Nike is bringing some features of its mobile app to life in a new Los Angeles concept store that can adapt to consumers’ changing tastes and demands in real time.
Nike Chief Digital Officer Adam Sussman said the interactive Nike by Melrose store, which officially opened its doors on Thursday, is the first of what he hopes will be a string of next-generation store launches. The second one will likely launch this fall when Nike cuts the ribbon on its new 69,000-square-foot flagship store based on New York City’s Fifth Avenue.
“We’re going to learn a lot from this store,” Sussman said about Nike by Melrose. “We’re going to continue to learn and pilot new things, and as we learn we’ll bring it to our other stores.”
The concept store features new levels of interactivity that are specifically tailored towards NikePlus members. NikePlus is a free membership program that works through the Nike app, and which unlocks exclusive deals for loyal customers.
One of those perks will be a vending machine-like experience called the Unlock Box that will reward NikePlus members with free merchandise, such as socks. Store visitors can use their membership code to redeem a gift from the box every two weeks.
Borrowing from the NBA Store’s self-service lockers, Nike by Melrose will also have its own version of unlockable boxes for in-store pickups from online orders. Customers can check the store inventory for sizes through the NikePlus app and then reserve as many as three items for up to 24 hours to be picked up at their leisure.
While in the store, members can scan products through the app to learn more about them or to alert a sales associate that they need assistance finding a particular size. Sussman said store employees will be informed immediately and will be able to deliver the product to customers within a few minutes.
Perhaps most interesting about this new digital-physical concept, however, is how Nike will leverage user data from the app to make near real-time changes to inventory. Ahead of the Nike by Melrose opening, for example, the company parsed local membership data and found that one in every 50 shoes purchased were Cortez-style sneakers, as well as running shoes. The store was packed with both at launch, and the inventory will change as often as biweekly as consumer tastes evolve.
“It’s the first time we’ve used our knowledge of our customers to build not just an experience but a product assortment,” said Sussman. “It’s all about finding different and better ways to serve our consumers—to be relevant and more personal with them.”
Nike by Melrose comes at a pivotal time for Nike, which has been aggressively expanding its online offerings and membership benefits (such as with Headspace guided runs and the NikeConnect smart shoe via the SNKRS app) to better connect with customers. Earlier this year, Nike acquired Israeli augmented reality company Invertex in a move that deepened its bench of tech talent and gave it new AI-based tools to target customers.
Nike’s digital transformation efforts may be starting to pay off. Last quarter, Nike Digital revenue climbed 30 percent year-over-year, led by NikePlus membership gains. Commerce from its apps drove nearly 40 percent of total Nike Direct revenue.
“Those two stats are indicative of the momentum we’re building,” said Sussman. “It feels like we’re starting to connect with consumers in away we haven’t been able to before.”