Case Study: How Nike is Leveraging AI Across its Operations

Background

Nike, a global leader in sportswear and athletic footwear, has long been at the forefront of innovation and customer engagement. In recent years, the company has made substantial investments in Artificial Intelligence (AI) and other emerging technologies to transform not just its products but also its customer experience, supply chain, and IT operations. This drive towards tech-enabled solutions has been especially significant in the face of the global pandemic, which pushed consumers and businesses more towards digital platforms. Nike has collaborated with partners like Cognizant to modernize its IT infrastructure, offering both onsite and remote support across a wide range of hardware and applications. With a focus on sustainability, customer engagement, and operational efficiency, Nike’s AI journey represents a compelling case study in corporate innovation.

Key Takeaways

  • Nike employs AI to enhance customer experience through hyper-accurate shoe fitting, personalized offers, and virtual assistants.
  • Advanced analytics and AI-driven strategies have been adopted in Nike’s supply chain to improve speed, accuracy, and sustainability.
  • Collaboration with IT major Cognizant to bring in hyperautomation and AI into Nike’s technology operations, aiming for improved service productivity and cost savings.
  • Challenges include data privacy concerns, achieving 24/7 customer service accessibility, and ensuring the sustainable use of technology.

Deep Dive: How Nike is Leveraging AI Across its Operations

Approach

Nike’s approach to AI is holistic, covering a wide array of applications from customer experience to supply chain management. In customer engagement, Nike uses AI-powered apps that offer hyper-accurate shoe fitting and personalized recommendations. The company also employs AI for deep customer analytics, aided by its acquisition of Zodiac, a data analytics firm. On the supply chain side, Nike has integrated AI and machine learning to predict product demand and to forward-position popular products, reducing lead times and improving service quality.

Implementation

Nike has been pragmatic in its AI implementation. Customer-facing AI solutions include an app that employs augmented reality and a 13-point measuring system for shoe fitting. In its supply chain, the company has opened multiple regional distribution centers fueled by AI algorithms to meet localized demand more effectively. Furthermore, through a five-year agreement with Cognizant, Nike is enhancing its global technology operations. This includes multilingual IT customer service, deskside and dispatch depot, as well as application and infrastructure support.

Results

Nike’s AI initiatives have been quite successful. The AI-powered apps have not only improved customer relationships but have also provided valuable data for product design and inventory management. Nike has also tripled its digital order capacity in specific markets thanks to AI-enhanced supply chain operations. The collaboration with Cognizant is expected to bring new self-service capabilities, improve service productivity, and offer significant cost savings.

Challenges and Barriers

While Nike has seen significant gains from its AI investments, challenges do exist. Data privacy is a significant concern given the vast amount of customer data collected through various apps. The ambition for 24/7 customer service through AI tools like chatbots also poses its own set of challenges, including maintaining the quality of service. Additionally, the drive for sustainability requires Nike to continuously scrutinize its tech-enabled operations for environmental impact.

Future Outlook

As consumer behavior and technology continue to evolve, Nike is poised to further its AI capabilities. Plans likely include the expansion of AI in customer service applications, increased automation in the supply chain, and deeper collaborations with tech partners like Cognizant. Given its past performance and strategic focus, Nike’s AI initiatives will undoubtedly continue to play a significant role in shaping both the company and the broader retail industry.

Conclusion

Nike’s journey in AI represents a well-rounded strategy that touches multiple facets of the business, from customer experience to supply chain and IT operations. By focusing on delivering personalized experiences, optimizing operations, and tackling challenges head-on, Nike serves as a textbook example of how AI can be effectively implemented in a large, global enterprise. Its efforts in AI have not only improved its bottom line but have also set the stage for future innovations that will likely continue to redefine the retail landscape.

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Sources:
Cognizant To Drive Nike’s Efforts In Hyper-Automation, AI In 5-Year Deal
Nike and Cognizant expand their relationship into technology
Nike building its global ‘digital first’ supply chain’ with 1,000 picking robots
How Nike Leverages AI for an Exceptional Customer Experience


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