retail news in context, analysis with attitude

Bloomberg reports that Nike has decided to end its two-year pilot program selling footwear and clothing to Amazon for sale on its site.

“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,” the company said 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.”

The Bloomberg story says that "the split comes amid a massive overhaul of Nike’s retail strategy. It also follows the hiring of former EBay Inc. Chief Executive John Donahoe as its next CEO — a move that signaled the company is going even more aggressively after e-commerce sales, apparently without Amazon’s help."

According to the story, the pilot program originally was designed "to ease the concerns big brands had about devaluing their products on a giant e-commerce platform, where fake merchandise can flourish and unauthorized distributors can undermine prices. Under the pilot program, Nike acted as a wholesaler to Amazon, rather than just letting third-party merchants hawk its products on the site."

Bloomberg writes that "Amazon didn’t immediately respond to requests for comment. But the company has been preparing for the move, according to two people familiar with the matter. It has been recruiting third-party sellers with Nike products so that the merchandise is still widely available on the site, they said."
KC's View:
I had a recent conversation with a Nike executive who told me that the company would be re-engineering its loyalty program, and was working on ways to integrate it with retailer programs at places like Foot Locker. The enduring tension, she said, centers on figuring out who owns the customer. Nike wants to own the customer, but so does Foot Locker and its brethren.

I don't know if it is the straw the broke the camel's back, but I'm pretty sure that Amazon has strong feelings about who owns its customers - it does.