Nike has announced that it will no longer sell its clothing and sneakers on Amazon. This is due to the two consumer powerhouses ending their two-year program together.
Overhaul in tactics
Bloomberg reports that Nike has made the decision to pull its products as part of a revolution of its retail strategy. With this new approach, Nike has hired the former CEO of eBay to take the reigns of the company. This move highlights how the firm is revising its approach in the online market.
With the former head of Amazon’s rival at the helm, Nike is looking to develop a personal service, while building on stronger partnerships elsewhere.
“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 fashion corporation said in a statement to Bloomberg.
“We will continue to invest in strong, distinctive partnerships for Nike with other retailers and platforms to seamlessly serve our consumers globally.”
The partnership with Amazon saw Nike act as a direct wholesaler to the retailer, rather than just allowing third-party sellers to host its products. Despite dropping its retail connection, Nike will continue to use the Seattle company’s cloud-computing unit, Amazon Web Services. The brand uses this service to power its website and apps.
According to Bloomberg, Amazon has responded to the events by recruiting third-party sellers that hold Nike products. This would then enable consumers to still purchase products made by Nike via Amazon.
Ultimately, the move looks to be a consequence of Nike’s Triple Double Strategy (2X). Forbes reports that the company announced this approach in 2017, and promised to double its “cadence and impact of innovation”. It also looks to double its speed to market and double its “direct connections with consumers.”
The switch won’t have too much of a negative impact on Nike as Amazon will still host its products via a third-party. The more this other company sells, the more products it needs to purchase, giving Nike further revenue. Meanwhile, Nike can focus on its aforementioned plan and develop further income sources elsewhere.
As a result of the news, Nike’s shares increased by up to 1.4 percent on the New York Stock Exchange on Wednesday. Meanwhile, Amazon’s stock was up by up to 0.6 percent.
Amazon has been having a tough period, especially with last month’s report that it lost out on a big-money deal. It lost out on the $10 billion JEDI contract (Joint Enterprise Defense Infrastructure) with the United States Department of Defence.
Adding to Amazon’s frustration, the government chose tech rival Microsoft as its partner. This project is to include a host of cloud-based services. This ranges from AI technology and data processing to storage facilities.
Nonetheless, both Nike and Amazon remain as giants in their own industries and will continue to figure new ways to keep ahead of the game.
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