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Nike Inc. started cleaning up its stats sheet a week ago and the very first time, the sneaker empire declined to report “future orders,” a critical 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 eliminating 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-as opposed to a wholesaler-was actually a relative highlight. Sales on Nike’s own online store were up 19% inside the recent quarter, while its retail locations notched a 5% gain in same-store sales. 28% of all sales are direct this coming year, compared with 4% five years ago. CEO Mark Parker said the company is obsessed today with making shopping more personal. “Retailers who don’t embrace distinction will likely be put aside,” he warned on a conference call Tuesday.

Still, that wasn’t enough to thrill investors-a minimum of, not. The overlooked beauty of bricks-and-mortar retail is just how well retail chains lend themselves from what economists call price segmentation. Shoemakers including Nike can easily target customers by sending the cheap nike shoes free shipping 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, 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 as much merchandise as you can with minimal fuss, without tarnishing the bigger brand. Making no mistake: Nike can it correctly. On its face, the Swoosh is really 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 sneaker sketching savant in Beaverton, Ore., there’s a mid-level manager with a giant spreadsheet, making sure “Momofuku” Dunks aren’t too simple to find, ordering up cheap nike shoes wholesale for China, distributing its best-sellers to all the correct Di,ck’s Sporting Goods Inc. outlets and dumping plenty of Chuck Taylors at outlet malls.

Nike is currently upsetting their 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 conclusion play the basic economics of price segmentation. The strategy-a bold move, because of the historical manufacturer-to-retail model being discarded-requires an abundance of swagger. But Nike’s numbers show that the bet seems to be working, primarily because Nike has been 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 their lineup, meanwhile, sells on Nike.com as well as in its own big box stores. As for the cheaper, less-popular kicks, they quietly trickle in to the company’s “factory” stores (read: outlet) and onto Amazon.com. Nike even includes a studio in Ny that makes cheap nike shoes in about one hour.

In short, the company is deemphasizing its ready-made network wemjjs retailers to generate a much more precise targeting mechanism. Tuesday Parker said the conclusion goal is to buy ahead of the consumer and present “the most personal, digitally connected experiences” in the industry. “While changing your approach is rarely easy, Nike has proven before that if perform, it’s always ignited another phase of growth for the company,” he explained.

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

For your record, Under Armour Inc. is slightly ahead of Nike Inc., with 31% of their sales coming directly from consumers; Adidas AG is slightly behind, with 23% of revenue from retail. At its current pace, Nike will be collecting one in three of their sales dollars right from consumers. Its challenge is going to be ensuring that not one of them get too good a deal.