When you decide to buy a supplement, or apparel, or some other product online, and you always purchase your favorite brand, do you log on to Amazon, or to your brand’s website? From the personal consumer perspective, our guess is that when choices of a particular brand need to be seen, the buyer will go to that brand’s website, and when shopping around, Amazon is the choice.
Recently Nike made the decision to no longer sell merchandise through Amazon. Their reasoning was made clear in an article posted by CNBC in which the advantages and disadvantages of selling through Amazon were discussed.
A quote from the article is as follows: “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.”
AMS fulfills direct-to-consumer products for many different retailers, including Amazon, and we fully serve all of our valued clients. Nonetheless, we do watch the trends with interest, as we know that in the end it is the consumer who decides where to make their purchase.
For the past few years Amazon has been criticized and questions have circulated – is Amazon getting too big. From an article in Wharton comes the following quote: “The company is the second-largest retailer in the United States behind Walmart, and last year it became the second company in the world to reach $1 trillion in market capitalization. Perhaps more significantly, it’s also one of the world’s largest tech companies, with reams of data collected from an enormous customer base. Amazon has sold 100 million units of its voice assistant, Alexa, and an equal number of Prime subscriptions. But is Amazon too big?”
The article goes on to discuss the various reasons for asking the question. It also points out that things are always changing, and rapidly.
As companies compete, consumers decide how they shop and from whom they buy. Not surprisingly, when we asked the ‘where do you shop’ question of a few typical 30-ish online shoppers, the answer came back, “It depends”. Some shoppers are looking for the best deal, some want to see all the styles of a certain brand, some want quality brand packaging, some factor delivery options into their shopping.
Nike has decided that it’s more beneficial to them to have a direct transaction with their customer, vs. selling through Amazon. They are betting on their ability to establish a relationship with their customers; how they are treated, what they see and what is advertised to them.
For many of our clients who sell directly, AMS handles the additional packaging necessary to give the ‘brand experience’. This means that the customer has the pleasure of opening a branded box with the contents beautifully arranged. Thoughtful packaging creates the kind of relationship with a customer that Nike is going for.
