Nike Will Conclude A Partnership Agreement With Amazon

According to the world clothing shoes and hats net, Nike (NIKE) CEO Mark Parker (Mark Parker) formally announced in a telephone conference with investors in June 29th that Nike will Amazon (Amazon) to reach a partnership agreement. In fact, rumours related to rumors began to spread a week before the official announcement, but up to now, Nike can sell goods on Amazon's website, though they have been resisting the electricity giant Amazon.

Parke and Nike brand President Trevor Edwards (Trevor Edwards) repeatedly stressed in this conference call that Nike will launch a pilot scheme to sell some of the footwear, clothing and accessories on the Internet as a test for the electricity supplier market. Nike's move will not only further consolidate Amazon's dominance in the US e-commerce market, but also bring opportunities and challenges to itself.

Opportunity

Nike can get Amazon's millions of user group resources, including 80 million high consumption Amazon Prime members.

Amazon is rapidly developing into the largest e-commerce platform for clothing and footwear sales in the United States. It recently released a service called Prime Wardrobe. The service allows consumers to "pre test and buy", and it can be decided on the 7 days after receiving the goods before deciding whether to choose and retain the goods.

Nike will be willing to participate in this service. In view of Nike's main competitor, Adidas (Adidas) will also join the "Prime Wardrobe", Nike will not want to lose to Adidas in this area. Amazon will give Nike an independent distribution channel, while other sporting goods retailers and department stores will not have such a good deal.

Another important aspect of Nike's cooperation with Amazon is its ability to control the Nike products on Amazon's website. Although Amazon did not cooperate with Nike before, Nike products sold by third party sellers were everywhere, Nike was also the sales champion of clothing brand on Amazon. Those unauthorized Nike products may be at risk of counterfeiting and shoddy products.

Parke's attitude is clear, he wants to improve customer consumption experience and Nike brand's reputation in Amazon. Moreover, Nike can better control which products can or can not be sold on the website.

Challenge

At the same time, Nike is also facing a certain risk. In order to make the shopping more convenient, Amazon's website layout is not too much decoration, and will put the lowest price goods in the most prominent position. Because of Amazon's low price protection strategy, Nike is likely to be forced to sell its goods at a very low discount -- which runs counter to Nike's long-standing "high quality, tight control" brand blueprint.

Elaine Kwon, a former luxury retail department director, said that selling goods through e-commerce channels could bring a vicious circle to brand assets. (Elaine)

But Nike is under increasing pressure, prompting it to consider selling goods on Amazon.

In the US market, the headquarters of Nike, and the largest sporting goods market in the world, Adidas is constantly engulfing Nike's market share. The market share of the former has doubled all over the past. Nike's current growth mainly comes from overseas markets and direct sales to consumers. This is also the sector that Nike will continue to develop vigorously.

Cooperation with Amazon is indeed very attractive, but Nike must carefully step into Amazon's e-commerce platform. Every step of expansion needs to think twice.

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