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Joyce A. Young, Paul W. Clark

Nike's Fast Break to the Consumer

This critical incident traces the impact of Nike’s decision to refocus its distribution strategy toward internal marketing channels. In 2017, Mark Parker, CEO of Nike, the world's largest athletic brand, announced the company would eliminate thousands of retailers from its U.S. distribution channels. Nike’s 30,000 independent retailers anxiously waited to learn their fate. Many small sporting goods retailers accused Nike of disloyalty toward the stores that were first to adopt the brand in the 1970s. Nike had decided to change its marketing channel strategy by focusing more on direct-to-consumer (DTC) sales through its own apps/website and company-owned brick-and-mortar stores. By 2020, online sales represented 30% of Nike’s total business and it predicted DTC sales to reach 50% in the coming years. Students are asked to decide whether Mark Parker and Nike made a wise decision in severing thousands of retail accounts, simultaneously strengthening others, all while shifting to greater DTC sales.