A few months after the Nike by Melrose store opened in Los Angeles, Nike Inc. last week opened a new flagship store in New York City.
The 68,000-square-foot, six-floor store is designed to work in hand with the Nike app, letting shoppers check out on their smartphones, ask to have clothing delivered to dressing rooms and schedule appointments with an in-house stylist.
Nike launched its mobile shopping app more than two years ago, but only recently stepped up the features on it. The shoe retailer’s app accounts for nearly 40% of Nike’s online revenue in its fourth quarter for fiscal year ended May 31. “We are seeing continued momentum from our apps around the same range,” Adam Sussman, chief digital officer at Nike, tells Internet Retailer, declining to provide specific or updated figures.
Shoppers automatically become NikePlus members after downloading the Nike app. They receive such perks as discounts, personalized recommendations and exclusive product offers. NikePlus members spend three-times more on Nike.com than other shoppers do, Bloomberg reports.
The conversion rate of shoppers into NikePlus members at Nike by Melrose was six-times higher than at the rest of Nike’s stores. The retailer tracked members who had come into the store versus a comparable set of customers who hadn’t. The members who had visited the shop later spent 30% more online than the ones who didn’t have the in-person experience, Bloomberg reports. In Shanghai, where Nike just opened a store similar to the New York flagship, Nike says it is signing up a new member every two minutes. “We’re seeing our members engaging at a rate that exceeded our expectations,” Sussman says.
Data-focused experience
The Nike app uses geo-fencing technology, which is digital “fence” around the store, so the app knows the moment a shopper enters the store. The app then offers the Nike App at Retail section, changing the homepage to feature new offers and content. The new flagship store also offers many of the features the Nike App at Retail test-drove at Nike by Melrose, such as scan to try on, scan to learn more, reserve and pick up, pickup lockers and member unlocks, which are free products shoppers can unlock from a vending machine by scanning their member QR code.
“We’ve taken the best of Melrose, what we’ve learned there, and tried to design this store to be that live experience,” Sussman says.
For example, Nike by Melrose was a locally focused store, providing shoppers with a look at top-selling items in the Los Angeles area. It has done the same for the New York City store by aggregating NikePlus member data from its e-commerce site, mobile site and app to generate top-selling items in the New York metro area, Sussman says.
“We use that data to inform how we assort the stores because people like to know what’s trending and what people in the city are buying. It inspires confidence in their purchases,” he says.
“It allows Nike to see how shoppers are interacting with the products and navigating the floors, giving the brand insight into how it can iterate on its offerings to provide an even more personalized experience,” says Dan Neiweem, co-founder and principal at digital services company Avionos. “This new store is really a win-win for both Nike and its customers. Customers get the personalized experiences that they demand, and Nike keeps their data to make better products and stores that are likely to disrupt the retail space.”
New in-store app features
Instant checkout is a new app feature available at the New York City store. With instant checkout, shoppers can scan any product on the floor and purchase it on the floor via the Nike app. The shopper can then go to a kiosk on any floor to bag her products and walk out of the store with her purchase.
Although Nike by Melrose test-drove the ‘shop the look’ feature, it had not yet been offered at quite such a large scale as the New York City flagship. Shoppers can scan any mannequin in the shop and every item it is wearing will show up in her app. From there, she can choose any (or all) items and select the sizes and colors, and then the items will be brought to a dressing room to try on. The shopper will receive an alert when her dressing room is ready.
“The store was designed to have this responsiveness, both digitally and physically,” Sussman says. Even the back-of-house area was designed to support Nike’s shop the look feature. On every floor’s back-of-house area in the New York City, all of the items that mannequins wear are stored together so employees can get the items to consumers quickly.
Nike plans to add more features to the New York City flagship shop and others as it learns more about its customers and what they want, as well as what services end up being successful. “The day we open the store, that’s the day we’ve got to continue to learn, reinvent and drive new innovations,” Sussman says. “Our platform allows us to scale these services anywhere this app exists. The things we find that are working, we’ll bring the best of those across our whole fleet.”
Next on the docket, Nike will open a similar flagship store next fall in Paris.
Nike is No. 27 in the Internet Retailer 2018 Top 1000.
Bloomberg contributed to this report.
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