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Nike recently announced that it would stop selling its footwear and apparel through Amazon in an effort to take more control over its brand presence online. In making the announcement, Nike executives stated that the company didn’t need distribution for distribution’s sake. Instead, it wanted to make investments that would lead to a better online experience for its customers and build more direct, personal relationships.
Nike’s decision highlights a fundamental challenge for companies that have ambitions to make e-commerce an important part of their marketing activities: how to apply their experience and wisdom around effective brand strategy in the offline world to online shopping. Successful brick-and-mortar merchants understand the value of a carefully organized and coherent brand merchandising plan and would never say, “Just line up all the products and let customers muddle through.” Yet this is essentially what people get when they shop online.
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Few companies have the resources or market clout to take direct control of their online presence like Nike is doing. Even powerful, well-established brands tend to rely on e-commerce sites like Amazon.com, Walmart.com, and Etsy.com for online sales. Unilever, the consumer goods giant, for example, generates about 5% of its worldwide revenue online, but only a small fraction of those sales come from its own websites; the rest come from the likes of Walmart.com and Amazon.com. Apparel brands Hanes and Levi’s rely heavily on major online retailers for digital distribution. The same goes for toys and games, where Lego, Mattel, Hasbro, and Nintendo achieve more than 80% of their online sales through Amazon.
However, by relying on third-party sites for digital growth and logistical distribution, product marketers are at the mercy of the watered-down customer experience these sites provide, diluting their visual equity and their overall brand value proposition. Indeed, if you search for “skin care products” on Amazon, for example, you’ll be bombarded with a seemingly endless display of results — more than 100,000 of them. Obviously, this doesn’t help online customers recognize and understand the value proposition of a particular product or brand. Nor does it help to inform the customer’s selection among the different product versions within a company’s brand portfolio.
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