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    Nike Distribution Channel

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    Prashant Srivastav
    Nike distributes its products through three main channels: wholesalers, direct-to-consumer sales including retail stores and websites, and global brand divisions. While sales to wholesalers make up the largest portion, this percentage has decreased in recent years as direct-to-consumer sales have increased. Nike is focusing on growing direct sales to consumers, which provide higher margins than wholesaler sales. The company aims to increase direct-to-consumer sales to $8 billion by 2017 in order to continue shifting its distribution strategy.

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    Nike Distribution Channel

    Uploaded by

    Prashant Srivastav
    574 views2 pages
    Nike distributes its products through three main channels: wholesalers, direct-to-consumer sales including retail stores and websites, and global brand divisions. While sales to wholesalers make up the largest portion, this percentage has decreased in recent years as direct-to-consumer sales have increased. Nike is focusing on growing direct sales to consumers, which provide higher margins than wholesaler sales. The company aims to increase direct-to-consumer sales to $8 billion by 2017 in order to continue shifting its distribution strategy.

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    Distribution through three channels.

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    Nike distributes its products through three main channels: wholesalers, direct-to-consumer sales including retail stores and websites, and global brand divisions. While sales to wholesalers make up the largest portion, this percentage has decreased in recent years as direct-to-consumer sales have increased. Nike is focusing on growing direct sales to consumers, which provide higher margins than wholesaler sales. The company aims to increase direct-to-consumer sales to $8 billion by 2017 in order to continue shifting its distribution strategy.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    574 views2 pages

    Nike Distribution Channel

    Uploaded by

    Prashant Srivastav
    Nike distributes its products through three main channels: wholesalers, direct-to-consumer sales including retail stores and websites, and global brand divisions. While sales to wholesalers make up the largest portion, this percentage has decreased in recent years as direct-to-consumer sales have increased. Nike is focusing on growing direct sales to consumers, which provide higher margins than wholesaler sales. The company aims to increase direct-to-consumer sales to $8 billion by 2017 in order to continue shifting its distribution strategy.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Nike distribution channel

    NIKE distributes its products through three major channels:

     By selling products to wholesalers in the US and international markets

     By direct-to-consumer (or DTC) sales, which include in line and factory retail
    outlets and e-commerce sales through www.nike.com

     Sales to global brand divisions.

    Retail partnerships

    NIKE, Inc. has also tried to create category-specific retail destinations by partnering
    with footwear retailers such as Foot Locker, Inc. (FL), JD Sports, and Inter sport.

    NIKE’s sales mix and retail slant

    Sales to wholesalers are the largest revenue category. However, this category’s
    contribution in the sales mix contracted from 83.3% in fiscal year 2012 to 79.2% of
    revenues in fiscal year 2014. DTC sales, on the other hand, increased from 16.2% to
    20.3% over the same period. This is significantly lower than the ratio of DTC
    revenues for NIKE’s rivals in the space. In the most recent quarter, the respective
    ratios of DTC revenue to total revenue for Under Armour Inc. (UA), VF Corporation
    (VFC), and Adidas AG (ADDYY) were 25.3%, 23%, and 25.4%.

    NIKE is focusing on direct selling to the consumer with its DTC initiative.
    Comparing NIKE’s distribution channels, direct sales to the consumer provide higher
    margins than do sales to wholesalers. In fiscal year 2014, DTC revenues accounted
    for ~20% of total NIKE Brand revenues as compared to 18% in fiscal year 2013. On
    a currency neutral basis, DTC revenues grew 22% in fiscal year 2014 and 30% in
    1Q15, year-over-year.

    The company is attempting to grow the DTC category to $8 billion in sales by fiscal
    year 2017, up from $5.3 billion in fiscal year 2014. That’s an annual growth rate of
    14.7%, compounded.

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