Amazon started as online book store and has grown to be the worlds largest online retailer.
Nike pull back from 1st party vendor agreement with Amazon
Nike are going to cease sales as a 1st Party vendor on Amazon.com according to reports. Having struck up a pilot program in 2017, they are pulling back perhaps to focus on direct to the consumer sales from their own website.
“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. We will continue to invest in strong, distinctive partnerships for Nike with other retailers and platforms to seamlessly serve our consumers globally.”
Nike had joined Amazon’s Brand Registry program which enabled them to control which third party merchants could sell on the platform as part of an effort to control fakes. Amazon Brand Registry not only enable a brand to control who can sell their products, but also what products can be sold – any products not listed against a product page created by the Brand Registry owner is automatically considered to be fake.
Nike pulling back from Amazon has led to Amazon actively recruiting new merchants who can take up the slack and supply Nike products on Amazon. It is likely that a consumer searching for Nike might not find the particular product they were looking for but will certainly find enough Nike products to satisfy their needs. Only serious Nike aficionados looking for a particular shoe or garment may be forced to look off Amazon but realistically if they are that focused on a product they’ll likely be buying direct from Nike anyway.
Where Nike will lose is Amazon’s ability to deliver at ever faster speeds. In the US in the past this has typically been a 2-day delivery but Amazon are now moving to 1-day delivery across the continental US. With delivery speeds across the industry rising, whilst there is little doubt that Amazon are the leader, if a consumer really wants a must-have product the chances are they’ll be happy to wait a couple of days for Nike to delivery direct if they can’t get instant gratification from Amazon.
If you’re a retailer of Nike products, listing on Amazon.com would appear to make sense as Nike pull back. Consumers will still be shopping on Amazon, particularly those with an Amazon Prime account and the first retailers to start uploading their inventory to Amazon will start to take up the slack and capture the market.
Surely the breadth of nike products will widen as Nike will no longer have control over which sellers list which items via brand registry? Or am I reading it wrong?