Brief:
- Nike opened a concept store on Los Angeles's famed Melrose Avenue that relies on mobile technology and customer data to create a customized in-store experience for NikePlus loyalty members, according to Mobile Marketer's sister publication Retail Dive.
- Nike App at Retail, which made its debut in March, is central to the new 4,557-square-foot concept shop. Through the app, loyalty members can reserve products for pickup at smart lockers, shop for products, scan bar codes to learn more about specific items and earn rewards. Members shopping at the new Nike by Melrose store can also redeem special "unlocks" at a digital vending machine, which dispenses an array of exclusive products.
- Shoppers at the new store can text store associates to set up returns or product exchanges with curbside pickup. Nike plans to open a smaller Nike Live store in Tokyo next spring and to localize other stores with similar personalized features.
Insight:
Nike has majorly ramped up its mobile efforts over the past year. The company relaunched its NikePlus membership app in November 2017 to provide a customized selection for shoppers, develop customer data and help personalize product recommendations more effectively. More than 140 million people have signed up for the program, and Nike wants to more than double membership to 300 million in the next few years, per CNN Money. Meanwhile, the Nike App at Retail urges customers to visit stores like its new concept shop in L.A., and the company became the first brand to sell a product directly through Snapchat earlier this year. In addition, the company's SNKRS app is targeted at collectors of athletic shoes, giving them special notifications about sneaker drops, launch calendars and original content from shoe designers.
A year later, the mobile strategy is showing results with direct-to-consumer sales that rose 34% and comparable store sales gains of 5% in fiscal Q4 2017 from a year earlier, per eMarketer research. Nike's website also had about 11% of the online traffic generated by the top 10 U.S. apparel retailers in Q1 2018, one of the only direct-to-consumer brands in the top 10, according to SimilarWeb. As part of its new digitally connected store strategy, the brand this year will debut a new New York City flagship location that is set to showcase experiences like those at its downtown Soho store, which recently celebrated the 35th anniversary of Nike's Air Force 1 shoe by letting customers dye and paint their sneakers to match their individual tastes.
The Nike Live concept store in L.A. is likely part of the company's strategy to rebound from a slowdown in the U.S. that last year culminated in a corporate restructuring that cut about 2% of its workforce, or about 1,400 workers. Nike hadn't anticipated an abrupt change in the boom of athletic apparel market in mid-2015, per Matt Powell, a sports retail analyst at researcher NPD Group. Brands like Vans, Brooks and Allbirds were quicker to develop simple, lightweight and comfortable shoes, gaining the smaller brands some added buzz.
As part of the restructuring, Nike announced plans to narrow its focus to 12 key cities that were expected to make up 80% of sales through 2020: New York, London, Shanghai, Beijing, L.A., Tokyo, Paris, Berlin, Mexico City, Barcelona, Seoul and Milan. The idea was to create "a local business, on a global scale." The new Nike by Melrose store reflects that strategy with an exterior mural by an L.A.-native artist and services like the sneaker bar, 30-minute style consultations and Dynamic Fit Zone where shoppers can lounge or test products on treadmills, Retail Dive reported.
