November 15, 2019
Uh, I’m pretty sure it’s the other way around. Amazon doesn’t need brands.
Amazon isn’t an online retail company. It isn’t a web services company.
Amazon is a world domination company.
And in the past few years, with their push towards consumer-level artificial intelligence (Alexa), it’s becoming clear that “brand names” aren’t a part of Amazon’s vision for the future.
Basically, in ten years, people aren’t going to be shopping for “Nike” sneakers. They’ll just ask Alexa to buy them sneakers, and Amazon’s AI algorithm will determine what product will give you the most satisfaction (and them, the most profit).
All the advertising money and brand recognition in the world is meaningless when the majority of people buy the majority of products by just saying “Alexa, buy X for me” and agree to the first choice proposed because they’re too lazy to do anything else.
You’ll never lose money betting on people’s laziness. And AI-based purchasing using voice is about the easiest, fastest way to buy anything that exists right now.
Nike (and other brand names) are afraid – and they should be.
Nike will stop selling merchandise directly to Amazon, as part of its push to sell more directly to consumers, the company confirmed to CNBC.
The abrupt halt will end a pilot test that Nike and Amazon launched together in 2017. At the time, Nike agreed to sell a limited product assortment to Amazon, in exchange for stricter policing of counterfeits and restrictions on unsanctioned sales of its products. That included Nike’s athletic footwear, apparel and accessories.
Prior to 2017, Nike had resisted such a deal with Amazon, focusing its attention on its own online marketplace and stores. The fear for many brands has always been that, by partnering with Amazon, a company loses control over how its brand is represented on the site.
The real question is, how many people will bother buying your product if they can’t find it on Amazon?
Do you really think people are so loyal to your brand that they’ll go through the trouble of ordering it on your own website? Nevermind actually leaving the house to go to an actual store, where they’ll be confronted with the intolerable hellscape of obese brown people that America has become?
I wouldn’t bet on it.
“As part of Nike’s focus on elevating consumer experiences through more direct, personal relationships, we have made the decision to complete our current pilot with Amazon Retail,” a Nike spokeswoman told CNBC in an emailed statement. “We will continue to invest in strong, distinctive partnerships for Nike with other retailers and platforms to seamlessly serve our consumers globally.”
The spokeswoman added Nike will continue to use Amazon Web Services to run its website and handful of mobile apps, like SNKRS.
Bloomberg first reported the change Tuesday evening. Amazon didn’t immediately respond to CNBC’s request for comment.
Nike brings in roughly 30% of annual sales from its direct-to-consumer business. In the fiscal year ended May 31, 2019, Nike’s direct-to-consumer sales tallied $11.8 billion, fueled by a 35% jump in online sales and same-store sales growth of 6%.
Wholesale customer sales grew 10% during the same period. All told, Nike had $39.1 billion in fiscal 2019 revenue. Some of its biggest wholesale partners include Foot Locker, Dick’s Sporting Goods and Nordstrom. And while it still invests in those relationships, it’s been investing more in building out Nike stores and upgrading its apps and website.
This whole thing is really a double-edged sword.
On one hand, I’m not exactly a fan of Amazon’s brave new world vision for the future.
Well, it could be kind of cool, I guess. If we subtract all the brown people.
But on the other hand, I really hate marketing and advertising.
And this technological push is potentially going to eliminate most of that.
What we’re seeing with Nike and other brands trying to separate from Amazon is just the last gasps of corporate brands who refuse to accept the incoming reality that soon, very few people will actually give a damn about their carefully crafted brand image.
Nike will have to compete in either price or quality with other manufacturers if they hope to get sales through the new artificial intelligence algorithms. The era of selling $0.50 shoes for $200 because some niggerball player wears them is going to come to an end.