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Newsletter: Nike tells Amazon, ‘I’m just not that into you’

Nike FlyKnit
The sportswear giant says it will pull its products — from shoes to jerseys — from the e-commerce behemoth because it wants to create its own direct ties to online shoppers.
(Nike)

I’m Business columnist David Lazarus, with a look today at online sales, particularly those of a certain sneaker maker.

Nike announced last week that it will pull its products — from shoes to jerseys — from Amazon’s site because it wants to create its own direct ties to online shoppers.

“As part of Nike’s focus on elevating consumer experiences through more direct, personal relationships, we have made the decision to complete our current pilot with Amazon Retail,” the company said in a statement.

“We will continue to invest in strong, distinctive partnerships for Nike with other retailers and platforms to seamlessly serve our consumers globally.”

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This raises an interesting question, especially for larger, well-funded brands: Do they follow Nike’s lead and also part ways with the House that Bezos Built?

Internet entrepreneur Tim Armstrong, formerly AOL’s chief executive, told CNBC that Nike pulling up stakes is the “tip of the iceberg” of companies deciding to exit Amazon’s cybermall.

“The direct-to-consumer movement will be the replacement for the retail issues and commerce issues that are going on because of the platforms,” he said. “If they have the option to go direct, they are going to go direct.”

I suspect Armstrong is exaggerating. To be sure, many big retailers are concerned about the proliferation of counterfeit goods on Amazon, and they’ve been saying for years that Team Bezos doesn’t do enough to police its digital store shelves.

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But let’s be honest — Amazon accounts for nearly half of all online sales in this country, and for good reason. It provides arguably the best e-commerce experience available. And if you’re a Prime member, you’re probably going to make the most of your annual subscription by giving Amazon as much of your business as possible.

So any brand that consciously uncouples from Amazon (as Gwyneth Paltrow might put it) is taking a big chance. Sure, it’s better to have a direct rapport with customers. But if those customers aren’t coming to your digital store, you’re just abandoning potential sales.

Besides, breaking up with Amazon is hard to do. Nike said it will continue using Amazon’s cloud-computing services for its apps and Nike.com transactions.

In related news, retail sales were higher than expected last month, rising a seasonally adjusted 0.3% from a month earlier, according to the Commerce Department. This is important because consumer spending accounts for about two-thirds of total U.S. economic activity.

It also suggests this holiday season will be a merry one for stores.

Now then, here are some recent stories that caught my eye:

STORY LINES:

Second life: You want a vintage hot rod. But you also want to be environmentally conscious. So why not rip the drivetrain out of a Tesla or a Nissan Leaf and put it inside that classic car of your dreams?

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Record report: The unemployment rate in California is at its lowest level in more than four decades thanks in part to growth in the education and health services sectors. At 3.9%, it’s as low as it has been since 1976, when the state adopted the current statistical methodology.

A real problem: Starting Oct. 1, 2020, you won’t be able to board a flight with just a driver’s license. But even though airlines are starting to book flights after that date, they aren’t doing much to warn passengers that they’ll need what’s known as a Real ID (or a passport or military ID).

WHAT WE’RE READING:

Fighting fakes?: Speaking of the problem of counterfeiting on Amazon, the Washington Post takes a close look at the issue, and concludes that the e-commerce giant prioritized the scale of its inventory over the authenticity of its products.

How esports works: The New York Times examines the multi-faceted esports organization that is Faze Clan, offering a glimpse inside an operation that focuses as much on gaming as it does on entertainment.

Let me know what you think of the newsletter. My email is david.lazarus@latimes.com, or you can find me on Twitter @Davidlaz. Also, tell all your social media pals to join the party.

Until next time, see you in the Business section.


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