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Nike's are increasingly difficult to find in stores. This is the reason

2021-03-23T19:31:38.521Z


Nike is driving sales further through its own channels and is withdrawing its products from other local stores.


Nike makes it harder to get their shoes in stores.

Know why 0:50

New York (CNN Business) -

Having trouble finding Nike shoes at local stores in your neighborhood?

It is due to your new strategy.

Nike wants customers to buy more shoes, clothing and gear in Nike stores and on Nike.com and its apps, as well as a more limited group of retailers like Dick's Sporting Goods and Foot Locker.

Therefore, in recent years, the company has drastically reduced the number of traditional retailers it sells its products to, while also shifting to grow directly through its own channels, especially online.

That has affected retailers large and small.

In addition to pulling out of some independently owned stores, Nike also ended an Amazon sales partnership in 2019. Nike has not disclosed which retailers it has specifically cut ties with.

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The company's departure from a primarily wholesale distribution model is a departure from Nike's early decades.

Small, independent shoe retailers were key to growing Nike's popularity in the company's early days, when people learned about upcoming shoe launches by visiting local stores.

But Nike has said it can make more than twice the profit selling products through its own website and physical stores than through wholesale partners.

Nike can more closely control the shopper experience and the prices at which products are sold when they go directly to consumers.

That's a big problem for Nike, a

premium

brand

that wants to make sure merchandise is displayed to customers in an attractive way and to avoid products being heavily discounted.

advertising

Nike is eliminating what it calls "undifferentiated" retail partners - stores that "put Nike stuff on their shelves or websites and wait for someone to find it," said Sam Poser, an analyst at Williams Trading who covers the company.

Nike is "telling retailers that unless they do things that improve the brand, we are not going to sell them."

In September, Ed Shaen, the owner of Sneakin 'In, a sports shoe store in Bellmawr, NJ, received a letter in the mail from Nike saying his account would be closed after 37 years.

I have the letter hanging on the wall.

Right next to the trophy [Nike] gave me for being a great distributor ”in 1992, he said.

Shaen said Nike accounts for more than half of its sales.

The end of the partnership with Nike, coupled with the crippling impact of the pandemic, will likely lead to it closing the store by the end of the year, he said.

"My loyalty to Nike meant nothing," Shaen said.

"Now it is a direct service to the consumer."

Sandra Carreon-John, a Nike spokeswoman, did not comment directly on Shaen's account, but said in an email that the company "continually assesses the market to understand how we best serve consumers, making adjustments to our sales channels, based on necessary to create a consistent, connected and modern shopping experience.

Nike reviews more than 4,000 hours of images for ad 0:48

"We take risks with them"

Nike CFO Matthew Friend said in December that Nike has "reduced the number of undifferentiated accounts in North America by approximately 30%" since it first announced the strategy in 2017, when Nike said it would focus its resources.

Premium

products

,

marketing

and products from just 40 select retail partners.

"You will see even more movement from undifferentiated retail to fewer partners and our own stores" that offer customers a "

premium

experience

," Chief Executive John Donahue told analysts on Thursday.

Such experiences include building a specific section of a Nike-branded store, or having dedicated Nike employees specially trained to help consumers understand the benefits of a running shoe, for example: efforts that improve the customer experience. , but which are often cost prohibitive for independent sneaker dealers.

Rivals Under Armor and Adidas are following Nike's lead and also reducing the number of retail partners they trust as direct-to-consumer sales increase.

"We are exiting thousands of non-strategic wholesale accounts, particularly in the US, to win with the winners," Adidas CEO Kasper Rorsted said in November.

Under Armor CFO David Bergman said last month that the company "will begin to exit some undifferentiated wholesale distribution, primarily in North America, beginning in the second half of 2021."

The plan calls for Under Armor to recall 2,000 to 3,000 outside retail stores.

Losing Nike or other popular sports brands can be a serious blow to shoe stores and clothing retailers.

Nike is a huge draw for customers, and without the brand, stores can struggle to compete.

Nike also owns the Jordan and Converse brands.

L&L Shoes in Palestine, Texas, sold Nike for decades, and the brand accounted for about 70% of the store's athletic shoe sales.

But in 2019, Nike "sent us a letter in the mail telling us that we are no longer meeting their distribution targets," said owner Marty Nash.

"We haven't been able to get Nikes since."

"It hurt me in a way because there are many people who are dedicated to that brand," he said.

"I thought it was pretty dirty because we were buying them out of the back of a car" in the 1970s from Nike salespeople trying to get independent stores to buy sneakers.

Carreon-John, the Nike spokesman, did not comment directly on Nash's account.

Nash feels that he helped Nike reach consumers when it was still an emerging brand and the company had given up on small stores like his.

"We take a chance with them."

- Clare Duffy of CNN Business contributed to this article.

Nike

Source: cnnespanol

All news articles on 2021-03-23

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