Pranav Kosuri
Guest Article

What allowed Nike to ditch Amazon?

Nike recently announced its exit from the e-commerce platform as a first party vendor.

Brand loyalty - this frequently used term has many definitions, but at the end of the day it all boils down to building a dedicated fan base of repeat customers who closely identify with the core beliefs and values of your business. Customers need to feel as though they are part of an exclusive family or club that provides them with a shared sense of community, supported by an almost ritualistic behaviour when interacting with the brand. Generating brand loyalty and goodwill takes an enormous amount of effort. Despite the difficulty of such a task, a brand that has truly succeeded in building a devoted following is Nike.

Pranav Kosuri
Pranav Kosuri

Since the company was born in 1964, Nike has achieved unrivalled success, despite the existence of both established rivals a la Adidas and Reebok and newer entrants like Under Armour and Asics. As of 2018, Nike controlled approximately 31 per cent of the global athletic footwear market, with a market cap that has swelled to USD 115 billion as of 2018. So, how did they achieve such remarkable success in an extremely competitive marketplace?

Much of it comes down to their ability to instill a fierce and abiding brand loyalty among their followers. Nike doesn’t sell its followers athletic wear – instead, it offers access to an aspirational lifestyle and mindset that we all hope to emulate. This is achieved through its ever-present slogan, ‘Just Do It’, and thematically consistent ads that showcase everyone’s innate athletic potential. By elevating the average individual and turning them into brand mascots, instead of restricting themselves to professional athletes and sportspeople, they’ve managed to turn every single consumer into a brand evangelist. This has further been strengthened by Nike’s command over more traditional facets of brand marketing. The Nike App offers personalised training recommendations and updates for consumers, and the customer experience offered is consistently exceptional. All in all, no one has done this better than Nike on such a large scale.

Nike’s success in this field has proven especially important in light of recent developments. The tail end of 2019 saw Nike end its two-year-old partnership with e-commerce giant Amazon to sell its products directly on the site. This marks the end of a partnership that began in 2017, when a pilot test saw a limited assortment of products available on the platform. A key component of Nike’s initial distribution agreement with Amazon was the e-tailer’s pledge to strictly police counterfeits and impose restrictions on the unsanctioned sale of Nike products. Since then, Nike has decided to forego these benefits in favour of reshaping the marketplace to one in which the brand is connected more directly and personally with its consumers and fans.

The linchpin of this strategy is NIKE Direct, a unified retail strategy that brings detailed analytics, online sales and selectively chosen wholesale partners under one roof. Although it’s early days yet, the move appears to have paid off for the sporting goods giant. The brand’s ability to survive and even prosper in the wake of such an enormous shift, especially in the absence of as powerful a partner as Amazon, is testament to the esteem fans have for the brand.

If smaller brands ever hope to emulate this sort of success, they would do well to learn from this example and work towards inspiring a similar loyalty from their customers. Naturally, that’s easier said than done. Create a culture that people want to be a part of and encourage their participation. Or start with the basics and make it a point to return and recognise their loyalty. Start by rewarding positive social media behaviour of your users. Use rewards as a way of showing appreciation and love to customers who post good things about the brand. It helps build “brand advocates” who in the future would come to the brand’s defence when someone might initiate damaging criticism.

Focus on the importance of word of mouth by a regular user. These users might have small online communities but their word is far more influential in this community than an influencer’s. Track and analyse social media behaviour of your regular users. Chances are they are already talking about you, reward them and encourage this behaviour. To that end, there are specialised marketing platforms and tools that make this goal achievable. By internalising these lessons and drawing from the experience of those that came before, a brand can forge a deep and meaningful bond with its customers that lasts through the years.

(The author is a Sweden based entrepreneur and co-founder of Brandie, a crowd marketing platform that recently forayed into India.)