New Nike concept store goes Live in LA

Experiential doesn't mean the same for every brand, concept or customer. That's a lesson the retailer is taking to heart as it iterates on the future of direct-to-consumer stores.

These days, brands are tripping over each other to create personalized experiences that will draw customers into stores and keep them coming back. Retailers and brands have opened pop-up and concept stores galore with varying degrees of success.

But experiential doesn't mean the same for every brand, concept or customer. That's a lesson that companies like Nike are taking to heart as they iterate on the future of direct-to-consumer stores — and localization is key to making it all work.

The way Nike thinks about converging physical and digital worlds may be most clearly represented in its latest concept, Nike Live. The first such store, Nike by Melrose, is a 4,557 square-foot, single-level space located at 8552 Melrose Avenue in Los Angeles. The store, which has "pop-up vibes" but won't go away anytime soon, is nestled along a fashionable, upscale retail strip in a neighborhood also home to single family houses and premium apartments. It's also just an eight minute walk from Nordstrom's Local concept, which similarly uses data to personalize its store to fit the local community.

At its core, Nike Live aims to reflect the needs of its "sport and speed obsessed" NikePlus members in the community by using data to personalize experiences, services and its product assortment.

From ideation to open doors, the process took about eight months, Cathy Sparks, VP and GM of Global Nike Direct Stores, told Retail Dive in an interview. To Sparks, who worked on the concept with a core team of 12 people, the store is like a baby. And if it grows up quickly, the aim is to scale the model, as well as specific services and features, to the company's U.S. store fleet and beyond.

Is localization the future of stores?

Nike Live is the brand's first concept that is declaratively dedicated to being a hub for members. "We need our stores to better reflect the consumers in that marketplace and member insights is how we will do that," Sparks said. "The future of service will be very personal. We will know you so well we will be incredibly relevant with the product we give and the services we offer."

For the new store, that means catering to a "style and fitness customer" who loves to look good, workout, is style conscious, spends time with friends and expects high service levels, Sparks added.

Inside the first Nike live store in Los Angeles.
Credit: Nike

Targeting the most engaged customers is something industry experts see as a step in the right direction. Member activity increased 48% over last year, according to data provided by Nike.

"Best customers are the place where you want to make the investment," Matt Powell, vice president and senior industry advisor for The NPD Group, told Retail Dive in an interview. "They have a greater affinity for the brand, buy more than the non-customer and the cost of acquisition of non-customer is high."

Hyperlocalization is one of the key trends today allowing retailers to get to know their core customers in a deeper way, but localized assortments often struggle when it comes to implementation, Matt Sargent, senior vice president of retail for Magid, told Retail Dive in an email.

"Many retailers rushed localized concepts to market," he said adding that he owns a Patagonia T-shirt "localized" to Minnesota featuring snow-capped mountains, which don't exist in the state.

"Nike is addressing this up front by letting the enormous traffic they generate on their website steer the merchandising. This gets to a core desire of millennials, which is to take part in a brand's development."