Nike recently created an application to ensure customers get the best fitting shoes. Perhaps this just seems like a good idea instead of an innovation. However, consider the fundamental transformation required to move from being a company that sells athletic shoes to becoming a company that provides comfortable shoes. In analyzing Nike’s work, notice how closely this innovation relates to “vested outcomes.”
Recall the central elements of vested outcomes from an earlier post:
(1) Accomplishing goals (not work tasks) – Consumers want comfortable and durable shoes. They don’t spend time dictating the type of sole to use, what materials to use when constructing the tongue, etc.
(2) Defining what to do (not how to do it) – Consumers leave “how” up to Nike. Nike could have easily (though not perhaps cost-effectively) created an expanded in-store inventory to ensure a wider variety of options to suit individual consumer preferences. Nike’s application now allows them to gather customer data and compare size/fit information with data about their inventory. From there, they make a matching recommendation to the consumer. Nike decided “how” to accomplish the goal.
(3) Mutual benefits (win/win) – Consumers benefit by having shoes that are more comfortable (win). In fact, previously Nike manufactured shoes based on celebrity endorser’s foot sizes. (Works great if your feet are the same size as the celebrity, right.) And Nike? Because of the way they have approached the demand for comfortable shoes they realize a number of benefits.
Here is a small illustration of how Nike benefits as they deliver “comfortable” shoes.
As consumers adopt and use Nike’s application, Nike accumulates consumer information.
Consider that globally, foot dimensions fit into a normal distribution pattern (yes, bad pun intended). If they do, then making shoes close to the mean/median of that distribution is a way to please a large proportion of consumers. Understanding more about the most needed shoe size/fit combination means they can manufacture them more cost-effectively.
Similarly, making shoes that fit consumers at the tails of the distribution curve might be prohibitively expensive and lead to wasted inventory. Or the inventory might go unsold (reduce costs). Or that same set of shoes might be returned in a greater numbers (poor customer experience). Or, Nike could decide that serving the size/fit combination for these outliers might garner a higher price (improved margins). You get the idea.
Ultimately, delivering comfortable shoes enables Nike to reduce costs, improve margins, improve the customer experience, and conceivably identify new markets.
Now imagine that Nike could take these improvements a step further.
For example, if a consumer’s size/fit doesn’t match Nike’s inventory, Nike could helpfully recommend NOT to buy the Nike brand which might stave off buyer’s remorse and unnecessary product returns.
Taken a step further still, Nike could even recommend a competitor’s alternative. Indeed, since they say their mission is to “bring inspiration and innovation to every athlete in the world” it seems entirely congruent for Nike to help match sport innovations to consumers. They could carve out an even larger niche and purpose by being the source to help athletes find the best equipment for all consumers.
At first blush, Nike’s emphasis seems to be focused on helping consumers find better fitting shoes. In reality, Nike accomplishes much more by improving the customer experience and potentially carving out a broader and more important niche in the marketplace. The pivot point is that focusing on desirable customer outcomes benefits your company too.