Nike´s new retail approach: curated stores

Nike by Melrose curated new concept store in LA omnichannel customized product

Nike recently opened its first new concept store: Nike by Melrose, in Melrose Avenue (LA). The retail approach is brand new and takes into account the latest trends in fashion such are customization, localized assortment and omnichannel. In this store, product (footwear and apparel) mix is unique and exclusive, different from other Nike stores, and powered by the trend in and around the city of Los Angeles. The assortment is based on the analysis of online purchases and Nike Plus sell tracking in the same area.

Nike is getting closer to fashion, stocking the latest styles but refreshing them on a weekly basis. Their staff is made of Nike Experts, that know about sports, trends and what´s hot in the neighborhood. This reminds me Zara´s collection strategy, with fresh product every week and a big understanding of trends thanks to their associates feedback.

Nike Melrose curated new concept store in LA fashion retail

A Live Store

Nike is not able to produce in less than one month, like Zara, but data is enabling the behemoth from Beaverton to update its assortment during in-season. The store is so-called Live Store because its product mix is not static and changes according selling trends (online and offline). And not only assortment will adapt to real-time sales but also macro and micro space planning (e.g. layout distribution, visual merchandising guides). If today 50% of the store layout is dedicated to men, this could change in the near future, for example.

A Live and Curated store responds to the need of giving a different experience to customers that are bored of standarization or McDonaldization (same layout, same burgers, everywhere). Customers want to feel a unique experience depending on location. In fashion, shopping the same sneakers in Barcelona and Tokyo is not as cool as a few years ago. Product and experience curation are key levers for offline survival.

In fact, online is also looking for a unique, curated offer. Amazon launched Amazon Storefronts, a site that offers more than one million curated and high-quality products, from small & medium businesses in the US, and recently opened a 4-star store in Soho (NYC). Again, it´s about the right product in the right place (assortment and store clustering).

Fashion Retail Digitalization

Nike store in LA also offers special services like Instant Reserve, which “lets you find and reserve new releases every two weeks to pick up in your locker, curb service so you can make your exchange or return on the fly and a full Nike Sneaker Bar for expert knowledge and service”.

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Assortment and Store Clustering in Fashion retail

Assortment optimization and store clustering is nothing new, but Nike shows a modern approach or at least some capabilities that are lead by pure fashion retailers. A best practices in fashion retail is to cluster stores beyond store size or sales. Data analytics permits to understand customer behavior at store level taking into account customer profile (e.g. sociodemographics, sizing, etnicity), CRM insights from loyal customers, weather or location. Regarding location, the potential is great thanks to geolocalization insights that can show what are the competitors around the store or other important places that can increase sales like having a train station or university close to the store.

Nike curated new concept store clustering assortment Melrose LA

Once stores are grouped according these filters, assortment can be optimized at cluster level using product attributes (e.g. seasonality, fashionability, feature, fabric).  This process is more complex, and starting from strategy, every category of products are first segmented according customer needs and shopping missions. Without going more into the detail, every cluster (group of stores) will have an optimized assortment.

At Nike by Melrose, the assortment is based on data from what consumers in surrounding zip codes have purchased. But store-level approach, not cluster level, is something very difficult to scale. Anyway, it´s also a marketing strategy and we will see if Nike redesigns its complete retail channel based on curation. To be honest, I don´t think so, but it´s a good starting point to adress customer-centricity. I´m sure Nike will open new curation stores soon, as new local flagships will substitute traditional, boring macrostores. A trip is worth when the experience is original.

Next cities to open, I guess, are London, Tokio, New York, Sydney, Paris, Copenhague, Barcelona…

19 responses to “Nike´s new retail approach: curated stores”

  1. […] Curated Stores: best practice in optimized phygital assortment with the use of machine learning (NIKE by Melrose) […]

  2. […] Nike by Melrose (LA) is another interesting store concept that includes curated assortment (in-store sales and e-commerce “listening”), omnichannel capabilities and customization, while stocking the latest styles and refreshing them on a weekly basis. Their staff is made of Nike Experts, that know about sports, trends and what´s hot in the neighborhood. […]

  3. […] companies in the fashion industry are already offering curated or store-specific assortments, like Nike by Melrose store in Los Angeles. The assortment is based on the analysis of online purchases and Nike Plus […]

  4. Fascinating, if not entirely surprising, developments. Especially from Nike. They’ve demonstrated their commitment of trying to make a deeper connection with their customers. This type of localized curation based on the community’s retail habits is another way that brick-and-mortar retail stores are taking something of a parallel path when it comes to competing with e-retailers.

  5. No one does visual merchandising so well like the fashion or luxury sector. They do it too well. This is because they spend so much on understanding consumer behavior. Most physical stores do not realize the importance of in-store layouts on sales. Efficient store clustering can drive up retail sales.

  6. Thanks for your comments! I agree that fashion retailers are best-in-class when it comes to visual merch, window display or understanding a product ecosystem. I recommend you https://fashionretail.blog/2018/12/03/customer-experience-in-fashion-retail/ where you can find other examples of excellent product presentation or in-store experience, not only fashion.

  7. […] 2. Another omnichannel capability is Assortment Optimization (optimizing the merchandise) at store level using offline and online data. This is something commented on Nike Curated Stores. […]

  8. […] with localized assortments. This is what we described in Nike by Melrose new store format, a curated store. Stores that renew their assortment every week/month according to what the customer, in the area, […]

  9. […] Nike New Digital Stores – Melrose: the community store […]

  10. […] by Melrose is the new curated store from the company from Beaverton in Los Angeles. Stores that renew their assortment every […]

  11. […] trend in retail is local, neighborhood, curated stores (H&M Mitte Garten, Nike Live stores) Nordstrom Local are convenient hubs for online order pickup, onsite alterations, fast and easy […]

  12. […] trend in retail is local, neighborhood, curated stores (H&M Mitte Garten, Nike Live stores) Nordstrom Local are convenient hubs for online order pickup, onsite alterations, fast and easy […]

  13. […] Having the right quantity of stock and the right styles like H&M is testing in Berlin or what Nike calls Live Stores. Stores should allow to find the most successful items for the customers in that specific location […]

  14. […] companies in the fashion industry are already offering curated or store-specific assortments, like Nike by Melrose store in Los Angeles. The assortment is based on the analysis of online purchases and Nike Plus […]

  15. […] Leading apparel retailers are opening new store formats (e.g. H&M hyper-local stores or Nike Live, Unite and Rise formats). On the one hand, stores are redesigned to offer lower inventory levels […]

  16. […] transformation. “New threats, new opportunities” as seen with new store formats at Nordstrom, Nike or H&M. Do you plan to open a physical store or pop […]

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