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Even as it Takes the L on Taxes, Nike Invests in Tech to Get Closer to Customers

Nike’s turning to tech to elevate the in-store experience and serve its premium Nike+ customers, even as it posted a $921-million third-quarter loss in the wake of tax reform.

When it announced its Q3 2018 earnings last week, Nike called out some of the ways it’s shoring up a business that has seen stiff competition from Adidas and the return of the retro-cool brand.

The Portland-based athletic apparel and footwear giant is hoping its so-called “Nike app at retail” will personalize the in-store experience for shoppers, Mark Parker, CEO, said during an earnings call with analysts. Nike plans to launch the app in Q4 2018 in its Portland and The Grove Los Angeles flagship stores.

Nike’s taking a highly customer-centric and tech-savvy approach with its store-focused app. When customers enter a Nike store, the app will recognize they’re in a branded brick-and-mortar location, greet them by name and alert them to exclusive products nearby, Parker said. Using the app, shoppers can scan a product to discover inventory information for nearby stores, offering an “endless aisle” experience. But the biggest feature could be the seamless, app-based checkout that Parker described: no need to wait in line to pay for a purchase. Macy’s also recently announced it’s trialing customer-driven mobile checkout to solve one of its customers biggest gripes, as brick-and-mortar retailers realize that the store experience must evolve in order to reverse the negative foot-traffic trend. Plus, Amazon Go has drawn more than its share of attention to its cashier-free “just walk out” purchasing experience.

Acknowledging that customers browse online to inform their in-store experiences, Nike also will include a try-before-you-buy feature in the retail app, enabling customers to reserve product—held in a locker—so they can fit the footwear or garment prior to purchasing.

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In yet another major tech move, Nike also acquired Zodiac, a New York-based customer data and analytics company previously known as CLV Metrics that helps to predict future spending of shoppers who purchase from women’s retailers. Zodiac had raised $3 million in seed funding prior to the acquisition.

Though beefing up its data prowess will help to build stronger relationships with its total customer base, Parker said the “primary focus” will be on Nike+ members, who get special access to exclusive products, classes and events, and more through their membership. Parker attributed some of the e-commerce site’s 18 percent growth to the debut of Nike+ membership program.

As they search for answers and customer insights, retailers are paying greater attention to data and investing in tools to create products that will better resonate with customers. “Better analytics are also a critical factor in our 2x speed initiative,” Parker said. “As we sharpen our consumer sensing we can meet demand faster and deliver more relevant personalized products.”

“The acquisition of Zodiac demonstrates our commitment to further accelerating Nike’s digital transformation and enhancing our consumer data and analytics capabilities to help us serve consumers globally,” Adam Sussman, Nike Inc.’s vice president and chief digital officer, said. “We’re adding world-class data-science talent and best-in-class tools to power 1:1 relationships with consumers through digital and physical consumer experiences.”