Nike Inc. started cleaning up its stats sheet a week ago and the very first time, the Cheap Nike Shoes empire declined to report “future orders,” a vital way of measuring wholesale demand from the galaxy of retailers who sell the famous kicks. Nike, No. 9 within the B2B E-Commerce 300, says the metric doesn’t matter much anymore, because now it’s centered on doing business directly with consumers and cutting out the middleman.

Nike sells to retailers through a mixture of EDI and e-commerce. While Nike reported its slowest quarterly sales growth since 2010, its performance as a retailer-instead of a wholesaler-was a relative highlight. Sales on Nike’s own online store were up 19% within the recent quarter, while its retail locations notched a 5% gain in same-store sales. 28% of sales are direct this coming year, in comparison with 4% five-years ago. CEO Mark Parker said the business is obsessed right now with making shopping more personal. “Retailers who don’t embrace distinction will likely be left behind,” he warned on the conference call Tuesday.

Still, that wasn’t enough to thrill investors-at the very least, not. The overlooked beauty of bricks-and-mortar retail is how well retail chains lend themselves from what economists call price segmentation. Shoemakers like Nike can certainly target customers by sending the best shoes off to the right kind of store (think: first-class vs. coach, iPhone X vs. iPhone 8, Banana Republic vs. Old Navy). In Nike’s case, it ships expensive, limited 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 in these places as DSW Inc.

If done properly, all this socioeconomic slotting moves just as much merchandise as you can with minimal fuss, while not tarnishing the greater brand. Making no mistake: Nike can 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 exactly what to ship where. For each and every Nike Cheap Shoes in Beaverton, Ore., there’s a mid-level manager using a giant spreadsheet, making certain “Momofuku” Dunks aren’t too easy to find, ordering up a unique 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 trying to make a conclusion run around the fundamental economics of price segmentation. The strategy-a bold move, because of the historical manufacturer-to-retail model being discarded-requires no shortage of swagger. But Nike’s numbers reveal 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 and then in their own big box stores. With regards to cheaper, less-popular kicks, they quietly trickle in to the company’s “factory” stores (read: outlet) and onto Amazon.com. Nike even features a studio in New York City which makes customized shoes on-site in approximately an hour or so.

In short, the company is deemphasizing its ready-made network of retailers to generate an even more precise targeting mechanism. Tuesday Parker said the conclusion goal is to obtain in front of the consumer and provide “the most personal, digitally connected experiences” in the industry. “While changing your approach is rarely easy, Nike has proven before that if we do, it’s always tmrzsh the following phase of growth for our company,” he explained.

Theoretically, Nike can know virtually any customer better-and her or his willingness to pay-by using its own venues and platforms, particularly on its digital properties. The process will likely be building the mechanism to sort all the data, and by doing this, the customers. In real life, they sort themselves: The high-end boutique isn’t right near the cut-rate discount outlet. In the virtual world, it’s not easy.

For that record, Under Armour Inc. is slightly ahead of Nike Inc., with 31% of their sales coming directly from consumers; Cheap Nike Shoes is slightly behind, with 23% of revenue from retail. At its current pace, Nike will quickly be collecting one in three of the sales dollars directly from consumers. Its challenge is going to be being sure that none get too good a deal.

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