Following Nike‘s most recent example, Ikea too has withdrawn from Amazon‘s marketplace. Some analysts see this as a very smart decision, others point to its dangers…
Amazon not needed
Nike announced last week that it would stop selling its products directly through Amazon, putting an end to a two-year collaboration. The sports brand stated that it wanted to place greater emphasis on a “direct and personal relationship with the customer”, but what it actually meant was that Nike does not need the American marketplace.
Another retail giant, Ikea, has now also ended a similar agreement with Amazon, the BBC reports. The Swedish furniture chain had been selling smaller items, such as kitchen utensils and lamps, via the marketplace in the United States on a trial basis, but the experiment has now been discontinued. It is not yet clear why the arrangement has come to an end.
Control
Research director Maureen Hinton of Global Data sees a clear reason for Nike’s decision: “It’s a case of Nike wanting complete control of its brand”. Eric Heller from the WPP Amazon Centre of Excellence told The Drum that Nike’s decision may however end up having the opposite effect and gives the example of Birkenstock, which decided to stop selling their shoes directly on Amazon three years ago. “Birkenstock is the best example of what will happen to Nike. A search on Amazon for Birkenstock Arizona – one type of shoe – shows 601 results. This is what happens on Amazon when you pull off.”
Jefferies analyst Randy Konik, on the other hand, thinks that the example set by Ikea and Nike will be followed by other big brands. “The move shows us that strong brands realize that traffic driven to their own site (e.g. Nike.com) is self-sustaining, more profitable, and actually brand-enhancing, while traffic and incremental revenue from Amazon.com is less profitable but also less brand enhancing. We believe many strong apparel (and even non-apparel) brands will continue to avoid or curb their relationships with Amazon in the future.”
