Nike Sportswear Los Angeles, fiscal 2021 to 2023: grow sport to grow sportswear

What it is

When Khounlavong reviewed his first year in Los Angeles, he named the gap himself: the business had no yearly or seasonal strategy to set direction. His fiscal 2020 goal was to set the vision for Nike Sportswear in the city and to support the wider City of Athletes plan.

The numbers made the case. On point-of-sale data for footwear, Nike Sportswear in Los Angeles grew from $142.9M in fiscal 2016 to $232.6M in fiscal 2019, a 17.6% compound rate. Every other category together grew 3.5%. From fiscal 2018 to 2019, lifestyle drove 78% of Nike's footwear growth in the city. The plan had to keep that engine running across a market where consumers travel five times longer to connect with Nike.

What Khounlavong did

• Authored the fiscal 2021 to 2023 cross-functional growth plan for Nike Sportswear in Los Angeles, covering product and merchandising, marketplace and brand. Strategy development began in the fourth quarter of fiscal 2019. The plan deck is dated October 2019.
• Set the target on the deck's footwear point-of-sale basis: $233M in fiscal 2019 to $416M in fiscal 2023, a gain of $183M at a planned 16% compound rate, inside a full potential of $1.5B for Nike in Los Angeles.
• Built the plan on one consumer insight, the 200% Angeleno. The Los Angeles consumer is not an "or" proposition but an "and": 100% athlete and 100% cultural pioneer, 100% Mexican and 100% American.
• Set the strategic direction as "leverage the power of sport to shape culture", with one implication: by accelerating sport, Nike grows sportswear.
• Planned by consumer mindset instead of by product category. The plan served four mindsets first, the visionary, the sneaker obsessed, the trend maven and the sport inspired, and connected to the sport and fitness enthusiast and the sport addict.
• Chose three programs to carry the plan: a partnership with Undefeated on its training program in downtown Los Angeles, Empower Her in Hollywood and South Los Angeles, and Win with Watts and Revitalize East Los in East and South Los Angeles.
• Divided the work by trade zone. Downtown and Hollywood were led by the neighborhood boutique accounts. East and South Los Angeles were led by Nike Direct, the company's own stores and digital. Orange County was to be served digitally. Digital and membership ran under all of it.
• Focused product on four power franchises, the Air Force 1, Air Max 270, VaporMax and Cortez, and on three apparel items, the Windrunner, shorts and hoodies. Each group was 30% of Nike Sportswear units in the city in fiscal 2019, footwear and apparel counted separately.
• Put requests to headquarters in writing: more resources to build demand beyond Hollywood and downtown, stronger points of distribution in East and South Los Angeles, and proper funding for key doors.

Results

• A three year strategy on a planned 16% compound annual growth rate, fiscal 2019 to 2023.
• Lifestyle drove 78% of Nike's footwear growth in Los Angeles from fiscal 2018 to 2019.
• Nike Sportswear footwear grew at a 17.6% compound rate in Los Angeles from fiscal 2016 to 2019, against 7.2% for Nike footwear in the city as a whole.
• On the same data, downtown Los Angeles had the highest year over year growth of any zone, up 42.2%. Hollywood was second, up 27.5%. Digital grew 43%, against 30% for North America.

At a glance