Zalando, Nike Announce New Partnership, Linking Shopping Apps and Exclusives
American sportswear giant Nike will partner more closely with one of Europe’s largest online fashion retailers, Zalando, from October onward.
The two businesses have already worked together for nearly a decade, but this new version of the Nike-Zalando partnership will mean, firstly, that consumers in 10 European countries who already have a Nike account will be able to link it to the Zalando site.
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There, they will be able to access a wider selection of products only available to Nike members on the more wide-ranging fashion platform. Zalando customers will also be able to create a Nike account if they wish to access what Zalando is calling the “member-gated assortment.”
The partnership will begin in Austria in mid-October, then be rolled out to customers in Germany, the Netherlands, France, Belgium, Denmark, Sweden, Finland, Italy and Poland.
“The logistics will be facilitated by Nike as they are part of our partner program,” said Sara Diez, Zalando vice president for womenswear, explaining further how the relationship will work. “Partners take over logistics and warehousing themselves, unless they [already] use our fulfillment services.”
A statement released by both companies says their “long-term partnership reflects a mutual passion for innovation and provides a pioneering customer experience.”
“We are thrilled to now take this partnership to the next level by offering our customers exclusive benefits,” Zalando-co-chief executive officer David Schneider added.
But beyond the corporate congratulations, what’s really in it for all those involved? A look at a similar partnership with U.S. retailer, Dick’s Sporting Goods, that Nike announced last November offers some clues.
Both that partnership and this European one are just the latest in Nike’s ongoing plan to be more selective about its stockists and to expand direct-to-consumer sales via e-commerce.
The sportswear giant’s plan, aptly named the Consumer Direct Offense, was announced in 2017, and over the past five years Nike has become far fussier about where its products are sold and by whom.
Nike has deprived thousands of brick-and-mortar retailers, including department stores, of its wares. During an earnings call in March this year, executives said the brand had cut more than half its stockists over the past four years. It has also opened more doors of its own, with many offering unique customer experiences to showcase the brand.
In 2019, the company also stopped selling via Amazon, ditching a two-year-old pilot program that was supposed to allow Amazon to sell a limited Nike assortment on the global platform, in exchange for stricter control of the Nike brand.
Nike’s plan, market analysts have explained, was all about selling more product at higher prices while minimizing stock overlap and discounting, as well as developing better relationships with, and harvesting more data from brand fans.
Partnering with fewer and more successful retailers means Nike can showcase its quality product. Getting together with online giants like Dick’s, which sells a wider variety of sports equipment, and Zalando, which aims to be the biggest fashion platform in Europe, means there is potential for the U.S. brand to reach customers it couldn’t attract as easily on its own.
As Christopher D. Burns, a sneaker industry analyst and the author of a book about Nike’s Consumer Direct Offense, recently pointed out to journalists, Nike doesn’t want to do as much business with companies — like Foot Locker — which rely heavily on it for success. Nike prefers to partner with sellers that are doing well without Nike, he said, and which can offer the biggest sportswear brand in the world something new, too.
Both Dick’s, which had been engaged in a revamp of its digital business, and Zalando fit that description.
Customer data is also a potential draw. “Nike is a tech-driven company consistently working on ways to move closer to the consumer, and every engagement in the [Nike] app provides evidence of how well a Nike store could perform,” Burns pointed out on his blog. Zalando can potentially share information with Nike that it has gathered on 49 million active customers in 25 European markets.
“We don’t only offer access to new customers, we also help our partners understand their customers on Zalando and build real connections with them,” Diez told WWD shortly before the partnership was announced.
And what’s in it for Zalando? Certainly, the prestige. Being Nike’s preferred e-commerce partner cements the fashion platform’s reputation as the go-to platform in Europe.
It could also draw more customers to Zalando. In the U.S., Dick’s Sporting Goods saw share prices rise when the Nike partnership was announced. And more recently, the company has credited its ongoing growth and strong relationships with key vendors, including Nike, for better-than-expected sales results.
“This is a win for everyone involved,” Diez said. “Customers experience an even more inspiring and exciting journey when shopping for Nike on Zalando, Nike gets to understand those customers even better and we move closer to being [Zalando’s oft-stated ambition] ‘the starting point for fashion’,” in Europe.
