Nike Bids Amazon Farewell, Partners With Zalando

When news broke at the tail end of 2019 that Nike was controversially ceasing its direct-sale agreement with Amazon, it raised a few eyebrows.

Despite Nike’s undeniable brand awareness and loyalty, Amazon is the world’s largest marketplace. It delivers unparalleled scale and offers brands significant global reach of addressable, retail-focused audiences that they might not otherwise be able to acquire or convert.

However, amidst a variety of counterfeit concerns, the desire to share more brand storytelling with customers and have a greater influence of the customer relationship, Nike instead focused its strategy around the development of its direct-to-consumer (DTC) business on Nike.com. Bold but understandable, the move has been corroborated by several other Amazon exits from premium pure-play brands now going it alone and emerging challengers focusing on DTC, notably sneaker-underdog All birds.

In light of the Amazon breakup, you could have thought that Nike decided to turn its back on marketplaces altogether; yet last week, Nike attracted significant interest at the NRF Big Show in New York after showcasing new successes of its direct-sale partnership with Zalando, a rapidly scaling European marketplace across 17 territories specialising in high street to high-end fashion.

CONCLUSIONS

At face value, the initial breakup back in November appeared to be a firm direction change, away from marketplaces as a whole. But Nike’s relationship with Tmall – a largescale eCommerce platform in China – and a revitalised relationship with Zalando prove that instead, the brand has taken a more selective approach to marketplace trading. The lesson for brands is to ensure alignment in capability and strategic values when selecting commerce partnerships, over blindly chasing scale.

Nike’s relationship with Zalando does indeed provide a blueprint of how brands can collaborate with retailers and marketplaces. In a world of fast-moving consumer goods and own-brand copycats, branding plays an integral part in consumer consideration as a key differentiator.

Retaining the ability to share meaningful stories and values with customers is therefore paramount in these circumstances, especially in eCommerce, which has evolved to facilitate the full funnel from awareness through to conversion, often as the only customer touchpoint.

It’s evident that the partnership isn’t solely based around these factors however; fulfilment capability is also key. Zalando will begin fulfilling online orders from local Nike stores to support same-day delivery in Berlin from Q2 2020 and click-and-collect customer propositions will follow. This will provide Nike with distinct in-market capability, allowing them to service customers at scale and pace, something even Amazon can’t immediately replicate.

Clearly, Zalando does indeed offer superior merchandising and presentation flexibility to its vendors, something we think will continue to play a significance as more consumer spend in fashion and lifestyle categories move online and brands look to be present in this space.

All eyes will remain on Amazon and how it evolves its customer experience and addresses concerns over third-party authenticity, particularly as it looks to expand into higher-ticket fashion and lifestyle categories with a higher dwell time, consideration phase and need for branded storytelling.

It may have the landscape dominated in functional categories like batteries and printer ink, but areas not dominated by price and convenience require a notable change of tact, capability and presentation.

Read the original article at Albawaba