Many of the world's biggest sports shoe manufacturing brands suffer from the menace of counterfeit products that are sold online in their name and, in that regard, Nike is no exception. However, according to a Bloomberg report, the company has decided to now sell directly to customers through a brand registry with Amazon. The company is going to sell its product through Amazon directly.
A bold step
Nike had already earmarked direct sales to their customers as a means of boosting sales figures earlier this month and it seems that they have stumbled upon the perfect solution.
A tie-up with Amazon, perhaps the most influential Online Retail platform in existence, will give the company the opportunity to sell authentic Nike Shoes directly to customers and, also, cut out those retailers who deal in Nike knockoffs.
Nike is one of the most recognizable brands globally and its shoes are probably its most popular product, which is why the market for counterfeit Nike shoes on online platforms has grown over the years. The counterfeit shoes cause Nike not only to lose out on sales but on the company's image as well. Bloomberg spoke to an individual who is close to the developments regarding the tie-up and reported that the collaboration between the two companies has not been made public yet.
Change of strategy
Earlier in the week, Nike had announced that they were going to aggressively pursue different avenues in order to boost direct sales to their customers, and the imminent tie-up with Amazon looks like the first step towards achieving such a goal. It is interesting to note that, as soon as the news of the tie-up hit the news wires, the stocks of Nike's competitors such as Foot Locker Inc, Finish Line Inc and Sports Direct International Plc showed significant declines.
Goldman analyst Lindsay Drucker Mann pointed out that the tie-up could eventually push Nike's revenue up by 1% and that would be a huge increase. Nike recorded revenue growth of 5% in 2017. Moreover, Nike's competitors like Under Armour are already on Amazon in a similar arrangement and it is definitely the right time for one of the world's largest sports goods companies to do the same.
