Why would Reebok International, which last year suffered a 13.6 per cent drop in US footwear sales, try to stop online retailers from selling its products?
Despite weak sales, Reebok has some good reasons for wanting to control its retail channels. The company fears unauthorised discounting that undermines the value of its brand. The threat is particularly acute online.
To fight the trend, Reebok plans to dole out a "Certified Reebok Internet Partners" designation to select retailers, says Roger Wood, VP of global e-commerce and direct marketing at Reebok.
Although Reebok won't say who it plans to work with, the policy would apply to chains like Copeland's Sports, which operates Sports Superstore Online, and Web-only retailers like Fogdog Sports.
Online discounting is good news for consumers but scary for companies like Reebok. Last week The Standard bought a pair of men's cross-trainers for $US41, including shipping, on eBay. The seller says he bought the shoes, which had a $99 price tag attached, on sale at a Toronto-area Hudson's Bay department store. Reebok says the shoes retail for $69.99 in the US.
Reebok may find it hard to stop unauthorised online discounting. "Thousands and thousands of retailers are trying to survive. If they can get away with selling product to some kid on eBay undetected, they're going to do it," says Doug Dell, founder of SportingAuction, a sporting-goods liquidator.
Companies that dictate terms to their retailers usually have the upper hand when consumers -- and therefore retailers -- are clamouring for their products. One retail veteran from a major chain suggested Reebok doesn't have the clout to handpick its vendors. "Their shoes just aren't moving that well. If it was Nike saying it, that'd be a different story," he says.
Last year, in fact, contract retailers that wanted to sell Nike products online had to submit Web-site plans, according to a Nike spokesman. Similarly, Callaway Golf now requires online retailers to meet a set of e-commerce standards before it allows them to sell the company's products over the Web.
Says Reebok's Wood: "For a technobrander like myself, these are going to be interesting challenges in the next three years or so."