UPDATE: Nike confirms deal with Amazon

London - Nike has laid the rumors to rest and confirmed it is set to partner up with online giant Amazon. The move lays to rest a long-standing standoff between the Amazon and the sportswear retailer and sees the two parties working together to strengthen their brands.

Nike's CEO Mark Parker confirmed the partnership on Thursday during a call with analysts discussing its Q4 FY17 results, a week after speculation concerning a potential deal between the two first began. The partnership sees the start of a pilot program during which the sportswear king will offer "a limited Nike product assortment" of footwear, apparel and accessories on Amazon.

Nike set to sell a curate offer of products via Amazon

Both Parker and Nike President Trevor Edwards stressed during the call that the move was a trial to test consumers response. "We're in the early stages, but we really look forward to evaluating the results of the pilot," said Parker during the call. The deal between Nike and Amazon will likely be beneficial for both parties, as an official presence on Amazon is set to boost Nike's online sales while helping it fight against unauthorized third-party sellers and potential counterfeiters.

The deal will also give Nike direct access to Amazon multi-million customer base, which is said to count 80 million high-spending Prime customers in the US alone. The online giant has been busy investing in strengthening its fashion appeal and recently announced a new program known as Prime Wardrobe, which lets Prime members order clothes for free and pay for the items they chose to keep. With Adidas list as one of the first brands to sign up for the service, Nike may soon follow in its footsteps.

In addition, Nike will also be able to leverage a certain level of control over the other Nike products currently offered on Amazon. Although the sportswear company does not directly sell on Amazon, it is estimated to be the most-purchased apparel brand on the ecommerce platform according to a recent Morgan Stanley survey. The third-party sellers currently selling Nike goods via Amazon are not legimate dealers, which means that some of the unauthorized goods may also be counterfeits. But the new partnership sees Nike gaining more authoirty as to what products may and may not be sold on Amazon.

During the conference call, Parker added that he hoped to improve customer experience and brand storytelling concerning Nike on Amazon. However, the US sporting goods brand could also be exposing iteself to pricing pressure by selling on Amazon, as the online retailer is known for its price-matching guarantee, which means Nike may be pressured to participate in steep discounting with the items it sells via the website.

Nevertheless, a deal with Amazon is vital to Nike, as the online retailer could be the key for the sportswear retailer to secure its place in the US market. Rival Adidas recently doubled its market share in the US at the expense of Nike, as sales in North America fell short of 3.8 billion US dollars predicted for its fiscal fourth quarter for FY17.

Photos: Courtesy of Nike