Nike Spends $3.59bn On Advertising While Revenue Drops Amid The Coronavirus Pandemic
New data indicates that in 2020, Nike has spent $3.59 billion on advertising. The figure represents a slight drop from last year’s $3.75 billion.
Nike’s 2020 revenue drops amid a pandemic
Nike’s spending on advertisements has remained fairly constant over the years. In the last five years, the company has spent a total of $17.54 billion on advertising.
The SafeBettingSites research also overviewed Nike’s revenue and 2020 recorded $37.4 billion. This is a drop of 4.35% from last year’s $39.1 billion.
Notably, Nike’s last year’s revenue was the highest in five years. In 2018, the revenue stood at $36.9 billion, representing a growth of 7.26% from 2017’s $34.4 billion.
Nike’s 2020 revenue drop was majorly due to the coronavirus pandemic. According to the research report: “The pandemic played a key role in shifting consumer behavior, a change that was also felt at Nike. During the period, most consumers opted for online shopping in a bid to flatten the curve. The changing consumer behavior offers Nike an opportunity to transforms its business in regards to meeting customer needs.”
In 2019, Nike retail stores in the United States stood at 384, dropping to 338 in 2020. For non-US based stores the number stood at 768 last year while in 2020, the figure was 758.
From the data, in 2020 Nike has closed 46 shops in the U.S, and only 10 overseas representing about 5.1% of all 1096 retail stores. The closure was mainly due to the implications of the coronavirus pandemic.
Overall, despite the 2020 drop in revenue, Nike is expected to rebound later this year accelerated by the reopening of retails stores in North America and China. Furthermore, Nike is set to make more investments in technology to deal with changing consumer behavior globally.
The company is heavily banking on strong leadership to make a revenue comeback after the coronavirus pandemic. In July this year, Nike announced a series of senior leadership changes as part of its Consumer Direct Acceleration (CDA) program. The program seeks to accelerate its digital transformation for generating long-term growth and profitability. The company expects the leadership changes to result in a net loss of jobs across the company, which will result in pre-tax one-time employee termination costs running into millions of dollars.