Nike Inc. started cleaning its stats sheet the other day and the first time, the Cheap Nike Shoes From China empire declined to report “future orders,” a crucial way of measuring wholesale demand from the galaxy of retailers who sell the famous kicks. Nike, No. 9 in the B2B E-Commerce 300, says the metric doesn’t matter much anymore, because now it’s centered on working directly with consumers and removing the middleman.

Nike sells to retailers through a mix of EDI and e-commerce. While Nike reported its slowest quarterly sales growth since 2010, its performance as being a retailer-rather than a wholesaler-had been a relative highlight. Sales on Nike’s own web store were up 19% inside the recent quarter, while its retail locations notched a 5% gain in same-store sales. 28% of sales are direct this season, in contrast to 4% 5 years ago. CEO Mark Parker said the business is obsessed right now with making shopping more personal. “Retailers who don’t embrace distinction is going to be put aside,” he warned on a conference call Tuesday.

Still, that wasn’t enough to impress investors-at the very least, not even. The overlooked appeal of bricks-and-mortar retail is the way well retail chains lend themselves as to what economists call price segmentation. Shoemakers such as Nike can certainly target customers by sending the best shoes to the right sort of store (think: first-class vs. coach, iPhone X vs. iPhone 8, Banana Republic vs. Old Navy). In Nike’s case, it ships expensive, exclusive edition sneakers to high-end boutiques, routes its stock Jordans to chains like Foot Locker Retail Inc., and dumps its low-end product and off-key colorways such places as DSW Inc.

If done properly, all this socioeconomic slotting moves just as much merchandise as is possible with minimal fuss, while not tarnishing the greater brand. Making no mistake: Nike does it correctly. On its face, the Swoosh is a design shop supercharged by the sort of storytelling its TV commercials, billboards and magazine ads are famous for. But Nike’s real genius isn’t marketing, it’s merchandising: knowing what to ship where. For every Cheap Jordan Shoes in Beaverton, Ore., there’s a mid-level manager with a giant spreadsheet, making sure “Momofuku” Dunks aren’t too easy to find, ordering up an exclusive design for China, distributing its best-sellers for all the best Di.ck’s Sporting Goods Inc. outlets and dumping plenty of Chuck Taylors at outlet malls.

Nike is currently upsetting its own well-oiled applecart. In giving traditional retail the stiff arm, which Nike made official in June, the Oregon empire is tearing up that playbook and working to make a stop play the basic economics of price segmentation. The strategy-a bold move, given the historical manufacturer-to-retail model being discarded-requires no shortage of swagger. But Nike’s numbers show that the bet is apparently working, primarily because Nike continues to be sharpening its digital game.

Sought-after sneakers now ship out via Nike’s own ecosystem of apps, including SNKRS, which it launched early last year. The heart of the lineup, meanwhile, sells on Nike.com as well as in their own big box stores. With regards to cheaper, less-popular kicks, they quietly trickle into the company’s “factory” stores (read: outlet) and onto Amazon.com. Nike even has a studio in New York which makes customized shoes on-site within an hour or so.

In a nutshell, the company is deemphasizing its ready-made network of retailers to create a more precise targeting mechanism. Tuesday Parker said the end goal is to get ahead of the consumer and provide “the most personal, digitally connected experiences” in the market. “While changing your approach is never easy, Nike has proven before that when perform, it’s always tmrzsh the next phase of growth for our company,” he explained.

In principle, Nike can know any customer better-and his or her willingness to pay for-by utilizing its very own venues and platforms, particularly on its digital properties. The challenge will likely be building the mechanism to sort all of the data, and in doing so, the customers. In the real world, they sort themselves: The top-end boutique isn’t right near the cut-rate discount outlet. Within the virtual world, it’s not too easy.

For the record, Under Armour Inc. is slightly before Nike Inc., with 31% of their sales coming right from consumers; Cheap Jordans is slightly behind, with 23% of revenue from retail. At its current pace, Nike will soon be collecting one out of three of the sales dollars straight from consumers. Its challenge is going to be making sure that none get too good an agreement.

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