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As Nike tightens control, its swoosh may disappear from some retailers’ shelves
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You may not be seeing Nike products for sale much longer by some major retailers, both the brick-and-mortar variety — VIM, Belk and Dillard’s among them — and online, like Zappos.com. The athletic wear manufacturer is reportedly cutting off a total of nine retailers. It’s part of Nike’s recent strategy of taking tighter control over the sale of its products and selling more directly to consumers.
Nike is trying to sell its gear and make its customers feel special, like LeBron James or Serena Williams. Sam Poser, an analyst at Susquehanna Financial Group, said the stores Nike is dropping “were selling Nike product, but they weren’t a place that were really doing something to enhance the Nike brand.”
Nike wouldn’t confirm or deny that it’s cutting the stores accounts. But the company did say it’s “doubling down” with “strategic partners.” Poser said that means retailers with splashy Nike displays.
The company is also doubling down on its digital approach. Last year, Nike cut ties with Amazon, in part so that it could collect its own data on customers.
“They’re going to know basically everything they want to know about a consumer, which might be information that was kept close to the chest by retailers,” said Jeff Galak, a marketing professor at Carnegie Mellon. “Now Nike has control of that data.”
Taking control is the bottom line, according to Matt Powell, a sports industry adviser with The NPD Group.
“They are able to control their message, they’re able to control the product, show the product in the way they want it shown, and to some extent have an impact on pricing,” Powell said.
With so many brick-and-mortar stores closing, Camilla Yanushevksy, an analyst at CFRA Research, said this is also a great way for Nike “to protect themself from shrinking revenues that are already going to occur.”
Nike’s not the only brand that’s taking more control, Yanushevksy said. Ralph Lauren, Skechers and others are doing the same thing.
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