“As part of Nike’s focus on elevating consumer experiences through more direct, personal relationships, we have made the decision to complete our current pilot with Amazon Retail,” Nike told Bloomberg. “We will continue to invest in strong, distinctive partnerships for Nike with other retailers and platforms to seamlessly serve our consumers globally.”
The move appears unreflective of any broader distribution strategy and is instead Amazon specific. Nike will continue to pursue partnerships with other distributors and emphasize its direct-to-consumer (DTC) channels.
Nike did not clarify the motive behind its withdrawal, but Wall Street Journal sources suggested executive impatience with Amazon’s failure to restrict unauthorized sales. Nike had long feared such brand damage and, as a consequence, had withheld direct sales to Amazon for years. Not until 2017 did Amazon finally work a pilot deal, which required it to improved policing of counterfeits and sales.
Why It’s Important
Nike’s pullback from Amazon is largely in step with its strategic vision. Nike recently cut some of its retail partners and increased DTC sales to 30% of its annual sum. However, its targeting of Amazon, in particular, reflects an uncomfortable theme for the e-commerce giant.
Amazon has grown third-party sales volume from 30% in 2008 to 60% in 2018, and its simple listing process has made it easy for counterfeiters to exploit. Amazon has adjusted its listing policy and algorithms in an effort to address scams, but the effects of such initiatives are yet unseen.
Nike will continue as a client of Amazon Web Services.
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Photo credit: Emily Elconin
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