In five years, Nike Inc. (NKE) wants to triple its 100 million-user membership program. That's roughly 4% of the world's population, or nearly every American resident.
To reach that goal, the sneaker maker is now offering members free Apple Music, early access to new products, access to training experts on demand, and other personalized promotions, Nike announced Sunday, Feb. 4. First unveiled in 2016, the NikePlus membership program will roll out new benefits called NikePlus Unlocks, which are based on each user's personal interests and interactions.
The benefits include up to six months of free Apple Music service, for instance, as well as free credits for the fitness studio app ClassPass and guided meditation content from the mindfulness app Headspace. Unlocking these perks is easy — just exercise more through Nike's training or running apps.
"Every time you stride or rep, you physical achievements trigger rewards," the company said in a statement. "These include exclusive products and experiences from Nike and its partners."
The goal, according to Gillian Almy, Nike's senior director of member services in North America, is to engage with consumers. "We're not trying to deliver a traditional loyalty program," she told TheStreet. "We're just trying to personalize the brand to the consumer."
But as Nike's Chief Digital Officer Adam Sussman pointed out during the company's investor day, NikePlus members who shop through the Nike apps spend three times the amount that shoppers spend on Nike.com.
Loyalty and membership programs have become a boilerplate tactic for retailers to retain customers in recent years. Kohl's Corp. (KSS) , for instance, has seen tremendous success with its Kohl's Charge and Kohl's Cash offerings. During November and December, for instance, its comparable sales increased 6.9%. Macy's Inc. (M) also recently launched its loyalty program, Star Rewards, to positive initial feedback, CFO Karen Hoguet said in November.
Unlike typical loyalty programs, NikePlus does not use a points system to encourage shoppers to spend more. Instead, users are rewarded with third-party benefits based on their interaction with the app in addition to making certain purchases. When members purchase the new Nike Epic React Flyknit running shoe in white, for instance, they will receive a free limited-time subscription to Apple Music.
Nike also differs from these retailers because of its strong brand cachet. When a Nike product is too accessible to consumers, according to Susquehanna analyst Sam Poser, it may become an impediment to the brand later.
"If they're pushing people to buy more stuff, they're not creating their own coolness," he told TheStreet. In other words, Nike's membership and sales goals may backfire because they're not keeping supply below demand.
By 2020, Nike wants to reach $50 billion in sales. It also announced last October that it will cut the product design and manufacturing process in half.