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Nike Cuts Out the Middleman

This is a syndicated repost courtesy of Statista | Infographics. To view original, click here. Reposted with permission.

Following a 38-percent drop in revenue in the past quarter caused largely by store closures due to the COVID-19 pandemic, Nike sales bounced back in the quarter ended August 31, the first of Nike’s fiscal year 2021. While overall sales for the sportswear giant were still down 1 percent compared to the same period last year, sales were up nearly 70 percent compared to the three months ended May 31.

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The better-than-expected results were largely driven by Nike’s direct-to-consumer business, which saw sales increase by 12 percent year-over-year to $3.7 billion, and specifically by the company’s booming online sales, which were up 82 percent over the same period last year.

The latest results are just a continuation of a longer-term trend that sees Nike, like other industry heavyweights, cut out the middle man and move more and more towards selling directly to consumers, at the expense of traditional retailers. As the following chart shows, the percentage of direct-to-consumer sales in total Nike brand sales more than doubled over the past decade, climbing from 15 percent in 2010 to 35 percent in fiscal year 2020, which ended May 31. In the meantime, direct-to-consumer sales grew nearly five-fold in absolute terms, from $2.5 billion in 2010 to $12.4 billion in 2020.

This chart shows direct-to-consumer sales as a percentage of total Nike brand revenue.

Direct-to-consumer sales as a percentage of total Nike brand revenue

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