NIKE’S NEW APPROACH

Nike has announced a radical new change in their business plan. The footwear giant will, going forward, focus on forty selected retailers who have been identified as the best in terms of presenting Nike's offering in-store and dedicating time and capital to retailing the brand. Currently, Nike has over 30,000 retailers worldwide, most of whom will be left without Nike's products. This change is a response to a conundrum which many wholesale brand managers and CEOs face. A brand typically relies on wide distribution in its infancy in order to increase reach and market penetration, however, this wide distribution often becomes a detriment, as the brand loses its 'cool' factor, and consumers seek something more unique. Nike will instead focus on retailing directly to consumers, which will allow more control over the presentation of their offering.

Other brands taking the same path include Coach, who is pulling their merchandise out of around 250 stores. Canada Goose is also moving its focus from wholesaling to retailing directly to consumers. Whether this mass market rejection will become a full-scale exodus is yet to be seen, as well as the extent to which this change will happen in New Zealand, but the onus remains on mass-market retailers to continue to improve and enhance their point of difference and consumer engagement.