Author(s): Raghu Gopal
Last week, Nike opened a new flagship store in New York. The athletic goods company calls it the House of Innovation, as it blends aspects of the physical and digital shopping worlds and lets shoppers customize items.
The massive six-story building is an example of how brands are working to modernize retail, taking into account the ubiquity and constant use of smartphones. In fact, Nike has built the entire shopping experience around a dedicated app that supports features such as Instant Checkout, Shop the Look and Scan to Try.
As we've highlighted previously, checkout-free shopping, though still a rather awkward experience in some ways, is becoming an increasingly important trend. Amazon pioneered the concept with its Amazon Go automated stores, and other big names in retail are following in its footsteps (see The Cashier-Free Trend Spreads). At Nike's new store customers can walk in, pick an item, scan it through an app and pay for it with a credit card, all without having to flag down an employee for help — although staff are available throughout the building.
The new shopping experience allows customers to walk up to a mannequin and use the app to scan a QR code that displays the outfit on their smartphone. They can then select a size and have the clothes sent to a fitting room, or delivered to a dedicated pick-up zone in the shop. The company has also dedicated an entire floor to its Nike Speed Shop, where it uses data to stock shelves based on what's popular among the local community. Nike's hope is that this approach will offer customers a more fluid experience.
The space, located on Fifth Avenue, just a stone's throw from Apple's well-known "cube" and Microsoft's own experience shop, is more a showcase for technology than sports clothing. Its location and size make this a major investment, even for a massive company like Nike. But this sort of display is becoming an important part of brand-building, demonstrating that companies understand and can keep up with consumers' changing behaviour.
As many traditional bricks-and-mortar retailers struggle to adapt, and e-commerce companies pile on pressure, Nike's effort to link the digital and in-store experiences is as much about building relationships with its customers as it is about boosting sales.