Amazon: Nike Pulls Out of Amazon…. Leads to a poor consumer experience and results in a loss in market share.
On 11.13.19 Nike took a stance against Amazon, ceasing wholesale business to the online giant and exiting the two-year beta partnership. Placing its focus on Nike’s ID side of the business and leaving Amazon to 3p sellers.
On their bottom line, this looks healthy to Nike, but they are neglecting how this will impact their online customer experience and overall market share. If a brand is not focusing on Amazon, they leave the entire consumer experience up to 3p sellers. If you have assigned one to manage everything for you then you can have faith that you will be represented effectively, but if not, you will end up creating a negative environment for all of your Amazon consumers. Here are some of the major impacts:
- Poor catalog structuring: You won’t have the ability to click one product, see all the sizes and colors.
- Inventory nightmares: All inventory is in the hands of 3P sellers. This means that if they decide not to purchase specific styles or new/unproven products that these items will be completely absent from the platform.
- Ineffective representation: Not focusing on Amazon means that you allow potentially thousands of others to represent your brand. Imagery will not be accurate, copy will talk about the wrong products, and their conversion rate will plummet.
- Brand integrity: Lacking focus on the channel will lead to price wars and counterfeit items.
Consumer experience is key for not only creating new customers but also maintaining a loyal consumer base. Monster brands are investing heavily in Amazon to ensure that all their customers have an exceptional experience on Amazon. Nike is going in the opposite direction.
Without a strategy, they will only make it easier for brands like Under Armor, Adidas, and Reebok to consume their piece of the market. This will lead to a reduction in their loyal consumer base and force Nike out of its position as an industry leader in athletic wear.
Rest assured SellerSlice is here to help all brands! We have handled brands of their position and size (KraftHeinz) , and we recommend outsourcing Marketplace Management to a team. Our chief focus is driving Amazon and other platforms, optimizing the consumer experience and ensuring the brand is being represented effectively.