Kanye West recently sat down with the crew of WGCI’s Morning Riot for a quick interview where he touched on a range of topics. During the discussion, the artist brought up several great points regarding Nike’s dominance and its practices when it comes to distribution at smaller retailers. In particular, West took issue with the way Nike forces retailers to pick up a large range of inline products in order to stock some of the more sought-after releases, such as with the Yeezy and Yeezy 2, and Jordan Brand Retros.
Speculation runs rife as to the exact reasons for West’s departure from Nike, but his expressed desire to reach more consumers, and get paid, more was rumored to play a part and his latest statements certainly lend credence to this. It’s a well-known fact among retailers that Nike isn’t always the easiest brand to deal with. In order for a retailer to pick up Quickstrike releases, they must take on the full range of upcoming Quickstrikes as well as reach a minimum spend or quantity ordered for inline products. Often, the inline products can be categorically unrelated to the more limited-edition releases, meaning a lifestyle retailer could potentially have a batch of American football or training products sitting alongside Jordans or Quickstrikes, which was exactly the case with one well-known retailer who wishes to remain anonymous.
While this in and of itself isn’t necessarily a problem, it can be problematic when the additional products required to order top-tier releases aren’t as desirable. I am by no means saying that any brand’s products aren’t great, but from a brand’s perspective, it must be easier to move certain product when it’s tied to a high-profile one. Guaranteed sales are great from a brand’s perspective, but it can also lead to complacency or a lack of innovation. Take, for example, the glut of graphic-heavy Foamposites that have released in the last few months of this year. While they’ve been hyped and promoted across the board, they’ve failed to sell in the same way that more traditional Foamposites have done in the past. The fact that these shoes aren’t selling is not necessarily a result of these practices, but one has to wonder whether these would reach the market if Nike didn’t have guaranteed sales channels. Add to that, the fact that this practice puts undue stress on the smaller retailers and forces them to try and compete with big-box retailers. It’s a sad reality, but many of these boutique retailers that put Quickstrikes and Jordan Retros on the map are now losing out to the mass market chains that are slowly putting a chokehold on the market.
Having said all this, it's important to highlight that regardless of the difficulties; retailers still work with Nike. The simple fact is, Nike has certainly done enough in terms of building desirable products that it can afford to approach its business the way it does. The men and women who run retail boutiques are a savvy bunch, and they know that there is a net-gain involved when working with Nike, according to the retailers we’ve spoken with. Retro Jordans have an almost guaranteed sell through rate, and the numbers involved make bringing on lower-profile products at times an unwanted but acceptable evil.
The general business practices between Nike and its lifestyle retailers haven’t exactly been a secret. However, Kanye West has brought to light a rather interesting brand-retailer dynamic. Whether you like it or not, people often listen when Kanye West speaks -- regardless of whether they agree or not with what is said. Nike has been a runaway juggernaut in the footwear industry, but there will be some interesting developments if West continues on his agenda of making mainstream some of the polarizing practices of his former collaborator.
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