NEW YORK • Nike will stop selling its sneakers and apparel directly on Amazon's website, ending a pilot programme that began in 2017.
The split comes amid a massive overhaul of Nike's retail strategy. It also follows the hiring of former eBay chief executive John Donahoe as its next chief executive - a move that signalled that the company is going even more aggressively after e-commerce sales, apparently without Amazon's help.
"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."
Some big brands shun Amazon's platform, where fakes flourish and unauthorised sellers undercut prices - a recipe that diminishes the value of sought-after labels.
The unravelling of the Nike arrangement threatens to reinforce retailers' unease. Under the pilot programme, Nike acted as a wholesaler to Amazon, rather than just letting third-party merchants hawk its products on the site.
More than half of all goods sold on Amazon come from independent merchants who pay the company a commission on each sale. Amazon also operates as a traditional retailer, buying goods from wholesalers and selling them to customers.
Nike said it will continue to use Amazon's cloud-computing unit, Amazon Web Services, to power its apps and Nike.com services.
Amazon declined to comment. 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.
Amazon has also been working to stem the flow of counterfeits on the site through various initiatives, including a project that lets brands put unique codes on their products to make it easier to identify fakes.
ENORMOUS REACH
The question now is whether other Amazon partners follow Nike's lead. Few other brands possess the kind of muscle Nike has, so it may be harder for them to leave.
"Nike has enormous reach and its products are in demand, so it can afford to be selective about where its products are distributed because customers will come find Nike where it is offered," said GlobalData Retail's analyst Neil Saunders. "I don't think as many brands can be as selective as Nike."
For years, the only Nike products sold on Amazon were grey market items - and counterfeits - sold by others. Nike had little control over how they were listed, what information about the product was available and whether the products were even real.
That changed in 2017, when Nike joined Amazon's brand registry programme. Executives hoped the move would give them more control over Nike goods sold on the e-commerce site, more data on their customers and added power to remove fake Nike listings.
The news of the Amazon tie-up, which Nike executives called a "small pilot", sent shoe-retailer stocks tumbling.
But Nike reportedly struggled to control the Amazon marketplace. Third-party sellers whose listings were removed simply popped up under a different name. Plus, the official Nike products had fewer reviews, and therefore received worse positioning on the site.
Leaving Amazon will not necessarily solve Nike's problems, which represent a big brand struggling to adapt to selling products in the digital age, said Mr James Thomson, a former Amazon employee who now helps brands sell products online through Buy Box Experts.
"Just because Nike walks away from Amazon doesn't mean its products walk away from Amazon and doesn't mean its brand problems disappear," Mr Thomson said.
"Even if every single Nike product isn't on Amazon, there will be enough of a selection that someone looking for Nike on Amazon will find something to buy."
BLOOMBERG
