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Nike’s New Live Store Concept Uses Data to Deliver on Local Demand

If there’s one thing Nike has learned from retail’s turmoil in recent years, it’s that the brick-and-mortar store, if anything, is more relevant than ever if it’s well executed.

Los Angeles’ Nike by Melrose shop with “pop-up vibes” is the first location launched under the Nike Live concept that will develop additional stores inspired by and serving as localized “hubs” for NikePlus members in the area. In Nike’s Q4 2018 earnings call on June 28, CEO Mark Parker described the Live shop as a “small format, data-driven store with its assortment influenced by what consumers are buying from surrounding zip codes.”

Parker added, “We see great potential on this approach, and you’ll see a lot more of it across our key cities,” included a planned spring 2018 opening in Tokyo.

The CEO emphasized just how important data and digital innovation are to the company’s future and to developing the next generation of retail experiences. “Digital is allowing us to realize our vision for smart retail to remove friction and personalize experiences through the intersection of digital and physical environments,” he said. “It’s sharpening our ability to sense the market through data and analytics.”

Nike by Melrose is carrying a mix of tried-and-true bestsellers, product staples for the running, training and sportswear categories—and styles tailored to the Southern California metropolis based on data such as buying patterns and app usage by L.A.-based customers. A first for the company, Nike plans to refresh the Melrose shop with new product, including a selection of exclusive items such as a Just Do It shirt offered at launch, every two weeks so “running and style obsessed” NikePlus members are incentivized to return. Here again, data is critical to how Nike “manage[s] our supply chain in our manufacturing flexibility [and] response time,” Parker said.

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Nike said it will be “holding back inventory” and reallocating its product flow process, abandoning the typical twice-a-season cadence at six weeks and 13 weeks for newness biweekly.

Because it’s designed for NikePlus members, the Melrose store leverages the mobile membership app to activate many experiences inside and outside of the four walls. Merging online and offline, members can reserve product in the app to try on in store, and then retrieve those items from a bank of lockers using their member pass. Members can also scan their NikePlus app to access a digital vending machine that dispenses product for those who have accrued redeemable rewards.

Nike’s focus on experiential retail is reflected in the Melrose shop’s Dynamic Fit Zone, which features a lounge for relaxing and a treadmill where members can put their gear through the paces prior to purchase. Nike employees, dubbed Experts, are on hand to style shoppers in need of fashion advice and properly pairing mix-and-match items. The company said members in need of intimate one-on-one experiences can use their NikePlus app to book 30-minute Nike Expert Sessions, also hosted in the Dynamic Fit Zone.

As competition heats up in the activewear space, brands are battling to prove they know what makes the wants, needs and habits of each market unique. Nike Live taps into the “mass personalization” sentiment behind Adidas’ city-specific sneaker rollouts, which to date have leveraged rapid Speedfactory production to create data-driven footwear for Paris, London and New York City.