Fadeaway: Nike’s latest pivot is bad for brick-and- mortar retail

Nike announced it’s ending partnerships with brands totalling ~1k stores. What does this say about the apparel giant’s strategy road map?

The $139B sports apparel megabrand recently announced that it’s cutting loose some of its strategic partners.

Nike Logo

The partners — which include retailers like Dillards, Belk, Boscov’s, and Fred Meyer — collectively represent ~1k physical stores.

Nike wants 50% of its sales to be digital 

Experts say it’s a feasible goal. The company is already on pace to hit 30% by the end of 2021, 2 years earlier than originally planned.

Over the past quarter, Nike’s digital sales have surged by 75% — even as its overall revenues declined 38%. This has largely been aided by the company’s app presence:

  • The Nike commerce app has had 8m+ downloads since February.
  • The brand’s SNKRS app scored $1B last fiscal year.
  • Nike-branded training apps have seen up to a 100% increase in usage during the quarantine.

Last year, Nike shunned Amazon…

Now, the company is shunning Zappos — all in an effort to regain control of its brand and inventory.

Shops like DICK’S Sporting Goods, Nordstrom, and Foot Locker — who are digital savvy and tend to be more coachable on product display and promotion — were able to make the cut.

According to the bankruptcy newsletter Petition, the trickle down could be devastating for mid-tier malls. They house many of the retailers Nike is leaving behind and are already in pain.

Related Articles

Get the 5-minute news brief keeping 2.5M+ innovators in the loop. Always free. 100% fresh. No bullsh*t.