In this Placer Bytes, we dive into Nike’s recovery and holiday performance, analyze the Sephora partnership with Kohl's, and break down the impact of the COVID resurgence on key Darden restaurant brands.
What to Make of Nike
Using location analytics to analyze Nike’s retail strategy puts its offline push in a particularly positive light demonstrating the opportunity that exists there. The brand kicked off 2020 with significant year-over-year growth, and while the pandemic made its impact felt, the brand’s recovery has been impressive. By September, visits were down just 11.4%, only to be surpassed by October visits that saw the gap shrink to just 1.9%. But, November saw visits dip back down to 22.9% largely on the back of major visit declines on Black Friday. How concerned should this make Nike fans?
From our analysis, not very concerned at all. Nike was hit by the same Black Friday declines that impacted almost every offline retailer. And even those drops require context. While Black Friday visits were down 44.5%, this was expected considering the heavy orientation towards indoor mall and city locations - two areas particularly hard hit by the resurgence of COVID cases.
Yet, the visits gap the Saturday after was just 26.0%, followed by a Sunday down just 8.3% and a Cyber Monday marked by a 12.0% year-over-year visit increase. All of this suggests that while Nike has indeed been impacted by COVID, the brand has been uniquely resilient among the apparel sector. Should similar patterns hold, and COVID eventually come to be contained, there are few brands that could benefit more in 2021.
Sephora Makes the Right Call?
Sephora’s decision to open up over 800 mini-stores within Kohl’s locations should absolutely be seen as a direct response to Ulta. While the brand kicked off 2020 with year-over-year visit growth of 1.0% and 10.0% in January and February respectively, the pace of recovery has exposed a few key weaknesses - namely that the brand has little outdoor presence away from major cities. By partnering with Kohl’s, Sephora is looking to effectively tap into the outdoor setting and grab some of the diversification that comes with it.
The real question though may come from how success is handled. Should Sephora find success in this channel, it’s hard to imagine not seeing a greater expansion of Sephora owned locations into more suburban and outdoor settings - creating a more direct match-up with Ulta. However it plays out, the move is another signal of how aggressively Kohl’s is pursuing concepts that can help elevate its outdoor department store model - one that seems increasingly strong as mall-based competitors close locations.
Darden’s Recovery Update
It is hard to imagine a more challenging situation for a sit-down restaurant chain than seeing a
resurgence of COVID cases. After seeing the visit gap shrink to its lowest point since the start of the pandemic, both the Olive Garden and LongHorn Steakhouse chains saw a significant increase in that gap in November. While there are clearly other elements like takeaway and delivery that could offset these losses, there are few brands and sectors in more desperate need of an end to COVID than these chains and the wider sit-down restaurant space.
Will Nike show its increasing strength in the months to come? How quickly will we see the impact of Sephora’s partnership with Kohl’s? Can key Darden chains limit losses in the coming months? Visit Placer.ai to find out.
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