Birkenstock’s CEO Applauds Nike’s Move to Nix Amazon Partnership: ‘Brand Equity Is Sacrosanct’
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Three years after Birkenstock cut ties with Amazon, Nike is doing the same, ending a two-year pilot program in which it sold shoes and apparel directly to the e-commerce behemoth.
The 2017 deal was aimed at “[improving] the Nike consumer experience on Amazon by elevating the way the brand is presented and increasing the quality of product storytelling,” Nike CEO Mark Parker told analysts at the time. (Parker announced last month that he will step down from his role in January 2020.)
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Now, Nike says it wants to focus on “elevating consumer experiences through more direct, personal relationships” — which, it seems, doesn’t include Amazon.
David Kahan, CEO of Birkenstock Americas, has for years been vocal about the brand’s problems with Amazon, saying in 2016 that its open marketplace fostered an environment of “unacceptable business practices” such as counterfeit products and unauthorized sellers that showed “a blatant disregard for our pricing policies.”
About Nike’s decision on Wednesday, Kahan told FN the news was validating to hear. “I am actually quite satisfied since they gave it a chance over 24 months,” he said. “But when the largest brand in the entire footwear business can’t find a way to make it work, it clearly makes a statement.”
That statement, he continued, “is simple and is exactly what we have said all along: As a brand, your brand equity and the special relationship you have with your end users, your consumers, and in our case — and I am sure Nike’s as well — what we call our brand ‘fans’ can never be compromised. It is sacrosanct. And any ‘partner’ or potential business partner must share these same brand values. If they don’t, then you cannot be in a relationship. [There is] no grey area. As a brand manager, it’s that simple.”
While Amazon created a dedicated Nike brand shop as part of the partnership, typing “Nike” into the search bar (as the vast majority of Amazon shoppers do) pulls up tens of thousands of listings — some sold directly by Amazon, and others by countless third-party sellers.
When the deal was announced, analysts were skeptical that a long-term partnership would come together unless Amazon could promise much stricter policing over unauthorized listings. “We continue to believe a full-scale deal would have to include the removal of third-party Nike listings given how protective Nike is over its brand,” Susquehanna Financial LLLP analyst Sam Poser wrote in a note, adding that Amazon’s “reputation as a transactional retailer with no interest in brand building” cast doubt on whether this would ever happen.
Indeed, it seems Nike’s and Amazon’s interests weren’t enough aligned to justify an ongoing relationship. But while the Beaverton, Ore.-based brand might be the biggest footwear name to walk away from Amazon — and Birkenstock might have made the biggest splash doing so — others have made a similar choice.
Earlier this year, Vibram Corporation decided to stop selling its Vibram FiveFingers barefoot running shoe product directly to Amazon, according to Fabrizio Gamberini, the company’s global chief brand officer and president.
“This isn’t a decision we took lightly,” said Gamberini in a statement. “But Vibram is a brand… Our technologies are at the forefront of innovation in the footwear industry and this decision helps us — and, as we can see, many other brands — stay focused on connecting with our B2B and B2C consumers.”
In other words: Amazon may be a massive commercial force, but for brands, working with it can mean sacrificing direct connections with customers — which for many, may not be worth it.
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