Nike's impending arrival on Jet.com shows a key advantage Walmart has in the fight against Amazon
- Nike is a featured partner of Jet.com as the Walmart-owned e-commerce site relaunches with a new focus on fashion.
- Nike will sell footwear, apparel, and accessories on Jet.
- Nike announced a pilot program to sell select products on Amazon in 2017, but that program hasn't moved far beyond basics like socks.
- Jet is leaping ahead of Amazon here, showing a key advantage in its ability to build a marketplace of brands.
Jet.com has a new partner.
The Walmart-owned shopping site announced on Thursday that it will feature Nike as a brand partner starting in October. The partnership is part of Jet's big relaunch, which includes a renewed focus on fashion.
Nike will soon sell footwear, apparel, and accessories from both Nike and Converse on Jet. The initial offering will include "hundreds of products," including "essentials for running, training and sportswear," according to Jet's press release.
As Walmart and Amazon continue to go head-to-head in e-commerce, Jet is providing a key advantage for its parent company in its ability to build a marketplace of brands.
Jet is creating a special experience for Nike
It's not just about having another brand on the site - Jet has clearly thought about how to best present its partner brand to Jet's customers, who, like Nike's customers, tend to be wealthy, millennial, and living in cities, according to Jet.
"What [Nike's] done with other folks online is a mere assortment of basics," J. David Echegoyen, Jet.com's chief customer officer, told Business Insider.
"We wanted to do something that was representative of the partnership we have and how we serve customers together. What you'll see is a lot more understanding of how the customer interacts with Nike, what they see in Nike, and how we can bring it to life on Jet, creating a canvas that allows those brands to connect with customers."
Capturing the world's largest sportswear brand in a unique way is a major coup for Walmart as it ups the ante in its battle with Amazon. Walmart acquired Jet for $3.3 billion in 2016.
"It's another step of Walmart trying to build their marketplace," Greg Melich, a senior retail analyst at MoffettNathanson, said to Business Insider.
"Walmart has a 10% share of U.S. retail sales. Amazon is approaching 7%. The two will keep going at it."
Nike's partnership with Amazon is different
Nike has a few general retailing partners online, though it mostly sticks to specialty retailers it already has relationships with.
But Nike's new partnership with Jet is a stark contrast to the pilot program the sports retailer has with Amazon.
The pilot program was confirmed by Nike CEO Mark Parker in June 2017. In September 2017, Heidi O'Neill, president of Nike's direct-to-consumer business, said that Nike had "elevated the Amazon experience" during a panel at Recode's Code Commerce conference.
O'Neill suggested that the partnership was motivated by a desire to lessen the number of counterfeit Nike products appearing on Amazon from third-party sellers, which experts had referenced when the pilot program was initially revealed. In fact, according to Morgan Stanley, Nike was already the top clothing brand on Amazon, even before it started selling anything directly on the site, thanks to the high volume of third-party sellers.
Searching for Nike on Amazon does not lead to a dedicated sale page like the one Jet is planning, but instead a list of Nike's products. Most of those items are basics like socks, T-shirts, and perennially popular products like the Air Monarch.
Amazon does, however, sell a much wider assortment of Nike products through its specialty site, Zappos.
Nike isn't the only brand to express concerns over Amazon's use of third-party sellers. Birkenstock said in December 2017 that it would stop selling its products on Amazon's US and European sites due to what CEO Oliver Reichert called an "assault on decency" on Amazon's part, saying the e-commerce giant had failed to crack down on counterfeit goods.
Amazon says in its seller policies that it does not tolerate fraud, but it is still a concern among some sellers. Jet doesn't seem to have that problem because its listings are more curated.
Walmart and Amazon are locked in a battle over the future of retail, both offline and online. Nike's partnership with Jet seems to be more comprehensive than its deal with Nike, and it puts a feather in Walmart's cap as it revamps its websites to try and capture Amazon's core customer of young urbanites.