September 26, 2007, 12:00 AM

Nike steps up its commitment to e-commerce

Nike Inc. has gone from looking at e-commerce as a small sideline business to a major expansion opportunity, CEO Mark Parker told Wall Street analysts on the company’s recent first quarter earnings call. Today 1% to 2% of Nike’s sales occur online.

Nike Inc. has gone from looking at e-commerce as a small sideline business to a major expansion opportunity, CEO Mark Parker told analysts on the company’s recent first quarter earnings call.

Today, e-commerce represents about 1% to 2% of Nike’s total 2007 revenue of $16.3 billion, Parker told analysts. With 2% of all sales coming from the web, Nike, No. 77 in the Internet Retailer Top 500 Guide, would have posted estimated e-commerce sales of about $326 million in fiscal 2007. “Today I think we`re hovering around 1% to 2%, but we think that has potential to grow very significantly,” Parker told analysts.

In the past Nike viewed its e-commerce program in a smaller light, but now believes the web shows significant expansion opportunity. “E-commerce today is a small percentage of our business relative to what we think it could or should be,” Parker said. “We sort of woke up a year ago and said we want to move this from, to speak candidly, a bit of a hobby to a real commitment to pursuing the full potential of one of the fastest growing channels on the planet.”

In 2006 Nike redesigned Nike.com and added faster search and more rich media. The company also hired Chris Shimojima for the newly created position of vice president, global e-commerce. Shimojima most recently was vice president and general manager of Sears Direct.

With a better web infrastructure and a senior e-commerce executive in place, Nike is committed to growing its Internet channel, Parker told analysts.

“The focus for us is in the U.S. market first and foremost but we see great potential around the world, certainly in Europe and in the Asia Pacific region as well,” he said. “We`re trying to take this through phases and starting with the U.S. as being the primary focus.”

He adds: “We are building a very strong team to really go after the opportunity and build this into a competency for Nike.”

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