As the world’s best consumer brands focus on direct-to-consumer strategies, a Foot Locker-style business model looks increasingly like a dinosaur. This “house of brands” is a typical sneaker and apparel store that pits Nike against adidas and New Balance on the shelves. It even sells Crocs, a company whose success remains an absolute mystery to me.
Groups such as Nike don’t want you to shop at a “house of brands” — they want you to shop for Nike products only, without being tempted by a competitor’s offering. Nike prefers you to buy shoes online or on an app, so it can learn more about you and give you special offers. By capturing the wholesale and retail margin, Nike maximises profits on each sale and can give some of those back as loyalty discounts and the like...
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