Posted: 2020-10-27 9:13:35
One Year After Nike Stopped Selling on Amazon
From Marketplace Pulse at Marketplace Pulse
Originally published 2020-10-26
In November 2019, Nike stopped selling its goods wholesale to Amazon. It didn’t need Amazon at the time, and it needs them even less today - accelerated by the COVID-19 outbreak, direct e-commerce jumped to 30% of Nike’s sales, a mark it had previously expected to hit only in 2023. Amazon, on the other hand, does need Nike. After the split, the possible scenarios were that Amazon would find a different way to source Nike goods wholesale, the third-party marketplace would source the full catalog, or that Nike would reverse its decision. None happened. Shoppers instead bought other brands.
Shoppers didn’t stop looking for Nike on Amazon - searches for its products have remained in the top 1,000 most-searched terms. The third-party marketplace continues to provide some, though limited, selection. “Nike shoes for men,” one of the brand’s most searched terms, most often lead to shoppers buying the Nike Men’s Revolution 5 Running Shoe. It costs more on Amazon than elsewhere and has a subpar product page compared to category-leading products. Nike is likely okay with being presented poorly on Amazon. That makes shoppers go to Nike.com or download its app instead. The strategy is working because Nike is averaging 100 million visits to its website and is one of the top 10 most-downloaded shopping apps. As a result, Nike’s online sales were up 83% in the second quarter, adding $900 million to its total sales. “The accelerated consumer shift toward digital is here to stay,” said John Donahoe, CEO at Nike, discussing the quarter’s results.
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