Editor's note: This is a complimentary research excerpt from Hedgeye retail analysts Brian McGough and Alec Richards. Click here for more information on our services for individuals.
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Takeaway: There is a lot going on with this new Nike SNKRS app. The takeaway right up front is that it makes buying shoes easier on a mobile device. That's obviously bad news for traditional retailers like Foot Locker (FL), Hibbett Sports (HIBB), Finish Line (FINL), etc. We haven't seen this type of technology before but it makes sense given Nike's push into the direct business.
A couple additional nuances worth mentioning…
- Everything purchased on the app ships for free. The free shipping threshold on nike.com sits at $75. As we were typing this it made sense to us because this is a sneaker-head app which will probably not feature any styles under the current hurdle rate, but it’s a solid piece that the marketing department can use. We think that Nike moving to free shipping across the board is a 12-18 month development.
- The app will curate specific styles that fit the consumers taste. That's cool, but we think the more important feature is the limited/new release notifications. Limited releases are a big driver for the likes of FL. Nike now has a way of communicating with its target consumers directly about these releases.