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Nike, known for its global dominance and innovation, is pursuing a new path for its retail experience, one that prioritizes the local element over its global brand image.
Announced last year, the company plans to open 200 small-format stores in North America, Europe, the Middle East and Africa. Known as Nike Live, these stores focus on the individual, tailored to their interests and needs and reflecting their local environment.
This follows a turbulent year, which forced retailers to rethink their models amid falling profits and changing customer bases.
The first Nike Live store made its debut in 2018 in Los Angeles. The 4,557 square foot space was designed to look like a permanent pop-up store. The store features a mural by a local artist and offers a rotating product line over two weeks, which makes the store feel like a lively and vibrant space.
For the customer, the days of selecting a product and hastily trying it out are a thing of the past. The shop offers a sneaker bar and consultation services – far from finding a shoe on the shelf and hoping they have it in your size. The Dynamic Fit Zone takes the personalized experience even further. Customers can test their shoes in a real environment using treadmills and relaxing in the space.
Due to the success of the Los Angeles location, Nike expanded its hyper local model across North America. Earlier this year, a Nike Live store opened in Eugene, Oregon. At this location, the inventory is updated every three weeks and shows staff picks. The store, called Nike by Eugene, also partners with local organizations and carries products from the University of Oregon.
On the East Coast, New York City hosts three different Nike Live locations, reflecting the diversity of the city and its customer base. Nike by Williamsburg open in september, joining the other two Manhattan locations, and has partnered with local bakeries, cafes and wellness centers. The store also reflects the progressive attitudes of its surrounding residents, with Nike’s first-ever genderless mannequins and a gender-neutral clothing section.
The digital experience
Why is Nike focused on creating such a personal experience for its customers? The answer lies in the data. Based on its apps and web traffic, Nike found that targeting engaged customers — rather than casual — was the most profitable. The longer they can keep customers in the store (virtually or in person), the better the sales.
According to Matt PowellVice President and Senior Industry Advisor for The NPD Group, engaged customers “have higher brand affinity, buy more than the non-customer, and the cost of acquiring the non-customer is high.”
The relationship between the customer and the brand is two-way. Those who download the app or visit Nike’s website provide meaningful and important data about their habits, lifestyle and style preferences, which the company then analyzes and tailors its selections and stores.
The application also converges with the physical retail space itself. In Oregon, members have access to the “Unlock Box”, a digital vending machine that allows them to redeem rewards at the store. Swoosh Text allows customers to chat directly with employees about recommendations, product availability and new store features from the convenience of their personal device.
Nike is not the first brand to offer localization as a concept for its stores. However, he learned from the failures of other companies’ efforts. Surprisingly, for a company whose motto is “Just Do It”, a patient and attentive approach was preferred, letting the data dictate the future.
“Many retailers have rushed into the market to bring localized concepts to market…Nike tackles this problem from the start by letting the huge traffic they drive to their website drive the merchandising,” says Matt Sargentsenior vice president of retail at Magid.
A necessary transformation
These efforts come at a crucial time for retailers. The pandemic has disrupted supply chains across the globe, keeping customers and employees away from stores, and forcing everyone to go online more than ever.
Nike was not immune to this disruption. Its revenue for the fourth fiscal quarter in 2020 was down 38%, with revenue in North America alone dropping 46%. However, in that same quarter, the company saw that digital growth had increased by 75% and was now capitalizing on that potential.
“The global pandemic has made it clear that consumer behavior is changing rapidly, presenting us with an opportunity to accelerate the pace of our transformation,” said CEO John Donahoe during a conference call last June.
It’s safe to say that Nike customers now have more power and influence than ever before. So if a new Nike Live store is opening in your city, you probably had something to do with it.
Image credit: Nike