It wasn’t you — it was us… After years of focusing on its direct-to-consumer (D2C) business, Nike is back in retailers’ inboxes asking if they’re free to catch up sometime. The sneaker icon has expanded its wholesale relationships with the likes of Macy’s, Foot Locker, and DSW parent Designer Brands. It’s an about-face from the company’s recent strategy:
Split: Since 2018, Nike has halved its wholesale business, ditching deals with thousands of small retailers and downsizing distribution to chains like Foot Locker. The shift was part of a profit-pumping attempt to boost D2C sales through Nike sites and stores.
Second thoughts: In the past two quarters, Nike’s wholesale biz logged impressive growth, outpacing D2C in the fall. Inventory glut and ensuing markdowns hurt profits, making the company further question its D2C focus.
Rediscovering the intermediary… A few years ago, D2C was all the rage. But shifting consumer habits have seen D2C-native brands lean into wholesale deals to boost revenue. After disappointing earnings, Allbirds announced it would consider expanding deals with partners like Nordstrom and REI. Adidas, struggling with big losses from its Yeezy split, recently said that wholesale would play a larger role in its strategy. Peloton began selling gear on Amazon and in Dick’s stores last fall. Beyond apparel, Casper mattresses can now be found at Mattress Warehouse and Glossier products are stocked at Sephora.
Ownership isn’t all it’s chalked up to be… The D2C model lets brands own more of their business, control how their products are sold, and glean more info about their customers. But it comes with higher shipping, marketing, labor, and tech costs. For companies chasing profits and presence, maintaining wholesale relationships can take some of the pressure off.