friends out for an unforgettable bachelorette party, the city attracts both saints and sinners. 

Oftentimes, most people would search for hotels, flights, shows, and even Craiglist listing (just proceed with utmost caution). 

  • Mexico 

With its tequila tours and delicious food, Mexico is not one of the most widely searched destinations for Americans, it is also the one they are most likely to head off to. And why not? 

It’s close and offers a warm tropical alternative to the cold winters in the U.S.-plus didn’t we mention its also relatively cheap? What’ even more surprising is that a lot of Americans are also settling into the city, as the U.S embassy notes that 1.5 million American citizens have chosen to live there. 

Based on the searches, Google says that more people are interested to fly over international shores. These searches might not be far from reality, with the increasing number of passport holders- surely the tourism industry might expect a busy year ahead. 

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With The Rise Of Online Food Delivery, Are Restaurants Flinching?

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In a 2011 Cornell survey of 372 U.S. restaurant operators, less than 10% of takeout or delivery orders were shown to be done online. Technomic said that this makes third-party delivery aggregators, like DoorDash and Uber Eats, scale the size of the fifth-largest U.S. restaurant chain, with $10.2 billion-worth of ordered meals in 2018.

Restaurant consultancy Aaron Allen & Associates CEO Aaron Allen said, “The consumer migrated towards having this expectation of things being at our fingertips, from other industries — the Amazon effect, you could argue, contributed to some of this.”

Restaurant chains like McDonald’s, Starbucks, and Chipotle Mexican Grill are among those who have already partnered with delivery services to adapt to the foodservice game’s change in the landscape. However, for some, this also means that the extra sales made from delivery also hint lower profit margins and major operational changes. This is evident in cases like Chipotle’s wherein second kitchen lines were added to locations in 2016 to manage and speed up the service of online orders. Increased delivery costs then sprung up in Chipotle’s profits during the third quarter.

 “We see this a lot more in the sophisticated restaurant chains that are beginning to really embrace off-premise and delivery,” claimed Trevor Boomstra, director of AlixPartners’ restaurants, leisure and hospitality practice. “They’re adapting their physical presence and their layouts.”

This food delivery trend was given birth to by startup aggregators partnering with independent restaurants. These were Postmates in 2011, DoorDash in Palo Alto, California two years later, and Uber, in 2014. The game-changer, according to Technomic principal Melissa Wilson, was the exclusive partnership of the largest U.S. restaurant chain by sales, McDonald’s, with Uber Eats in 2017 to offer delivery. This, though, wasn’t a very good arrangement for its U.S. franchisees as complaints about the high delivery fees per order surfaced, entailing 15% to 30% charge on every restaurant-fulfilled order. In part, commission fees have been decreasing due to competition.

This year, McDonald’s’ renegotiated Uber-Eats-contract reported a push for lower commission fees and an end to its exclusivity. Its partnership with DoorDash and GrubHub was later reported, and a forecast of its $4 billion global delivery sales launched in 2019.

This intensity in the delivery market has put Chinese restaurants and pizzerias – the two types of eateries that typically offer delivery services for their food – at a competitive space. Domino’s, for example, bet that the business models of delivery providers are short-lived, with GrubHub reporting its $1 million third-quarter net income, down from $23 million last year.

GrubHub, the only profitable delivery provider, has a stock market value of $3.7 billion – up 17% since its public entrance in 2014. In 2017, it hit an all-time high trade with $149.35 a share, although its about-$40 per share now sounds devastating.

Delivery apps DoorDash, GrubHub, and Postmates are still looking to go public next year, even with such questionable profitability and crackdown possibilities, zero in on The District of Columbia’s lawsuit against DoorDash for its former tipping policy that led the New York City Council to soon consider legislation that would focus on commission rates.

In an effort to boost market share while cutting costs and combining resources, companies DoorDash and Amazon announced their purchase of Square’s Caviar and their stake in U.K. delivery company Deliveroo, respectively.

“It’s important for the restaurants to be thinking about and know how to select the right partner, knowing that there’s going to be consolidation likely going to happen,” AlixPartners’ Boomstra said.

Another change to be anticipated in the delivery market is the improvement in food quality that won’t be met by letting meals travel over long distances. Some restaurants and venture capitalists are already exploring the use of ghost kitchens, like Kitchen United and Zuul Kitchens, and offsite locations exclusively for delivery orders to address this challenge. 

“A lot of this is a means of improving productivity for a decades-old business model that needed to be reinvented — the labor model, the cost of building out restaurants, where to put them,” consultant Allen said.

Restaurants, though, shouldn’t be all-out when it comes to this delivery puff, for economic downturns could very likely produce less disposable income for the consumers’ delivery expenditures. Although successful at present, the food and beverage industry, like all industries, still have bigger changes to go through.

 “Two and a half years ago, some of the largest delivery companies in the world were still trying to convince chain operators of the merits of it,” Allen said.

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