Nike aims sneaker subscriber scheme at $10 billion U.S. kids market

[August 12, 2019]   By Nivedita Balu

(Reuters) - Nike Inc will launch a new subscription service for kids sneakers this week that seeks to woo parents with an offer of fewer nightmarish trips to the shoe store in exchange for a regular fee and consistent brand loyalty.

 Nike shoes are seen displayed at a sporting goods store in New York City, New York, U.S., May 14, 2019. REUTERS/Mike Segar

Aimed at the U.S. kids shoe market, estimated at an annual $10 billion, "Adventure Club" builds on Nike's SNKRS app, which notifies shoppers every time it launches a new shoe or has an exclusive sneaker at a nearby store.

It is Nike's latest plan to keep shoppers coming back to its brands as it struggles with strong competition from Adidas in its U.S. home market and a resurgence in retro brands like Fila and Reebok.

With three tiers of subscription – $20, $30 or $50 a month – Nike Adventure Club is aimed at 2-year to 10-year olds and effectively gives subscribers a new pair of Nike sneakers that cost about $50 or more once a month, once every two months or once every three.

Depending on whether the kids pick, for example, Nike Air Max or Converse sneakers, members will save almost nothing or up to $50 on each pair.

"Solving the need for parents with kids aged 2-10 years means that we are going to start building relationships through kids," the scheme's manager for Nike, Dave Cobban, said.

The big challenge, he admitted, was helping parents get the right shoe for kids with constantly growing feet without trips to the mall or a series of mailed returns.

Nike's subscription box will include a sizing chart in the form of a fridge magnet to help parents measure their children's feet. The company said a pilot program with 10,000 members has shown that only a small proportion of parents get the size wrong.

"About 15% of the first order is generally not the right size. When the (customer) makes the first order and it's the wrong size, we allow (the customer) to immediately order a new shoe and the new shoe comes before you have to send back the old one," he said.

"The next time less than 5% make a mistake in ordering the right size on their second order and after that, it almost comes (down) to zero."

Walmart Inc and Macy's are already using the subscription model for beauty products to keep consumers interested in a market that is flooded by online specialty retailers and Amazon.com Inc.

(Reporting by Nivedita Balu in Bengaluru; Editing by Shailesh Kuber)

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