“Brands don’t need Amazon,” Jefferies analyst Randy Konik said. “Amazon had a delivery speed advantage, but that advantage has compressed. With Nike leaving the Amazon platform … it strengthens our view that retailers/brands won’t be displaced by Amazon.”

https://www.cnbc.com/2019/11/13/brands-dont-need-amazon-nikes-departure-could-prompt-others-to-go.html

To a degree, I agree with the sentiment that “brands don’t need Amazon”. However, I think the framing is along the traditional lines of the brand-retailer (e.g. brick-and-mortar) relationship. Digital and e-commerce are different.

First, Amazon provides a “halo” brand that, to a degree, traditional retailers could not. While one knew the types of shoe selection they were to find in a K-Mart store vs. Nordstroms, the retail brand did not provide much else in regard to the customer experience for that product. Amazon is notably different: the reviews alone completely change the customer experience and thus brand relationship. The Amazon “brand” and experience here becomes an important factor in the way no retailer ever did.

That said, Amazon does not allow brands to exercise other “experience” elements which they use to differentiate themselves. Its a limited palette to paint upon and Amazon has not deviated much from this where brands could buy space and co-promotions as in traditional retail.

However, there’s a simple economic factor that Nike was likely experimenting with here — and helps reinforce Google’s shopping approach (e.g. ads only) — in is the 15% fee Amazon takes on the sale plus whatever marketing spend needed to promote products out strip buying ads on Google Shopping (and social media et al)? If its even (or roughly close), brands will choose non-Amazon as they retain far greater control of the experience that they’ve always tried to differentiate on.

Nike is a bellwether here so look out for how this influences others. And, at the end of the day, this was a growth option for Amazon and they have other avenues for this including the myriad on Amazon-only brands that now exist due to the “halo” effect.