- Nike just opened a new store, called Nike by Melrose, in Los Angeles.
- It's the first Nike Live concept store, which seeks to maximize speed and convenience by combining digital offerings with a 4,000-square-foot physical retail location.
- Digital has been a huge focus for Nike recently as it continues to boost its offerings. The brand's online sales rose by 41% in its most recent quarter.
LOS ANGELES — Nike by Melrose is open for business.
It's the first of the company's Nike Live concept stores and got its name because it sits literally on Melrose Avenue, in the heart of Los Angeles' West Hollywood neighborhood.
The "by Melrose" name also comes into play because the store is filled with products that local customers frequently purchase.
"There's a double entendre there that I love," Heidi O'Neill, president of Nike's direct-to-customer business, said to Business Insider.
Nike uses data from online purchases to inform the product the store stocks, turning it into a representation of favorites of customers in the area. Much of this information was gleaned from customers using Nike's online services, whether they were shopping on Nike.com or were members of Nike Plus.
For example, Los Angeles-based customers buy a lot of the Nike Cortez, a retro-styled, low-cut sneaker. Nike knows that from observing their shopping habits, and so it can then stock more of the shoe in more colors and feature it prominently.
The store is stocked with products in categories like lifestyle and running, which are two of Nike's most popular, and is predominantly focused on serving customers who care about both style and fitness. The store stocks both men's and women's products but allows for variation based on each gender's preferred styles.
A digital, 21st-century store
NikeThat marriage of digital prowess and physical store experience is the hallmark of Nike Live stores.
"This much more represents how consumers are thinking about shopping. They don't put the wall up between physical and digital," O'Neill said.
Customers can use the Nike retail app to scan products' bar codes and find out more information about them, including the sizes and colors the store has in stock.
Another first for the brand: much of the store's stock — including 25% of its footwear — will refresh every two weeks, bringing in items that are new, popular, and sometimes completely unique to the store. That's three times faster than a typical store refresh.
The back half of the store will not rotate and will instead be filled with "365 favorites" that are divorced from seasonality. Think of it like the physical version of a "best-sellers" tab you typically see when sorting products online.
Service with a speedy digital smile
The new store is also built around customer service, including an in-app offering that allows customers to come in and try on pre-reserved shoes. The shoes are stashed in a locker that they can open with a scan of their smartphone.
They can also ask for shoes to try on from the central "sneaker bar," which operates like a customer-service station and sales point all in one.
Many of these services were developed with speed in mind.
"When we talk to our consumers in LA, they said, 'We want it fast,'" O'Neill said.
Nike Express Sessions, 15-minute-long appointments Plus members can book with a Nike representative, are for customers who don't know what they want and would like help figuring it out. That's shorter than the usual Nike Expert Sessions, which last half an hour. Customers can test out the apparel on a treadmill in the trial room.
Don't want to come in to the store at all to make your purchase? Using a text-messaging service called SwooshText, you can make a purchase and have it delivered to you from the limited parking lot in the rear of the store, much like a curbside pickup.
The store also offers complimentary tailoring services and a vending machine that spits out free gifts for Nike Plus members.
The future is going Live
Though Melrose is the first Live store, Nike has already said it won't be the last. It's currently planning new locations in key cities around the world to open in 2019, including a location in Tokyo for the spring.
The concept may morph and change as time goes on, and Nike says it will use the store to "test and learn." For example, at the time of launch, the store is 50-50 men's and women's product, but depending on shopping demographics, that could change.
"This is a lab for us," O'Neill said. "We're going to learn. We're going to respond. That's the whole idea of Nike Live — let's be live and respond."
Future Nike stores, like the flagship New York store currently slated to open this fall, will likely incorporate some elements of what Nike learns from Nike Live, and there will even be a mini version of the store with its own entrance.
"The services you're seeing here won't just be for Nike Live ... they'll be for all of our stores as we learn and expand," O'Neill.
It makes sense for Nike to embrace digital so full-throatedly. In its latest earnings report, the company said that digital sales rose by 41% in the most recent quarter and contributed to a 13% sales increase overall.