Source: PSFK
Nike's attempt to bypass wholesale partners and own the customer relationship collapsed under the weight of unit economics it couldn't control—parcel fulfillment costs, 30% digital return rates, and customer acquisition friction that traditional retail partners had already solved. Vertically integrating last-mile logistics without the scale or operational discipline of Amazon or Walmart creates a cost structure that erodes margins faster than DTC revenue premiums can recover them. Physical retail's distribution network is a competitive moat that direct sellers must either acquire or partner with, not circumvent.