Nike's two year pilot with Amazon to sell their products on their website has ended.
The break-up comes amid big sales adjustments by Nike and the announcement of the stepping down of Mark Parker, the 13-year CEO of Nike for a board member and former eBay CEO, John Donahoe.
“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,” Nike said in a statement. “We will continue to invest in strong, distinctive partnerships for Nike with other retailers and platforms to seamlessly serve our consumers globally.”
Nike, Inc. said that they will continue using Amazon's cloud computing unit and Web services “to power a suite of services on Nike.com and within Nike's ecosystem of apps.”
A major concern now would be if other companies will follow Nike's example and leave Amazon.
“Nike has enormous reach and its products are in demand, so it can afford to be selective about where its products are distributed because customers will come find Nike where it is offered,” said Neil Saunders, an analyst at GlobalData Retail. “I don’t think as many brands can be as selective as Nike.”
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Donahoe, who has been on Nike's board since 2014, will be in charge of reinforcing the company's online strategy, Reuters reported.Parker said last year that he would continue being CEO and chairman of Nike past 2020.
Parker made some public comments supporting the controversial ad campaign that was seen by many as approving of Kaepernick's kneeling during the national anthem.
He said in September 2018: "We feel very good and are very proud of the work we're doing, we've seen record engagement with the brand."
"We know its resonated actually quite strongly with consumers," he said, "obviously here in North America but also around the world."
Parker is credited as the creator of the popular Nike Air sneakers, along with other innovative products. He also supervised Nike's move to sell online directly to buyers and the international market in recent years, especially the Chinese.
Parker will still be the executive chairman of Nike and keep on leading the board after he is replaced as CEO.
“We like that (Donahoe) comes from technology and that he comes from the digital space and we like that he is a strategist and a leader ... things that have made Nike positive have been because of those sort of strengths,” Jane Hali & Associates analyst Jessica Ramirez said.
Nike’s digital revenue surged 35 percent in the last fiscal year, with the company expecting online sales to account for about a third of its business by 2023.
Edward Jones analyst Brian Yarbrough said Donahoe’s e-commerce experience could help with Nike’s online push, while Parker could focus more on product development, one of his key strengths.
Last year, the sneaker making company also drew controversy after they canceled a patriotic sneaker designed to celebrate Independence Day because Kaepernick reportedly complained that it features an older version of the American flag which he claimed was “offensive.”
The canceling of the shoe model, along with Kaepernick’s refusal to remain standing for the national anthem, triggered widespread criticism on the internet.