Nike will stop selling its products on Amazon, according to a company statement emailed to Retail Dive, though the retailer will continue to use Amazon Web Services for its website and mobile apps. Bloomberg first reported the news.
"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," a Nike spokesperson told Retail Dive in an email.
The decision ends a two-year pilot with Amazon, which began as a means to prevent counterfeit Nike products from being sold on the marketplace.
Whether or not to sell on Amazon is a contentious issue for brands. Top among brand concerns are issues with brand integrity and lack of control. The marketplace has struggled with counterfeits for years and just this October had multiple of its sites flagged by the American Apparel & Footwear Association as "notorious markets" in the hopes that the U.S. Trade Representative's office would identify them as such.
"NKE cares more about brand presentation than consumer reach," Wells Fargo analysts wrote in an emailed note, adding that they don't need distribution "just for the sake of distribution."
"Simply put, AMZN didn't fill a clear 'need' in NKE's distribution strategy, given the efforts that NKE has made on the digital side with compelling online platforms," they wrote.
Indeed, the sportswear brand has been all about its Nike Direct strategy in recent quarters, posting huge gains in digital and strong performance from loyal customers. In the brand's last quarter, digital grew by 42% and app members drove over 50% of Nike Direct digital growth. Executives said at the end of last year that digital has the potential to be "the majority of our business."
In its statement announcing the break with Amazon, Nike said it would continue to pursue other partnership relationships. "We will continue to invest in strong, distinctive partnerships for Nike with other retailers and platforms to seamlessly serve our consumers globally," a Nike spokesperson said. That includes strong partnerships with Dick's Sporting Goods and Foot Locker, the latter of which has deepened to include joint store concepts and integrations with Nike's mobile app.
In addition to targeting the right distribution partners, Nike has also been slimming its portfolio, selling off surfwear brand Hurley in October to focus on the core business through its Consumer Direct Offense.
Analysts tended to agree that the main reason for the breakup was that Nike's brand wasn't being presented on Amazon the way it strives to be elsewhere, but a note from Telsey Advisory Group also pointed out that Nike didn't have that many products available on Amazon anyway.
"Specifically, in our sample of 80 items for each brand, only 21% of Nike products were available on Amazon vs. 65% for adidas and 64% for Under Armour," the group wrote. "In addition, adidas and Under Armour both had a store front on Amazon, while Nike did not."
They also pointed out that Nike still has a partnership with Walmart's Jet.com, though it remains to be seen if working with the slightly more upscale marketplace will be a better fit for Nike's brand ambitions.