Will Nike Return to Amazon? Key Takeaways for Other Brands

Even the most iconic brands face unexpected challenges in ecommerce. Nike, a global leader in athletic wear, made headlines in 2019 when it decided to part ways with Amazon, leaving many industry experts and consumers puzzled. This bold move sparked debates about brand control, market strategy, and the future of retail.

As speculation rises about Nike's potential return to the platform, it's time to dive deep into this intriguing saga. What lessons can other brands learn from Nike’s tumultuous journey with Amazon? Join us as we unravel the compelling story of Nike and Amazon, exploring key insights that could reshape your e-commerce strategy.

The Breakup

It was in November 2019 when Nike decided to stop selling directly on Amazon after a two-year pilot program. Several factors contributed to this decision:

Control Over Brand and Customer Experience: Nike aimed to elevate consumer experiences by fostering more direct and personal relationships with its customers. Nike believes this could maintain better control over its brand presentation and customer service.

Counterfeit and Unauthorized Sales: Despite the partnership, Nike was dissatisfied with the proliferation of counterfeit and unauthorized products on Amazon. The deal with Amazon did not significantly reduce these issues, leading to frustration and the decision to pull out.

Shift to Direct-to-Consumer (DTC) Sales: Nike had been increasingly successful with its direct-to-consumer strategy. The COVID-19 pandemic accelerated this shift, with Nike's e-commerce sales growing significantly. This success reduced their dependency on Amazon, and it seemed more advantageous to focus on their own platforms.

Pilot Program Limitations: The pilot program with Amazon was limited in scope and did not include Nike's full catalog. The overall results did not meet Nike's expectations, further supporting their decision to end the partnership.

These factors collectively motivated Nike to prioritize its own sales channels over Amazon, aiming for better brand control and enhanced customer experiences. But was this a smart move?

The Aftermath

Nike decided to stop selling directly on Amazon because it intended to regain control over its brand image and combat the proliferation of counterfeit goods. However, this move may have inadvertently empowered unauthorized sellers. These sellers continued to thrive, filling the void left by Nike with products that often did not meet the company's quality standards.

Brands competing with Nike seized the opportunity to capture market share, often using aggressive pricing and marketing strategies. These competitors, both legitimate brands and unauthorized sellers, capitalized on the search traffic and customer demand that remained robust on Amazon for Nike products. Despite not being officially sold by Nike, these products continued to be sought after, leading to a vibrant but uncontrolled marketplace for Nike goods on Amazon.

Speculation About Nike’s Return

In a LinkedIn post, Sean Walsh, a Director at Pattern International, speculated that Nike would return to Amazon within 18 months. He pointed out that Nike's controlled DTC strategy isn't delivering the expected rewards, especially after the temporary boost during the pandemic. Walsh noted that the significant decline in Nike's market value and flat results in 2024 could drive Nike to leverage Amazon’s vast reach to stabilize and grow its market presence.

Moreover, Incrementum Digital CEO Liran Hirschkorn noted that Nike's share price recently declined by 20%, compounded by expected year-over-year declines in profit and revenue. He pointed out that Nike never truly left Amazon because, between June 2023 and May 2024, the brand made over $780 million in sales on the platform. Except they are all from unauthorized sellers. This gap resulted in inconsistent pricing, branding, and customer service, underscoring the hard lesson that withdrawing from major marketplaces only leads to a loss of control.

On the other hand, Dean McElwee, an eCommerce Director at Stanley Black & Decker, Inc., emphasized that Nike did not completely exit marketplaces and continues to be present on platforms like Zalando. He also noted that Nike's challenges extend beyond not selling on Amazon, with increased competitor pressure and strategic exits from wholesale partners like Foot Locker and DSW. McElwee pointed out that Nike has hired executives with significant marketplace experience, including a former Amazon Fashion executive now serving as their Chief Technology Officer.

Other analysts have noted that Nike's decision to pull back from Amazon has led to challenges in controlling its brand image and combating counterfeit products. According to Marketplace Pulse, the proliferation of unauthorized sellers and counterfeit goods has continued, impacting Nike's brand integrity.?

Could returning to Amazon help Nike regain control over its brand presence and market share?

Why Returning Can Be a Strategic Move

Nike's potential return to Amazon offers several strategic advantages that can significantly enhance its market position. For instance, Nike would gain access to its extensive customer base, especially its over 180 million Prime subscribers. This could broaden Nike's reach and attract new customers, helping the company recover from its recent 20% stock plunge and regain market share. Leveraging Amazon's platform can also aid in addressing consumer concerns about high prices and increase Nike's competitive edge in a challenging retail environment.

Furthermore, re-establishing a direct relationship with Amazon would allow Nike to regain control over its product listings and the overall customer experience. With an established Amazon Brand Registry, Nike can better protect its brand from counterfeit products and unauthorized sellers. This would help maintain the integrity of Nike's brand and ensure that customers receive genuine products.

Apart from the Amazon Brand Registry, Amazon's Counterfeit Crimes Unit (CCU) has made significant strides in combating counterfeit goods, including legal actions, product seizures, and criminal prosecutions. The CCU's global investigations and technological advancements enhance the detection and removal of counterfeit listings.

For Nike, partnering with Amazon would mean leveraging these robust anti-counterfeit measures, thereby better protecting its brand and ensuring customers receive genuine products. This collaboration would help maintain Nike's brand integrity and improve customer trust.

So what can brand owners and ecommerce leaders learn from all this?

Lessons for Other Brands

Brands face a multitude of challenges that demand innovative strategies and adaptable approaches, and Nike's journey is a prime example. Here are some key lessons from Nike's experience with Amazon that you can consider to help strengthen your brand’s approach to e-commerce:

Maintain Brand Presence

Effective management of product listings and customer experience is essential to compete with unauthorized sellers and counterfeit products. By maintaining a direct presence on major platforms like Amazon, brands can ensure better control over how their products are presented, priced, and promoted, which helps in building and maintaining customer trust. To achieve this on Amazon:

Register Your Brand: Enroll in Amazon Brand Registry to gain greater control over your product listings and enhance your brand’s presence. Amazon Brand Registry provides access to powerful tools to protect your brand from counterfeiters and unauthorized sellers. This includes the use of proprietary text and image search tools to find and report violations, ensuring that your brand’s integrity is maintained.

Monitor Listings Regularly: Use Amazon’s Brand Dashboard and Listing Quality Dashboard to keep your product listings accurate and up-to-date. These tools help identify and fix listing issues, optimize content, and enhance product visibility.

Respond to Customer Feedback: Use the Customer Reviews tool in Seller Central to track new reviews of your products. Set up notifications to stay updated. Then engage with your customers by responding to their reviews. You can even consider using third-party tools to automate review tracking and responses, ensuring you never miss an important customer comment.

Partner Strategically

Collaborating with platforms like Amazon can significantly enhance market reach and brand control. Brands can tap into Amazon’s extensive customer base and infrastructure, which helps expand their market presence without compromising on quality and service standards. To maximize the benefits of this partnership:

Leverage Amazon's Infrastructure: Use Amazon’s logistics, customer service, and advertising tools to reach a broader audience efficiently. Fulfillment by Amazon (FBA) ensures fast and reliable shipping, handling everything from warehousing to customer returns.

Optimize Listings: Ensure your listings include high-quality images that showcase your product from multiple angles and in use. Write detailed and accurate descriptions highlighting key features and benefits. Use relevant keywords in your titles, bullet points, and descriptions to improve search ranking. Regularly update your listings based on customer feedback and performance metrics to keep them competitive.

Engage in Amazon Programs: Participating in Amazon programs like Amazon Prime can significantly enhance your customers' shopping experience. By enrolling in Prime, your products become eligible for Prime's fast and free two-day shipping, attracting millions of loyal Prime members. If applicable to your catalog, consider using Amazon Subscribe & Save to offer recurring delivery options for consumable products, increasing customer retention and steady sales.

Maximize Anti-Counterfeit Measures

Utilizing Amazon's resources, such as the Counterfeit Crimes Unit (CCU), helps protect brand integrity and ensure genuine products reach customers. The CCU’s efforts in legal actions, product seizures, and global investigations provide an additional layer of security against counterfeit products. To leverage these resources:

Enroll in Project Zero: By enrolling for free in Amazon’s Project Zero, you gain access to automated protections and serialization to remove counterfeit listings proactively. Project Zero leverages advanced machine learning to continuously scan Amazon's stores and automatically remove suspected counterfeit listings. Additionally, you can use a unique serialization service, where each unit you manufacture is assigned a unique code, allowing Amazon to scan and verify the authenticity of every product sold.

Report Counterfeits: To protect your brand, report alleged counterfeit or intellectual property violations through Amazon’s Brand Registry or directly to the Counterfeit Crimes Unit (CCU). The Brand Registry provides a user-friendly interface to submit and track claims of counterfeit listings, ensuring swift action. The CCU offers dedicated support, allowing you to escalate serious violations for comprehensive investigation and enforcement, thus safeguarding your brand and products from infringers.

Collaborate with the CCU: Collaborating with Amazon's Counterfeit Crimes Unit (CCU) enhances your efforts to combat counterfeit activities effectively. The CCU works closely with brands to pursue legal actions, seize counterfeit products, and conduct global investigations.

For more detailed information on enhancing your brand's control and combating counterfeit products, refer to Amazon’s Brand Protection Report and the Counterfeit Crimes Unit FAQ. Staying adaptable and proactive will empower brands to meet customer expectations and stand out in a competitive environment.

Conclusion

Nike’s story is far from over, and its next moves could redefine e-commerce strategies for brands worldwide. Stay tuned and watch closely as Nike navigates its potential return to Amazon, providing even more valuable insights into effective brand management and marketplace engagement. Learn from their journey, apply these lessons to your strategies, and be ready to adapt as the e-commerce landscape evolves.

For powerful insights and proven strategies to dominate the online marketplace, check out our exclusive interviews with Andrew Freeman and Vivek Rastogi of Colgate-Palmolive.

Eager to tap into Amazon's vast Prime member customer base and offer free, fast shipping on your DTC shopping site? Discover how in our exclusive interview with Amazon's Derek Majewski on the power of Buy With Prime.