To quote Andy Warhol:
“They always say time changes things, but you actually have to change them yourself.”

And this goes for every retailer out there. The nature of retail and the way we shop has changed (and is still changing), which means we have to adapt to this change if we want to exist in the future.

As Steve Dennis, strategic advisor, writer and keynote speaker on retail growth and innovation at Forbes, wrote in an article back in March:
“Physical Retail Is Not Dead: Boring Retail Is”

And this, according to vice president of Nike’s global stores Cathy Sparks, has been Nike’s motto when opening their new store concept Nike by Melrose.

Nike by Melrose is the first of their new retail concept “Nike Live”, which are stores built on consumer data collected from mainly local NikePlus members as well as local online purchasing data.

 

So, how are Nike using data to stay on top of retail trends and the change in consumer behaviour?

Localisation

The location was chosen because data and market analysis identified Melrose as an area with a dense population of NikePlus members, and from using insights taken from the brand’s local retail team. The name “Nike by Melrose” didn’t only originate from its location, but as reported by Fast Company “the store was built by the people of Melrose”. They used the collected data to analyse what stock they should carry in that store, based on local preferences and behaviour.

“About 15% of our apparel and 25% of our footwear is going to change every two weeks…if a color like yellow is trending with our customers, then we’re going to bring in yellow.” Cathy Sparks told Los Angeles Times.

 

Digitisation

The store is built in such a way that for customers to get the most out of their experience, they have to download the NikePlus app. This is genius because it means they’re constantly collecting data by encouraging their usership to continue to expand. And this can be used to advise future decisions based on trending retail patterns, such as product selection.

Plus, customers can reserve an item on the app and then pick up in store at a smart locker, or by using Swoosh Text. You can also use the app to scan items in store to get product and store inventory info, and if you want to try on something you can request specific items (you don’t have to be in store) that will be delivered to where you are in store or when you rock up. To get members to come back regularly, they can scan a code on the app at the NikePlus Unlock Box (vending machine) every two weeks for instant products or rewards.

Personalisation

In addition to being designed by and for the local area, they recognise customers as they enter a geofenced area around store. And the more they learn about their customers’ behaviour, the more personalised and customised they make the experience. For example, products might be put aside in that customer’s size automatically, even if they haven’t requested it.
Heidi O’Neill, president of Nike Direct, told Fast Company, “This kind of personalized mechanism online converts 40 times past any other mechanism Nike has in the field now. The store is the first time we can take that digital mechanic and apply it in a physical setting.”

Humanisation

One of the reasons consumers still go to physical stores, in addition to being able to see, touch and try on products, is the human element – having someone to ‘deal’ with. Nike by Melrose offer customers human interaction at their Sneaker Bar inside where customers can chat to experts in footwear (either by walk-in or pre-booked Express Sessions).

Convenience

The intent of the store is to “Make it easier. Make it faster. Make it more fun and let it be on their terms.” Sparks told LA Times. For example, to make it easier and faster for customers to return items, members can text the store ahead of arrival by using Swoosh Text and be met by a Nike employee in the parking lot when they rock up. And, like I mentioned earlier, they can pre-order items and pick them up from smart lockers. Too easy!

Grammability

In addition to these five trends it’s worth mentioning the ‘grammability’ of the store. They commissioned LA native artist Bijou Karman to create a mural on the outside of the building, and we all know how millennials love that colour backdrop for the ‘Gram’. Plus, the Sneaker Bar inside is modelled on a cafe or bar almost entirely made of shoe boxes – how cool!?

So, what should retailers take away from this?

When you decide to develop or redevelop your business strategy, consider these six retail market and consumer trends. BUT!!! The absolute biggest take-away is *excuse my shouting* USE YOUR DATA!! I can’t express how much there is to be gained from this. It’s like there’s a pot of gold sitting right there in front of everyone and no one knows what to do with it. If you know how to read and use your data, you know your customer. If you know your customer, you WILL be successful.

And if you’re not collecting customer data yet, I suggest you start ASAP to stay in the retail game!

 

To learn more about disruptive retailers, don’t miss our blog on IKEA’s new concepts.

Author Julie Schilvold

More posts by Julie Schilvold

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