Nike, the biggest apparel company in the world, is in the midst of overhauling its business in a few major ways: One is the initiative it launched in 2017 called Consumer Direct Offense, a plan to leverage digital and target specific cities to engage consumers more personally and grow direct-to-consumer sales, while also reducing wholesale distribution.
The other is Move to Zero, a campaign Nike launched in September to inform consumers of its commitment to sustainability and "journey towards zero carbon and zero waste" (albeit without much of a concrete plan to get there as of yet).
These two initiatives, as well as the brand's recent focus on its women's business, are pretty fully realized in the athletic brand's newest retail space — an expansion of Nike Live, its first concept in Long Beach, Calif.
Nike piloted the first Nike Live in July of 2018 in Los Angeles proper, on Melrose in West Hollywood. The idea was to have smaller, digitally-enabled and service-oriented space built specifically for shoppers living in that area. The idea felt similar to the new Nordstrom Local concept that the department store had just opened down the street, but Nike Live does have some inventory, stocked with basics that people in the area tended to buy a lot of online.
It also caters specifically to members of the NikePlus loyalty program and users of its mobile app. Customers can reserve things to try on, buy online/pick up in store, pick things up without getting out of the car with curbside service, as well as get bra fittings, styling sessions and alterations. As a perk, members can redeem free gifts, which are refreshed monthly, from a vending machine-like device called the "unlock box" in the store by scanning their phones.
The space served as a testing ground, and evidently the concept worked. This week, Nike opens the second and third Nike Lives: in Long Beach and in Tokyo, Japan.
The decision to open up the area's second Live concept in Long Beach largely boiled down to analytics of local Nike customers' shopping habits. "One of the things we're able to do now is consumer insights and analytics, to really bring those two together and talk about the biggest opportunities," Blanca Gonzalez, VP/GM, Nike West Territory, explained during a tour of the space Wednesday. "We call it consumer zones, which is mostly zip code- or city-based and we saw there was a huge opportunity in Long Beach. There was not an incredible point of distribution for Nike at this level, when there's a huge consumer base that loved our brand. This community loves sport and fitness."
Nike also felt it served as a convenient hub between nearby L.A. to the north and Orange County to the south. The store is located inside one of Southern California's many outdoor shopping centers, a new one near the Marina called 2nd & Pacific. In addition to a massive Whole Foods, the center houses a number of workout studios, whose customers Nike clearly hopes to serve (though it will have a little competition from Athleta a few feet away). The location will also serve as a hub for events and activities like Nike Run Club and group workout classes with nearby studios like Barry's Bootcamp.
Physically, the space is about 1,000 square feet larger than the Melrose location and its design implements some learnings from what did and didn't work there. The space is more open, with plenty of seating, which Gonzalez explained was something customers wanted more of from the Melrose location. A focal point of both locations is the sneaker bar, where shoppers can purportedly have a pair of shoes brought to them in just 10 seconds, but at Long Beach it's located in the back, so as not to create a traffic jam of sorts in the middle of the store, and to allow more privacy for one-on-one consultations.
Interestingly, the new location also focuses more on human connection than the first iteration. In place of tons of interactive screens everywhere, the Long Beach shop features handwritten notes throughout from store athletes (what Nike calls its sales associates) detailing a new collection or a personal favorite piece in the store, sometimes alongside a polaroid photo of the athlete wearing that item.
"Sometimes a handwritten note is the best thing we can do vs. putting a lot of tech in front of the consumer," said Gonzalez. "It's a very intimate space so we want to foster that relationship." And if shoppers want a more digital experience, they have the Nike app. Users can scan barcodes on items' tags to see more info on it, and even check out then and there, whether they want to take home that very item or order it online.
Another thing that didn't quite work out when Nike Melrose opened was the assortment: Basing inventory on basics people tend to buy online backfired a bit in the sense that people continued to buy those things online. Now, it's a mix of favorites and products shoppers may like but haven't necessarily discovered yet. It also feature's more women's product — it's a pretty even split between both genders. "Women's will be a huge priority," said Gonzalez. Additionally, new merchandise arrives every two weeks.
A feature that did work, perhaps overwhelmingly well, was a new texting service: Each location has a phone number shoppers can use to text athletes and ask them pretty much anything. "The first week [of the Melrose store opening] we got over 1,000 unique texts, so many people texting, 'Hey, do you have this, do you have that?' said Gonzalez. "A lot of our athletes built really great relationships with the local community there. The texting thing was also a huge surprise for us — we hadn't done that before. It's been open 18 months and it hasn't stopped."
And there's one feature that's brand new to Nike retail: mannequins made entirely out of what Nike calls grind, which is made from ground-up sneakers. The store's display hangers, floors and some of its walls and tables are also made of grind, while the fitting room curtains are made from recycled fabric scraps. These sustainability-focused features will be a conversation topic for athletes. "We know it is super important for consumers and the world," says Gonzalez.
Ultimately, the store's sustainability features, while not bad, feel like they're more about messaging and getting shoppers to think of Nike as a sustainable company than making a real impact. As the conversation around sustainability and waste evolves rapidly, it feels like the bare minimum of what a massive retailer like Nike should be doing, but it's likely we'll see some bigger moves in the near future.
Similarly, with its focus on localization, loyalty, service, convenience, digital integration and experience, Nike Live isn't quite light years ahead of other innovative retail concepts, but it's right there with them, fueled by the resources and data analytics such a massive company has access to. (Though, to be fair, it did feel more groundbreaking even as recently as 18 months ago, when the Melrose location opened.) It shows that Nike doesn't rest on its laurels, which is crucial in a turbulent retail landscape, and a lot more than we can say for other retailers that have been around as long.
Nike execs confirmed the brand will roll out more Nike Live locations across the country and internationally. Until then, see more of the Long Beach shop in the gallery below.