Nike’s idea to include Amazon in its marketing process indicates that it’s big time to think about the sporting goods retailers and the market. Nike has already come up with a pilot program that can help it to sell its products through Amazon. In a way, this paves a direct link to its customers, without the need for any retailers. A deeper relationship with the online retailers!
And there are chances the sporting retailers like Foot Locker Inc might lose their clients because of this newly decided deal. There are already reports on market shares for sporting retailers as their shares have reduced - Foot Locker Inc by nearly 2%, Hibbett Sports Inc by 6.8% and Big 5 Sporting Goods Inc by 5.3%. The deal – which is expected to help Nike Inc weed out counterfeit products sold through unlicensed dealers online and give it more control over its distribution – lifted the company's shares to a more than three-month high on June 30. But Nike still depends on the wholesale channel for two-thirds of its revenue and will be cautious about making any drastic shift to selling directly on Amazon, said John Zolidis, analyst at Quo Vadis Capital Inc. So the company is expected to unload more of its products on Amazon to balance this. With the direct deal with Amazon the company’s profit is expected to increase and it can make an additional US$300mil (RM1.28bil) to US$500mil (RM2.14bil) of revenue in the United States, says reports.