Nike Stops Selling Products In Amazon And Sells Direct Products.

Nike, the US sports apparel giant, will stop selling its sports shoes and clothing on the Amazon website of the US electricity giant Amazon, ending the retail pilot project that has been reached between the two sides since 2017. The move comes as Nike fully adjusts its retail strategy. The brand will vigorously develop its own direct consumer oriented marketing channels in the future.
Nike said in a statement: "as part of Nike's direct consumer oriented retail strategy, we decided to end the retail pilot project with Amazon. But we will continue to build strong and unique partnerships with other retailers and platforms, and continue to provide seamless services to global consumers. "
According to two people familiar with the matter, Nike made this decision after a long time consideration. At the same time, Nike has been expanding the third party seller team so that its products can still be sold on a large scale online.
At the same time, Nike will continue to use Amazon's cloud computing Department Amazon Web Services to enhance the performance of Nike app applications and Nike.com websites.
In addition, Nike also hired the former EBay online shopping platform CEO John Donahoe as the next CEO. This shows that without Amazon help, Nike will still actively develop e-commerce sales in the future.
　　 Counterfeit goods are banned repeatedly.
Bloomberg commented that Nike ended its cooperation with Amazon because of worries about repeated prohibition of counterfeit goods and depreciation of products. At present, such large e-commerce platforms such as Amazon are flooded with counterfeit goods, and unauthorized dealers arbitrarily destroy the price system. Before 2017, the Nike products sold by Amazon came from the grey market or counterfeit products. Nike can hardly control how they are put on shelves, and the authenticity of product information and products can not be proved.
Nike joined Amazon's brand registration program in 2017, hoping that this will enable them to have more control over products sold on e-commerce sites and acquire more customer data to combat counterfeit goods. But Nike is hard to control Amazon's trading market. The third party sellers who have been cleared need to change their names to reapply for business.
James Thomson, an e-commerce brand consultant and former Amazon employee, commented: "Nike leaving Amazon does not mean that its product leaves Amazon, nor does it mean that its brand problem can be solved. Even if there is no official cooperation between the two sides, people can still find the Nike products they want in Amazon.
The exit of Nike will make Amazon's brand registration plan lose a heavyweight partner, and may cause other partners' concerns. Other brands also expressed disappointment at the rampant Amazon counterfeits. They also worried that giving Amazon excessive price control would devalue their products. In addition, Amazon's move into its own brand has intensified its tension with the cooperative brand. Amazon now sells its own products from battery to mattress to snacks, and its own fashion brands have broken through 100 more. (see "ornate ambition": hundreds of hundreds of brands in Amazon fashion, or exacerbate the pressure of the third party fashion brands and retailers).
But Neil Saunders, an analyst at GlobalData Retail, said that few other brands have the strength of Nike, so it may be more difficult for them to leave Amazon. He said: "Nike has great influence and its products are also popular, so it has the ability to choose the distribution channel of products, because consumers will find it in other places where Nike products are available. I don't think most brands have the choice as Nike does. "
　　 Adjusting retail strategy
Shortly after launching the retail pilot project with Amazon, Nike announced a comprehensive plan to adjust its retail strategy. Nike has turned more attention to direct consumer oriented channels, especially Nike app and Nike.com. Executives also said the company would substantially reduce the number of retailers that cooperate.
In 2017, Nike launched business with 3 million retailers worldwide. Elliott Hill, head of Nike's consumer and marketing business, told investors that Nike will focus its attention on about 40 partners in the future.
The Wall Street Journal reported at that time that Amazon was one of Nike's top 40 retailers. But Amazon failed to meet a clear demand in the Nike distribution strategy: Nike is making huge investments in the digital field, and they hope Amazon will launch a remarkable online sales model for them. For example, there are separate "Nordstrom x Nike" online stores on the Nordstrom website of high-end department stores in the US. In fact, Nike is not very interested in retailers who put it together with other smaller competitors. As Wells Fargo analyst commented: "Nike is more concerned with brand display than consumer exposure, and they do not need to disseminate solely for communication."
In recent quarters, Nike has made huge gains in direct consumer oriented retail channels and digital areas. At present, wholesale channels account for about 68% of Nike sales, which is much lower than 81% in 2013. Although wholesale business is still a major part of the company's sales, the business growth directly to consumers is three times that of wholesale channels. In the last quarter, sales of digital channels increased by 42%, and app users accounted for more than 50% of the sales of digital channels. At the end of last year, Nike executives said that digital business has the potential to become the main selling channel for Nike.