Nike and Amazon: What's Really Happening
Nike, the popular footwear manufacturer, began selling on Amazon in 2017. Two short years later, the brand announced it was ending its partnership with the e-commerce giant. News of this rattled the industry and gained media attention. In this blog post, we dive deeper into this issue and break down what it means. Continue reading to learn more about what’s really happening with Nike and Amazon.
Important Statistics to Know
As two large and influential companies, Nike and Amazon have been the subjects of studies and reports over the years. Coincidentally, three reputable sources measured each company’s global value and brand loyalty. Check out the comparison below.
Translating the Media
Since the announcement of Nike’s departure from Amazon, there have been headlines across the spectrum of opinion. Some have been as bold as saying “Brands Don’t Need Amazon”. Others make claims the channel is too difficult to use and find new brands.
But there is more to this than whether Nike needs Amazon. Amazon is invaluable to the brands that sell on the channel. It makes a quick delivery possible and has millions of loyal daily users. Many brands also understand what it takes to ensure their listings are discoverable. For example, these brands know the intricacies of advertising and optimization. So they include these efforts in their strategy for shoppers to find their products with ease.
It’s undeniable Nike is a self-sustaining brand that doesn’t need Amazon to drive incremental revenue. But ending this partnership won’t drop Nike’s products form the channel entirely. Nike has thousands of resellers offering its products on Amazon. So the brand will still have a strong presence on Amazon.
Instead, Nike is forfeiting most of, if not all of the control it had over its representation on the largest online retailer and third-largest ad platform.
The Consequences of ‘Leaving’ Amazon
Because of this ended partnership, Nike will have to embrace inconsistency. This won’t only affect Nike’s brand image, but increase the risk of faulty products and counterfeits landing in the hands of consumers. On Amazon, it’s reasonable to assume consumers are usually not aware they’re ordering from a third-party reseller. And since Nike won’t have a hand in managing its presence at all, unauthorized resellers have the power.
The relationship between Nike and Amazon is probably not entirely over. Nike will likely continue to work with the channel and third parties. It’s unclear what Nike’s path forward will look like, but there are several steps it could take. For example, Nike could reach out to all unauthorized sellers with cease and desist letters, or employ programs like Transparency and Project Zero.
Nike removing itself from Amazon has caused a whirlwind of speculation and discussion. It could be because Nike has become frustrated with Amazon and the tools made available during its pilot program. It’s important to understand, Nike made this decision knowing revenue is being left on the table and issues on the channel are unresolved. It will be interesting to see if there are any ripple effects throughout the industry because of this decision.
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