Nike to Stop Selling on Amazon, Two Years In

Seeing the future as more direct to customer and under its control, Nike has decided to stop selling on Amazon’s marketplace after a two-year experiment, CNBC is reporting.

“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,” a Nike spokeswoman told CNBC in a statement. “We will continue to invest in strong, distinctive partnerships for Nike with other retailers and platforms to seamlessly serve our consumers globally.”

Nike’s partnership with Amazon surprised many in the industry in 2017, as the company had been highly successful through its online, retail and DTC channels, and there is always a concern about loss of brand control when dealing with the ecommerce giant. Major brands selling through an Amazon partnership include Calvin Klein, J. Crew and Chico’s.

“In the U.S., we’re executing a new pilot with Amazon with a limited Nike product assortment,” Nike Chairman, President and CEO Mark Parker said at the time. “As we do with all of our partners, we’re looking for ways to improve the Nike consumer experience on Amazon by elevating the way the brand is presented and increasing the quality of product storytelling.”

Heidi O’Neill, Nike president in charge of retail and its DTC operation, talked to Bloomberg about the kind of experience Nike wants to create, in the wake of the Amazon breakup.

“We want to have great partners as part of that ecosystem, but we want to make sure that those experiences are the most premium experiences that we can possibly provide,” O’Neill said on the Bloomberg Business of Sports podcast. She then talked about customer interactions on Nike’s various consumer apps, including the wealth of data they collect.

“That’s the kind of future we see for our consumers,” O’Neill said.

The news follows shortly after Nike’s hiring of board member John Donahoe, chairman of PayPal and former CEO of eBay, as its new president and CEO, effective Jan. 13. He will replace Parker, who had been at the helm of Nike since 2016 and will stay on as executive chairman. The move signals Nike’s increased interest in and focus on ecommerce.

About 30% of Nike’s sales come from DTC, hitting $11.8 billion in 2018, with ecommerce sales increasing by 35%.

Maria Haggerty, CEO of 3PL Dotcom Distribution, agreed with Nike’s decision, echoing what many have said about a loss of control over brand when partnering with Amazon. 

“Amazon certainly offers benefits, particularly in the short term, but not ones upon which you can build a brand,” Haggerty said. “With your own channels, you have access to brand-building benefits including owning your own data, controlling your customer experience and controlling profit margins.”

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