As of January 1, 2020, Nike is reportedly forbidding its retail partners from shipping Nike products internationally, defined by Nike as, “outside their trade territory.” This was communicated to the brand’s retail partners via email and confirmed to Highsnobiety by several reputable retailers.
Though news had leaked several months ago that Nike was planning such an action, it was Colchester, England-based Attitude Inc that first officially announced the policy change via its Instagram Story (screenshot below), stating that Attitude would not be shipping outside the EU starting January 1.
When approached for comment, Attitude’s head buyer and general manager, Alvin Singfield, told Highsnobiety, “Although in the short term we may lose some business due to this new policy, I respect and understand this decision taken by Nike to protect the brand, which in turn will no doubt benefit us as a Nike stockist in the future. Singfield reiterated his stance that the move will benefit all involved in the long term and added, “I fully appreciate their decision with this policy and believe it will be for the best.”
Leaked images of Nike’s message to its retailers purport the announcement to read: “This communication is to inform you that effect January 1, 2020 Nike will not permit international shipping (defined as shipping outside of your trading territory) of Nike products to consumers. Shipping to consumers internationally is in violation of Nike Terms & Conditions of Sale. Violation of Nike’s distribution policies may result in corrective actions up to and including discontinuing Retailer access to Nike product.”
The message apparently continues by outlining that retailers in an open market, such as the EU, will continue to be able to ship across borders so long as the destination country is within the predetermined trade union. “For clarity, under their Terms & Conditions and applicable distribution policy, Retail Partners in the European Economic Area and Switzerland will continue to be free to sell and ship to consumers or authorized Nike resellers throughout the European Economic Area and Switzerland.”
While the exact repercussions of Nike’s new stance are still unclear, one retailer confirmed to Highsnobiety the existence of the communication, but went on to state that after having checked the wording and contacted Nike directly, it found that it will still be able to ship internationally, suggesting that the Terms & Conditions of Sale are not as concrete as Nike would have many retailers believe.
This move is the latest in a concerted effort by brands to have more control over the distribution of their product and a trend that Highsnobiety predicted earlier this year. adidas and Kanye West’s YEEZY released geographically-locked product, first in March 2019 and then again in May, forcing retailer and consumer behavior to adapt in an apparent attempt to create an artificial shortage in supply in certain markets and therefore more excitement or hype around a product.
Similarly, Nike SB has been changing up the distribution of some of its releases in the last few months, opting to drop some product exclusively at skate stores worldwide, rather than through multi-purpose sneaker retailers. An example would be the recently-released tie-dye “Ray Gun” Nike SB Dunk Low, which saw the black pair drop through Nike’s regular channels and Nike SNKRS, while the white pair was a skate store exclusive.
What it comes down to, is that brands such as adidas and Nike are moving towards expanding their already robust direct-to-consumer pipelines and this new retailer policy supports that transition. Brands are hoping it leads to more control over the brand narrative, higher margins, and more access to data that is usually reserved for retailers selling product to the end consumer.
While Nike has not answered Highsnobiety’s request for comment at the time of writing and therefore any speculation as to the brand’s motives will remain as such, NPD’s sports industry analyst Matt Powell believes it comes down to control and is the first of many similar moves we’ll see in the future. “I expect we will see more moves like this,” Powell tells Highsnobiety. “Brands fear they are losing control of their brands as resellers and others are making products available in marketplaces.”
Powell also believes that this will not have as big of an effect as many people think, both on consumers and the retailers themselves. Highsnobiety previously projected that restricting retailer’s ability to ship overseas would result in the retailer’s general consumer base shrinking and could cause problems for independent or small business sneaker retailers. Powell disagrees, saying “Selling product outside the home market is likely not a big deal for retailers. I expect it is a tiny sliver of the business.”
Similarly this move could also be the beginning of a wave of expansion for well-positioned and quick-thinking retailers, similar to how Sneakersnstuff has turned its Stockholm-based business into a global presence with stores in the USA, Tokyo, and Europe.
As for what changes for the consumer, Powell predicts it won’t have a “major chilling effect” on overall consumer activity. “This will limit the consumers’ ability to get access to limited edition products,” he says. Consumers who previously had access to worldwide raffles for limited sneakers will now have to make do with a shorter list of retailers, whereas consumers within the retailers’ territories will likely see less competition for highly-coveted drops.
