More people are now buying Nike sportswear on Amazon than at Foot Locker

More people are now buying Nike sportswear on Amazon than at Foot Locker
Nike shoes are seen in a shop in Rome, Italy, March 30, 2016.
PHOTO: Reuters

The market for sportswear in the US is likely to reach more than US$120 billion (S$163 billion) by 2020 according to figures from Euromonitor and competition is fierce between leading brands Nike, Under Armour and Adidas.

And instead of heading to Foot Locker to buy new Nike sneakers, consumers are now going to Amazon and to buy direct, a new report suggests.

Nike had held out opening a store on Amazon because of concerns over counterfeits and a poor consumer experience on the site, but last month announced a deal with the online retailer that sent Nike stock soaring by more than 7 per cent.

It is piloting a limited product range on Amazon US in exchange for stricter monitoring of unsanctioned product sales, according to a call with analysts and investors.

The online report by UBS, "How is the US athletic market being impacted by the shift online?" stated: "We were very surprised to find that, for the first time, more US consumers indicate that they prefer to purchase Nike on Amazon (13 per cent) than at Foot Locker (9 per cent). This was a significant swing from last year (1H16: Amazon 10 per cent, Foot Locker 14 per cent)."

Nike is one of the most purchased apparel brands on Amazon, sometimes through unauthorized third-party sellers, which may have pushed it to sell direct through the channel to gain more control over sales.

Nike and Adidas are both hoping that their own websites, rather than third-parties, will help them to achieve growth targets.

Nike vs Adidas

Nike aims to increase direct e-commerce sales by around US$5 billion by 2020, which UBS estimates is around 30 per cent of planned group sales growth. Adidas aims to increase dotcom sales by around €3 billion (S$4.8 billion) by 2020, around 40 per cent of planned growth.

The perception of a brand as well as a consumer's intent to buy it are two metrics marketers closely follow, and Adidas has shown the largest improvement in both over the past 12 months, according to research UBS conducted online with 1,000 US consumers.

The German brand is now on a level with Under Armour, but lags behind Nike by 15 percentage points when it comes to brand perception.

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