5 Reasons Why Nike Chose To Partner With Amazon

Level The Competitive Field – Big Brands such as Under Armour and Adidas had already established their unique brand registry within Amazon’s marketplace. Under Armour had established its unique brand presence in June 2016, a year before Adidas and Nike. Adidas, in fact, established its registry in May 2017 and there was no way Nike could delay its presence in Amazon any longer.
DTC Revenue Growth – Nike’s Direct To Consumer(DTC) revenues had shown a robust growth(30%) in the last Financial Year(year ended 31 May 2017). Interestingly, the online sales segment within DTC grew over 50% YoY. It made sense for Nike to maintain this online sales momentum and the obvious choice was the Amazon marketplace. Moreover, for Nike, DTC revenues offer better product margins, so boosting online sales seemed a logical choice.
Better Control of Brand Experience – Nike now had the opportunity to better control its brand within the Amazon ecosystem. Until now, the Nike brand experience was largely controlled by an army of licensed and unlicensed online resellers of Nike products. Add to this mix, the challenge of fake Nike products and accessories.
Superior Sales Conversion – Head-to-head, the sales conversion % of Nike products within Amazon(6%) was twice as much as compared to the Nike storefront(2.9%).
Shareholder Sentiment – Nike’s stock price had topped at $68.19 in late 2015, thereafter in 2016 the stock price lost nearly 30% of its value. It is possible that senior management was under pressure to do something to lift the sagging stock in a climate where the broader market was in an upward trend.

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