Nike has announced that it will be pulling out all of its sneakers and clothing products from Amazon's online shopping platform this week.
The company stated that this will be part of its termination of a pilot program it had started on the e-commerce website since 2017.
The move to remove all of its products from Amazon is part of the company's new overhaul efforts under its new CEO John Donahoe. Nike originally announced in October that it had named Donahoe as its next CEO, replacing its current chief executive, Mark Parker. Donahoe will officially replace Parker as the company's CEO on January 13, 2020.
The company's marketing and retail strategy overhaul are apparently aimed at transforming its customer's buying experience to become more direct and personal. Nike stated that to achieve this goal, it had decided to complete its current pilot program with Amazon.
Under the pilot program, Amazon was allowed to purchase products directly from Nike, as opposed to buying them from third party suppliers. The program was launched as a countermeasure against a number of third-party resellers on the e-commerce website, which were ruining their brand by selling fake merchandise.
Amazon's partnership with Nike and the program that resulted from it was the retailer's way of expanding its platform by striking direct-selling agreements with major vendors. However, Nike apparently did not have much success in controlling the spread of counterfeit goods on the platforms throughout the pilot program's run. Amazon did do its part in removing third-party sellers posting counterfeit products, but its efforts were ultimately futile.
In response to Nike's decision, Amazon stated that it will be working on further developing its network of verified third-party sellers to make sure that its customers will still be able to buy Nike products on its platform. According to reports citing sources close to the matter, Amazon has apparently been preparing for such a situation and had already laid out backup plans for Nike's exit.
Since 2013, Nike has been trying to take advantage of the new online trend by selling its products directly on its own sites. This strategy proved to be very successful and has tripled the company's sales ever since. Despite its success online, sales on the company's physical retail stores still account for about 68 percent of its total revenues.
To merge the best of both worlds, Nike has significantly transformed its stores to include new high-tech features such as the integration of its SNKRS app, rewards points, and even shoe vending machines.
