If you want to learn how to develop new revenue generating customer relationships, check out the strategic Nike+ iPod alliance.
Mark Parker phoned Steve Jobs with an idea designed to eliminate the loneliness of the long distance runner. The Nike CEO wanted his running shoes to communicate performance intelligence to runners in real time. The Apple CEO seized the opportunity by folding Parker's digitally informed athlete into the iPod platform, observing that 50% of the 50 million people who became iPod owners last year used the device during a workout. With each iPod sold generating an average of three to four accessory purchases, $1 billion in ancillary earnings, the Nike connection appeared to be a good fit.
The executives called upon their respective tech and branding teams to provide an integrated lifestyle management solution. They would develop a package of shoes, data, music, and apparel designed for a core audience dedicated to an active workout regimen.
The two corporations have this in common: They both define their core markets by lifestyle. The Oregon-based Nike brand defines its global market as the "sport culture." Apple's core target audience is best defined as the "creativity culture." The overlapping of sport and creative interests underlies the lifestyle + technology profile their partnership is founded upon.
After 18 months of collaborative development, Parker and Jobs announced the result of their alliance—the impending release of the Nike+ iPod offering, revealing with it a brilliant marketing plan designed to...
- Attract exceptional attention by synergizing both brand values into a fusion brand.
- Respond to a well-defined audience's desire for experiential lifestyle support, when and where they choose.
- Develop long-term goodwill and consumer loyalty by continuously cultivating the brand-lifestyle relationship with core enthusiast communities.
- Expand the level of consumer interactivity with the brand via the Internet.
In late May, Nike and Apple unveiled their brand partnership at a New York event, with Parker and Jobs flanked by seven-time Tour de France champion Lance Armstrong and marathon world record holder Paula Radcliffe.
"Nike+ iPod is a partnership between two iconic, global brands with a shared passion for creating meaningful consumer product experiences through design and innovation," Parker said. "We're working with Nike to take music and sport to a new level," Steve Jobs added.
With the launch of Nike+ iPod slated for mid-July, the companies are preparing their channels to sell more shoes and apparel, more devices, music, and podcasts. But that's just the beginning. The partners regard it as a "great start" to an increasingly evolving collaborative plan aimed at developing new markets defined by lifestyle interplays and driven by digital convergence.
Run for Your Lifestyle
The integrated functionality of the package is inseparable from its marketing story.
Start with the basic equipment: You will need to buy the new line of digital-ready Nike running shoes, the Air Zoom Moire ($99/pair) designed with a built-in insole pocket to house an accelerometer that comes with the Nike+ iPod Sports Kit ($29). The package includes the MEM sensor for tracking a runner's performance data in three axes (space, temperature, direction), and a wireless receiver that connects to the iPod nano ($149-$249).
The iPod works in conjunction with the Internet to make full use of input and output functions. It will automatically sync and store your workout data on a personalized log at nikeplus.com.
Preparing to run? Get ready to listen.
Looking for music with a good beat for running or other type of exercise? New from Apple's iTunes Music Store, a "sport music" section with mixes timed to synch with your workout. Load your own music, choose from workout routines or music mixes created and posted by iTune users, or opt for inspirational and coaching voiceovers.
Want to do it like the best? Select from playlists recommended by celebrity athletes or learn which is their favorite Power Song—the musical selection they count on when they need that extra kick to close out a workout. You can activate your pre-selected Power Song from iTunes by holding the center button on the iPod when you're ready for that extra boost.
What to wear? Put on your Nike running shirt outfitted with the snug iPod nano pocket and out the door you go.
With every stride, the music plays in your ear and the shoe is measuring the distance you've covered, pace, time, even your calorie burn rate. The iPod's wireless receiver intermittently broadcasts your personal stats. If you preset your distance or competitive goals, your shoes will keep you updated on your progress.
Finished? Return to dock the iPod at your Mac or PC computer port. Cool down as the unit automatically uploads the data adding it to your personalized progress log at nikeplus.com. Now you can review your efforts over time by run, by week, or by month using an intuitive graphical interface.
Feeling competitive? The Nike+ iPod network of sites encourages personal goal making and meeting your objectives. It also allows for tracking team efforts and competitions. At nikeplus.com you can connect and compete with up to 50 runners at a time from anywhere in the world.
Nike is planning to introduce six other Nike+ footwear styles this fall along with a range of performance apparel and accessories, including jackets, tops, shorts, and armbands designed to hold the iPod nano, the model resistant to harm from shaking.
iPod will be introducing a voice command mechanism and a gesture interface that uses movement to select songs or adjust volume. Apple has also filed a patent on a capability to change the tempo of music based on the pace of the listener's activity.
The iPod's capability to provide audio and visual display, user control, data storage, and retrieval heralds the way for the development of many more integrated lifestyle, function-assistance processors that are likely to be cheaper, simple, easy to use, and even disposable.
Will this model work for you? Ask yourself:
- How can my company add intelligence and/or lifestyle benefits to our line?
- How can we use the Internet to provide customers with more meaningful experiences and relationships?
- Are we able to collaborate internally and with external brand partners to achieve mutually beneficial goals?
Many executives will be using the Nike+ iPod strategy to transform any number of fields with personalized devices and applications linked to related communities from healthcare and finance to travel and entertainment.
Although it may be too early to fully assess the long-term implications of the Nike+ iPod effort, it represents the starting point in a new race. And they're off.