Nike is breaking up with Amazon. And the main concern is, other brands might follow the company. As per Randy Konik, Jefferies Analyst, ” Brands don’t need Amazon. Amazon had a delivery speed advantage, but that advantage has compressed. With Nike leaving Amazon platform… it strengthens our view that retailers and brands won’t be displaced by Amazon.”
Nike is following a new strategy for the marketing of their products. After the arrival of their new CEO, John Donahoe they are focusing on the elevation of consumer behavior. The analyst continued by saying, “The move shows us that strong brands realize that traffic is driven to their own site example Nike.com is self-sustaining, more profitable, and actually brand-enhancing, while traffic and incremental revenue from Amazon.com is less profitable but also less brand enhancing.”
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Amazon has been working on becoming a bigger name in the fashion world. The company has already contacted influencers to promote their brands ahead of the sales. Brands like Calvin Klein, Seras, Chico’s, Nike, etc are courted by Amazon. But the decision of Nike to leave the company can influence other brands to cut off from the e-commerce giant. As said by the analyst Randy Konik, “We believe much strong apparel and even non-apparel brands will continue to avoid or curb their relationships with Amazon in the future.”
The retail business contributes to 68% of the company’s whole business and if these brands started following Nike in the decision of leaving Amazon, then this will affect Amazon entirely.