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Nike knows what Angelenos like to buy. Its new data-driven store will stock those products

Nike knows what Angelenos like to buy. Its new data-driven store will stock those products
The "Sunsets on Melrose" mural on the new Nike by Melrose store in West Hollywood was painted by L.A. artist Bijou Karman. The store is the first Nike Live concept store, which aims to merge digital and physical shopping. (Myung J. Chun / Los Angeles Times)

Nike launched another of its retail-of-the-future experiments Thursday in West Hollywood, opening a concept store that aims to lure the digital shopper with personal services and experiences. And the products are chosen based on the shopping preferences of local users of a newly enhanced NikePlus app.

To do this, the shoe and apparel maker drilled deep into its huge customer base, looking for a spot in the Los Angeles area where Nike customers were already loyal to the retail shoe giant and most willing to voice their opinions on what they want.

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One of those areas was a five ZIP code region in West Hollywood. That’s why the company’s Nike Live project is located on Melrose Avenue and dubbed Nike by Melrose.

The store targets the customer “who is very fit and exercises often but who also cares a lot about how they look” when they are exercising, said Cathy Sparks, vice president and general manager of Nike Direct Stores.

“This store is meant to take everything we know about our customers digitally and, with the new Nike app, use that to elevate their shopping experience,” Sparks said. “Make it easier. Make it faster. Make it more fun and let it be on their terms.”

One of the services at the new Nike by Melrose store in West Hollywood is a reserve pickup locker.
One of the services at the new Nike by Melrose store in West Hollywood is a reserve pickup locker. (Myung J. Chun / Los Angeles Times)

Nike’s latest effort comes at a time when picking a winning lottery number might be easier than predicting retail’s foggy future. Longtime chains have gone under, and shopping malls are struggling to keep tenants and attract customers.

So retailers are trying new things. Online stores are opening brick-and-mortar locations. Storefront retailers are beefing up their online presence while pushing customers into physical stores with package pickup.

In October, Nordstrom opened an experimental store called Nordstrom Local in West Los Angeles where customers can meet with a personal stylist, have clothing tailored, get a manicure and sip an espresso. But there are no clothing racks to browse.

The idea has been successful enough for Nordstrom to announce it will open two more of the stores in Southern California.

New concepts such as Nordstrom Local and Nike Live can be difficult for legacy retailers to implement, said Denise Lee Yohn, an author and retail brands expert.

“To pull off all these new capabilities requires a lot of logistics, agility and tech savvy,” Yohn said.

“Most retailers struggle with technology adoption not because of the technology per se, but because of their entrenched culture and operations,” she said. “Retailers have been operating under the same model for decades, so unlearning old habits and learning new ways of working can be difficult.”

This isn’t the first time Nike has opened a concept store.

Nike Soho, for example, opened in New York in late 2016 with a small indoor basketball court, technology-enhanced treadmills and special sensors allowing customers to have a sweaty trial run with their purchases.

The new Nike by Melrose effort comes after Nike conducted a year of research and analysis of customer behavior. The data showed that Angelenos are obsessed with running, style, basketball and sneakers.

A display of women's shoes at Nike by Melrose in West Hollywood.
A display of women's shoes at Nike by Melrose in West Hollywood. (Myung J. Chun / Los Angeles Times)

The store’s product mix will be generated directly by what customers are buying — or not buying — and that will represent something of a challenge to the way Nike stores traditionally operate.

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“About 15% of our apparel and 25% of our footwear is going to change every two weeks,” Sparks said. “That’s a really big deal because Nike has never turned around products that quickly; usually it’s 30 days to 45 days.”

To determine what to stock, Sparks said, “we will use member insights. ... If one thing isn’t working, it’s going to go. If a color like yellow is trending with our customers, then we’re going to bring in yellow.

“We intend this to be reactive,” Sparks said, “because this is our very first store of this kind and we have a lot to learn.”

The store’s services include what the company calls “swoosh texting” for “real time customer service.” There will be curb service for shoppers in a hurry. Those with more time can book a session with a store expert who can help them choose the right gear.

Customers also can buy through the app and then find their purchase waiting in a small locker for pickup. The store will have a 30-day “no questions asked” return policy and even will provide a small amount of tailoring services, such as hemming new tights and pants to get the optimal length for the buyer. A sports bra service will “help you find your perfect fit,” according to store literature.

The store layout is also experimental. At the entrance are Nike’s latest products, gleaned from what the company thinks could be popular. At the rear are the products that customers in this section of West Hollywood already have named their favorites, such as running pants for women and hoodies for men.

Teen tourists from the Philippines get their picture taken in front of the mural at the new Nike by Melrose store in West Hollywood.
Teen tourists from the Philippines get their picture taken in front of the mural at the new Nike by Melrose store in West Hollywood. (Myung J. Chun / Los Angeles Times)

Out front is a mural for the selfie crowd painted by Los Angeles artist Bijou Karman.

Michael Martin, Nike vice president of digital products, was a member of the team at the company’s Beaverton, Ore., headquarters that added new features to Nike’s existing app that are triggered by the Nike by Melrose location.

“The app gains a suite of features that unlock themselves any time a customer comes within 100 meters of a store,” Martin said. “At this point, we are doing that at only three other stores where we have run it as a pilot. That’s in Santa Monica, at the Grove in Los Angeles and a store in Portland.”

Martin said one of the more important new features was something called “scan to try on.” If, for example, the preferred shoe is not in stock, the customer can buy it online.

“But if we do have it in stock, the customer can just press a button at the bottom of the app window. The phones will ring for every salesperson, and whoever is closest will just bring it out to you.

“It gives you that moment of delight,” Martin said. “It can be magical when you enter a store and someone is immediately standing next to you, with your shoes in their hands.”

Sparks said the next Nike Live neighborhood store will open next year in Tokyo.

Yohn expects the store will be a hit.

“It certainly differentiates Nike, will generate lots of traffic and make their brand more valuable,” she said.

“The future of retail is personal — customers want what they want, when/how/where they want it — and it sounds like Nike is using tech devices and data to help serve customers’ individual needs.”

Nike thinks its new concept store will find the retail sweet spot between brick and mortar, online sales, and direct customer contact.

12:50 p.m.: This article was updated with analysis from retail brands expert Denise Lee Yohn.

This article was originally published at 10 a.m.

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