Just last week, Nike and Amazon announced a mega partnership. If you missed the news: an analyst at Goldman on Wednesday hinted that Nike is considering selling its products directly on Amazon. Nike was previously only available on the retail giant’s platform through third-party sellers. On the heels of Amazon’s multitude of recent moves, this alignment points to the company’s Prime Wardrobe beta launch and an even bigger push into the garment arena as a direct partner for mega brands.
According to another survey cited by a Forbes story, Amazon is the primary retail destination for male millennials. Their one beef? They can’t buy Nike products from the source, exposing them to the maze of third party sellers and, potentially, fakes. Nike can now lure customers away from counterfeit products and reap more sales for their own bottom line. This will likely result in a big revenue boost for the ubiquitous athletic shoe company, increasing its revenue (estimated) from $300 to $500 million annually.
Amazon has already made big plays in the online shoe space, especially when it bought up Zappos in 2009. That merger pointed to a significant paradigm shift in online retail. Zappos was an early adopter of free shipping for customer returns. It gave its loyal fans flexibility by reducing the risk of buying an unknown style or brand, and built a shoe empire on the promise of perks. (Zappos also did something Amazon would later mimic with its Prime product: it gave VIP customers free overnight shipping on all purchases.)
The world’s largest online department store has consistently been forward-thinking when it comes to brand partnerships. Other big names, like Calvin Klein and Lacoste, have already announced coming on board. Amazon’s private-label plans point even further into its future aspirations in the world of garments and fashion. This continues to pose a challenge for other retailers who have been slow to adapt to mobile shopping, cheaper shipping/return choices, and availability of in-store pickups.
Amazon has all the flexibility that physical stores don’t. Its notable takeover of books, music, consumer electronics and, of course, groceries is going to make it even harder for suffering retailers to keep up with them. Nike is making a smart decision: direct partnership means better brand management, massive control over their customer experience and more exposure to mobile shopping (which millennials do in higher numbers than any other demo). What customers, and the increasingly important millennial buyers, want is choice. Amazon has always given choice to its customers in spades. Now, some forward-looking folks at Nike have smartly done the same thing.