Nike vs. Amazon - Brands vs. Sellers
Lots of coverage on Nike’s break-up with Amazon last week:
- Nike Retail Chief on Amazon Split: We Want ‘Premium Experiences’ (Bloomberg)
- Nike just ‘tip of the iceberg’ of companies ditching Amazon and selling directly to consumers (CNBC)
- Nike Cuts Ties With Amazon, but Shoes Won’t Vanish From Site (NYT)
One thing that jumped out to me here is if you look at Amazon’s flywheel diagram, it highlights “sellers,” not “brands.” The Amazon model is great for books, music, and CDs because book sellers can’t compete on much except for selection and price, since books are commodities. But it doesn’t work very well for companies that are selling a brand.
Obviously every company wants a premium for their brand, direct customer relationships, and the ability to reach a large audience, but there are trade-offs to get all three, so it will be interesting to see which brands continue to partner with Amazon and which ones go their own way.
Here’s one compelling perspective from Emily Weiss, CEO of Glossier, on their decision to not sell products into Amazon:
“The interesting thing about Amazon and how they’ve addressed obviously one of the biggest consumer needs, which is solving buying, is that in the process, in some ways, they’ve kind of killed shopping.”
“When you look at a platform like Amazon, no woman has ever told me that their criteria for best mascara was what was fastest or cheapest. That’s not how people are buying emotional things – like a fashion or beauty product. But the leading paradigm of what an e-commerce experience gives you is one of efficiency, and one of breadth of product. When what users are actually doing and wanting is one of breadth of connection”