Nike Wants To Create Kid Sneakerheads With New Subscription

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By CultureBanx Team

  • Nike launches 1st monthly sneaker subscription service for kids
  • Kids subscriptions are up 24% year over year

Athletic shoe giant Nike (NKE -3.44%) wants to create even younger sneakerheads with its new monthly subscription box service. They’ve already relied on cultural partners like rappers Kanye West and Drake to dictate trends and initiate a frenzy in the sneaker market for kids and adults alike. Now, the company is tapping into the subscription market for the first time as they try to gain a piece of the he $69 billion U.S. children’s clothing and footwear sector.  

Why This Matters: Nike’s attempt to channel another revenue stream for footwear with a younger demographic started two years ago with its sneaker club for kids, which grew to 10,000 members. This new subscription program offers time-strapped parents three options for their kids: four pairs of sneakers a year for $20 a month, six pairs for $30 a month or 12 pairs for $50 a month. Parents and newly minted kid-sneakerheads will be able to choose from a selection of around 100 sneakers.

It makes sense for Nike to want a piece of this market even though it’s the smallest category. Kids subscriptions are still in expansion mode, rising by 24% in April YoY, according to a 2018 Hitwise report. Specifically, the kids’ category grew by 306% from 2014 to 2017.

Shoes are extremely important for Nike and a service like this could spur sales. The company boosted revenues by 4% to just over $10 billion but missed analyst estimates for earnings. However, the maker of Air Force 1 sneakers missed analyst estimates for earnings in its fiscal Q4. North America sales were up 8% to $4.17 billion in the region which accounts for nearly 40% of the company’s revenues.

Situational Awareness: The trend of subscription boxes could be a long shot for Nike as the business models are more in flux than most other retail channels. However, if the monthly kid shoe club pays off, it could allow the company to test out the subscription market and potentially apply it to its adult sneakerhead shoppers.

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CultureBanx Team

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