Nike sprints into a kids subscription service

Hey kids, Nike wants you!

The No. 1 sneaker retailer in the U.S. is launching a subscription service for kids called Nike Adventure Club, reports CNBC.

It will allow parents to order shoes for their kids ages two to 10 either on a quarterly, bimonthly or monthly basis, paying monthly fees of $20, $30 or $50, respectively. The last option shaves off $10 per pair of Nike shoes purchased, with the average kids sneaker retailing for $60. (https://www.cnbc.com/2019/08/12/nike-is-entering-the-subscription-business-with-a-kids-sneaker-club.html)

The launch comes just as the back-to-school season is in full force.

In the Nike Adventure Club boxes, the company is sending more than just shoes. Each box will have the child’s name on the outside and will include an activity guide, stickers and an additional gift like a drawstring backpack. Nike is also creating a website for Nike Adventure Club members to find activity prompts and, of course, pick their shoes.

More brands, like Urban Outfitters and American Eagle, are testing subscription models, seeing this as a new source of recurring revenue and a way to amass more loyal customers.

For parents worried about getting his or her child’s size right, each Adventure Club shipment comes with the option to initiate a return once a box arrives. Users have the ability to immediately select a new shoe without waiting for Nike to receive the merchandise that didn’t work the first time.

Nike certainly isn’t the first brand to launch its own subscription vertical though there are few footwear options out there today.

Walmart has teamed with Kidbox to sell boxes of kids clothes.Amazon has its own box program called Prime Wardrobe. Ann Taylor has a rental option similar to Rent the Runway, where shoppers can purchase clothes at a discount or return looks when they’re finished. Urban Outfitters also follows this model with a subscription rental service called Nuuly.

To be sure, the verdict is still out on whether or not consumers will pay for these types of boxes consistently.

McKinsey & Co. said in a 2018 study that the subscription e-commerce market had grown by more than 100% annually since 2013, with the largest retailers in the business generating more than $2.6 billion in sales in 2016 from subscription models, up from just $57 million in 2011.

But in surveying 5,000 consumers in the U.S., McKinsey found nearly 40% of e-commerce subscribers have canceled their subscriptions. And only 55% of people who’ve consider a service ultimately subscribe.

Yvonne Zacharias