The Future of Retail: Will Amazon Control Everything?
This past week Amazon made two more big moves in retail by signing agreements with Nike and Sears to be able to sell their products online.
For Amazon, the illusiveness of certain name brands has been one of their few achilles heels. People have long known that buying name brands from Amazon and their partners was often risky as everything from clothes to diapers were all potentially “knock-offs” given Amazon didn’t have direct brand relationships.
This week the first domino fell as Nike reached an agreement to allow the sale of Nike products on Amazon. This will likely lead to more brands succumbing to the pressure and setting up similar sales agreements with Amazon. Given the way people shop and buy on Amazon, this wasn’t an if, but a when, and it appears the when is now.
In other news, Sears has reached an agreement to allow Amazon to sell their Kenmore line of appliances online as well. I see this one as a great win for Amazon but a real mark of a continuing crisis within Sears. Over the past few years we have seen Sears sell of their most valuable brands like Eddie Bauer and Craftsman in order to raise cash to sustain their archaic business model. With Kenmore being one of the few prized assets they have left, their allowance of the product to be sold on Amazon indicates to me that they are acknowledging the death of their retail business and starting the conversion to growth through the sale and perhaps even licensing of their brands to 3rd parties with more sustainable sales models.
Sad for Sears, exciting for customers that want their fine appliances but don’t want to deal directly with the Sears brand.
What is next for Amazon? I see a lot more agreements like these coming in the future.
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