Posted by Alex Jackson on 23rd Nov 2019
Nike made an important decision this month about its future relationship with online retailer Amazon. After a two-year test program, Nike has decided it will no longer sell directly to Amazon. Now, why would any major apparel brand want to break ties with Amazon? It is the leading online retailer in the United States? Though this may seem like an unusual development, it was not totally unexpected. Nike initially made some significant demands of Amazon, including offering the platform a limited amount of products and making demands on how the goods were presented and priced. Nike dictating to Amazon how it sells its goods? It may sound crazy, but Nike did just do it.
Nike inhabits a very unique position in the retail environment. It’s one of the most recognized brands in the world, and they do not need to rely on a single retailer for generating sales. They can and do dictate just what and how their brand is sold, and they are in a position to walk away from any major retailer. Just how big of a hit to Nike’s bottom line this decision will be, no one can say at this point. What is certain is that the company plans to make up the loss in revenue by increasing direct to consumer sales. Nike feels that it can generate more profits and higher brand loyalty when a consumer purchases directly from Nike rather than via a third party. It all boils down to controlling the perception of the brand, and Nike knows a heck of a lot about building brand loyalty.
Who stands to gain in this situation? Nike obviously thinks is will, but also independent retailers stand to gain. With Nike cutting off the flow of goods to Amazon, this leaves a fairly significant gap in the marketplace at Amazon. Consumers may decide to still do their shopping on Amazon for their Nike needs and shop instead with third-party sellers. This means increased sales for Nike products with the possibility of better margins with less competition.
It’s a significant risk for any brand to divorce themselves from a major retailer like Amazon, but if anyone can do it successfully, its Nike.
Foxliquidation offers a wide array of athletic apparel and other sporting goods from leading brands like Nike, Under Armor, North Face, Puma, and more. Check out our Men’s Sport and Ladies Sport categories for more of our offerings.
Our regular readers may recall our look last year at the final days of the once-dominant toy retailer Toys R Us'. 2018 marked the end of an era as the 70-year-old company was forced into bankruptcy after several failed attempts to salvage the faltering chain. A little over a year later and things are looking up for the brand, it's far [...]
When you do your online shopping chances are high that your first stop is Amazon. Let's go down the list of reasons for this you've got convenience, prime free shipping, ships fast, and the best deal. Now let's stop and examine this last reason in closer detail and see how well it stands up to scrutiny. The fact is [...]
The big names in brick and mortar retail have, for the most part been in the online retail game for the best part of two decades and have come a long way since their early years in online retail.Here's your throwback photo of the day, Target.com circa 1999.convenient solution to satisfy your shopping needs. So let's be honest here. [...]
The big names of online retail in the US like Amazon and eBay are now facing some healthy competition from a far less talked about source. It’s not Target, Walmart or some other big-name player it’s from Shopify, and it’s army of small but determined independent retailers. Shopify is an e-commerce sales platform provider that helps merchants create retail sites [...]
There’s an odd phenomenon happening right now in the brick and mortar retail world, and it has to do with returns. Once upon a time, retailers cringed at the thought of returns and did their best to discourage them. Now not only are they encouraging them, but they are also going out of their way to accept returns from [...]
Back in 2006, when Amazon first launched their Fulfillment by Amazon program, most industry analysts were not throwing around words like innovative or revolutionary to describe it. Quite the contrary, this was 2006, Amazon was big but not the dominant force that it is today. At the time, Fulfillment by Amazon was looked upon as quite a big gamble [...]
What is the world biggest online shopping day? If you were to guess Cyber Monday, Black Friday or Thanksgiving you would be close but off by a few weeks. It is actually 11-11 or Singles Day as it’s known in China. It’s not technically a holiday, but more of a marketing event that’s been nurtured into a massive consumer [...]
I read an article the other day about e-commerce that was first published in 2015 and one line, in particular, made me laugh. The article described online sales via mobile devices as slow and cumbersome, making up a tiny percentage of total online sales. Can you believe that? Just four short years ago! Fast forward four years and mobile transactions [...]
For Years Facebook, the social networking platform has been a great way to catch up with friends and family and to generally kill time. More recently however it has started to become a far more practical tool, particularly for the reseller’s community. In 2016 Facebook officially relaunched their marketplace feature which had laid dormant for the past several years. This [...]