Nike, one of the most searched brands on Amazon, will stop selling its products directly on Amazon, ending a pilot program that began in 2017. To avoid losing the Nike assortment, Amazon has been recruiting third-party sellers with Nike products so that the merchandise is still available on the site.
More than three-quarters of Amazon searches are unbranded, seeking for generic products rather than name brands. 78% of keyword searches done on Amazon are for generic goods, and do not include a brand name. Nike is one of the few brands shoppers do search for explicitly, however. “Nike shoes men,” “nike shoes women,” “nike shoes,” “nike socks,” and “nike” are in the top 1000 most-searched terms on Amazon. There are only a handful of more searched brands on the site, like Apple and Nintendo.
Despite significant demand from Amazon shoppers, the pilot program that began in 2017 only brought a limited selection of Nike products to Amazon. Men’s Shoes category on Nike.com has 741 results, but only 28 on Amazon and Women’s Shoes has 18 on Amazon compared to 490 on Nike.com. Both Amazon and Nike didn’t appear to put much effort into the brand’s experience on Amazon either, with most product pages and the brand store lacking elements competing brands have implemented. For Nike, the most critical part was controlling unauthorized third-party sellers.
There are more than 4,000 third-party sellers on Amazon listing some products from Nike brand for sale at this moment. A number that hasn’t decreased to as low as Nike expected out of the relationship with Amazon. Nike only agreed to the pilot in 2017 in exchange for Amazon policing counterfeit and third-party sales. “For years, Nike had refused to sell directly to Amazon, fearing it would undermine its brand. Nike executives were unhappy with how unauthorized sellers continued to be widely available on Amazon, according to people familiar with the matter,” wrote Khadeeja Safdar at the Wall Street Journal.
According to two people familiar with the matter Bloomberg talked to, Amazon has been preparing for the split. The company has been recruiting third-party sellers with Nike products so that the merchandise is still available on the site. Searches for “nike shoes men” already return over 10,000 products, only 335 of which are sold by Amazon (and thus sold by Nike directly), and out of 1,000 results for “nike socks,” only 135 are sold by Amazon.
Nike now says it brings in about 30% of annual sales from its direct-to-consumer business. It wants to grow that more - it has been opening more flagship stores as well as investing in its website and apps. “We will continue to invest in strong, distinctive partnerships for Nike with other retailers and platforms to seamlessly serve our consumers globally,” Nike said in a statement. Nike doesn’t need Amazon as much as Amazon needs the brand.
Shoppers will continue to search for Nike products on Amazon, oblivious to Nike’s decision to stop selling directly on Amazon. For them, shopping for Nike products on Amazon was a poor experience before, due to limited assortment sold by Nike directly and the thousands of third-party sellers, and it probably only got worse now.
As brands build out their websites and apps, as well as improve shipping times, the only reason why shoppers still search on Amazon is that that’s what they are used to. The tyranny of Amazon convenience - people don’t want to wait, and they don’t want to think. This two-year pilot was the most important for Amazon. It failed and now is back in the position of shoppers buying Nike products on Amazon because they didn’t think of opening the Nike app. Long-term that’s not going to hold. Amazon is severely lacking in becoming a home for brands, and because of that, it presents a worse shopping experience than brands can do themselves.
Amazon will keep most of the Nike assortment thanks to third-party sellers it was able to recruit. But in no way, since 2017, did the shopping experience of buying Nike products on Amazon improve. It’s still up to the shopper to sort through thousands of results to figure out what they exactly want and hope it’s not a counterfeit. Or they can jump to using the Nike website or app, which have improved and have a great shopping experience.