Source: zalando.com
Nike offers advice on successful marketplace partnerships
Nike last November controversially ended its direct sales relationship with Amazon. Yet at the NRF Big Show, Stuart Hogue, Nike’s VP, marketplace development, discussed how the sneaker giant’s partnership with Zalando should serve as a “blueprint” for others to follow.
What makes Zalando, Europe’s leading online fashion platform, unique is that it worked with brands in developing the marketplace, incorporating storytelling, highlighting presentation and remaining committed to “innovating digital together,” said Mr. Hogue.
With Zalando, Nike has collaborated to “tell great stories around sneakers” with the objective of expanding sneaker culture with women across Europe. The site uses lookbooks to help women style sneakers. At an event last year, Zalando invited women to a boxing event hosted by elite trainers. Zalando’s advanced analytics platform brought women most likely to engage with the experience.
In Berlin this spring, Zalando will start fulfilling online orders from local Nike stores to support same-day delivery and is similarly partnering on click & collect.
Asserting that the platform’s aggregate choices for consumers are similar to Netflix, Uber and Grubhub, Mr. Hogue said retail marketplaces have grown over 30 percent over the last five years, 2.5 times the rate of online growth.
Four priorities Nike has in deciding whether to partner with marketplaces include the site being somewhere consumers are “increasingly going” and its ability to create “new growth” not attainable from Nike’s current distribution.
Third, the marketplace must elevate the consumer experience, “whether it’s a focus on great storytelling, a commitment to celebrating the passion and potential of sport, a focus on fighting friction every single day for consumers, etc.” A priority for Nike is shifting away from “mediocre and undifferentiated retail.”
Finally, the marketplace has to be a guaranteed source of authentic Nike products.
“The last two are very much focused on the strategy of creating unbreakable relationships with our consumers,” said Mr. Hogue. “For many of the marketplaces we are working with, we are focused on creating invitations to our consumers to join Nike membership and, through insights and knowledge, we are collaborating with some of our great marketplace partners to personalize the experience by knowing them better.”
His one recommendation is to establish an aligned set of principles for how the brand will work across marketplaces. Mr. Hogue added, “The next thing that’s even more important is to be disciplined about them; stick to your guns.”
Discussion Questions
DISCUSSION QUESTIONS: What’s the best piece of advice Stuart Hogue offered for brands selling to and partnering with marketplaces? Do you have any other suggestions you would offer?
Poll
BrainTrust
Stephen Rector
Founder, President, Bakertown Consulting
Heidi Sax
Director, Growth Marketing for Wizard
One could read Mr. Hogue’s comments as a direct dig at Amazon and assume that its former relationship with Amazon didn’t check enough boxes. So Nike isn’t abandoning marketplace partnerships entirely, it’s just being more selective.
I really am enthusiastic about storytelling, as that is one of the few remaining potential differentiators for retailers to leverage. Your leadership team needs to take this seriously and devote regular time, perhaps quarterly, to update the brand story.
Hogue’s advice “tell great stories around sneakers” caught my attention and imagination. Stories embedded into a shared narrative with a particular marketplace sounds fresh. The old adage, what is old is new again, becomes new again with fresh viewpoints, great visuals and a fun and exciting story of “sneakers.” Pay attention to Mr. Hogue’s stats: “retail marketplaces have grown over 30 percent over the last five years, 2.5 times the rate of online growth.”
Authenticity and the ability to connect with consumers and the marketplaces with storytelling are extremely important for brands such as Nike as they explore marketplace partnerships. Nike has taken steps to control their branding and imaging, especially with its recent move from Amazon’s marketplace. As they move forward with their partnership with Zalando and other online marketplace platforms, it will be critical for Nike to collaborate with the messaging, storytelling, and curation.
I like Hogue’s comment about “sticking to your guns.” As a brand owner, you are responsible for making sure that your brand is being represented in the way you want on all platforms, whether you own them directly or are selling through another seller. If the platform isn’t offering what you as a brand want (which is what it sounds like the case was for Amazon and Nike), then end the relationship.
I think Amazon heard these concerns and will probably address them as they launch their fashion marketplace. It is still a delicate balance and a lot of risk for luxury brands, but at least they have established themselves outside Amazon.
This is interesting because it’s indicative of the next evolution of online retail — Amazon’s development of the behemoth marketplace has necessarily focused on its biggest differentiators (convenience and to a lesser extent price) often at the expense of other retailer niceties such as branding and engagement. Now that the online marketplace is well developed, new entries have to differentiate with better ideas for their brands and ultimately for their brands’ customers. Amazon (as is typical of all leaders in any business space) would prefer the status quo and to just do what it does best. So “Amazon the Disruptor” is quickly becoming the “Amazon the Established.” The brand storytelling that Nike wants to do to help it differentiate is not happening in the flea market environment at Amazon. Nike is better represented and can fully connect to its customers via Zolando. So Amazon will now need to raise its game.
In addition to considering the suggestions made by Hogue, brands need to make sure that they have a human partner at the marketplace dedicated to their account and brand representation. For brands like Nike who are constantly evolving and pushing the envelope, a marketplace’s ability to nimbly make changes on the brand’s behalf is huge. That doesn’t work without a good external partner who actually cares about your brand too.
Shifting away from “mediocre and undifferentiated retail” says it all! Nike is fully aware that associating its brand with mediocre retail experiences is not just reflecting poorly on the retailer — it damages the customer relationship with their brand. They’ve taken a stand that they will not accept this and have clearly defined the criteria necessary to work with Nike. I applaud their resolve and decisiveness! Every consumer brand should take note of Nike’s position!