Blog: Hannah AbdullaIs Nike's delayed commitment to Amazon costing it sales?

Hannah Abdulla | 12 July 2017

Nike only sells a handful of products directly through Amazon

Nike only sells a handful of products directly through Amazon

Sportswear retailer Nike's delay in committing to a solid sales partnership with online retail giant Amazon could possibly have seen it lose out on sales yesterday (11 July) as the e-retailer slashed prices on products at some rival brands as part of its annual Prime Day event.

Adidas and Under Armour – both of which sell directly on the site through their own branded pages – were two brands that had gear discounted at the highly anticipated event. Nike, however, only had a handful of products listed in the annual sales promotion. Nike does not have a branded shop on the e-commerce site and its products are currently sold via third-party sellers.

The company had announced a move last month to list some products on Amazon as part of a pilot project to see if it could clamp down on the third-party sale of its products as well as gain access to a wider shopper base.

In the group's fourth-quarter earnings call, Nike CEO Mark Parker confirmed rumours it was partnering with Amazon on a pilot project to sell a limited assortment of apparel, footwear and accessory products on the retail giant's website.

Nike strikes deal to sell product on Amazon

Nike is the number one clothing brand on Amazon, according to Morgan Stanley research, despite not selling directly to the website. Instead, its products are sold by unauthorised third-party re-sellers, which Amazon profits from. So it is thought the move will give Nike a level of control over its products entering the site and allow it to work with Amazon to crack-down on third-party sellers.

But the delayed reaction in fully committing – possibly prompted by concerns it could lose control over how its products are sold and marketed – may have cost the company a sales opportunity yesterday. Last year Amazon indicated it sold over a million pairs of shoes on Prime Day.

According to research carried out by technology firm Fujitsu, Prime Day is now "an annual and expected event".

"Where most retailers will wait for more traditional times of the year to run their sales, such as at the end of the summer season, or during Black Friday and the Christmas sales, Amazon goes against the tide and runs its own peak day. Retailers need to find ways to match the likes of Prime Day and ensure they are differentiating themselves from their competitors to attract new customers through innovative services that complement their brand," says Rupal Karia, MD, Retail and Hospitality, Fujitsu UK & Ireland.

"Our research found that no matter what age, consumers feel that they would prefer to shop with Amazon. 72% of 18 to 24s, 78% of 25 to 30 year olds, and even 73% of over 60s all believe that if Amazon had a physical store, it would quickly become their preferred store to shop in. Retailers need to take note and ensure that they too are providing their customers with the relevant channels for their shopping needs and not run the risk of freezing out customers for failing to do so," he adds.

Sectors: Apparel, Footwear, Retail

Companies: Amazon, Nike

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