Nike hopes W. Hollywood experiment saves stores

WEST HOLLYWOOD, Calif. – What Wikipedia has done for encyclopedias, YouTube for trending videos and Waze for traffic congestion alerts, Nike hopes to do with footwear and apparel.

In a word, it’s crowdsourcing – culling data from thousands of customers’ finger taps on their smartphone displays and using it to collectively dictate what merchandise should be stocked in a new concept store.

In opening its new Nike by Melrose boutique Thursday in trendy West Hollywood, Nike hopes it has found a way to bridge the divide between online and conventional shopping, solving a puzzle that has largely defied the best minds in the retail industry.

Nike’s experiment comes amid a sporting-goods retail meltdown over the past couple of years that led to the demise of several once high-flying chains, including Sports Authority, Golfsmith and Sports Chalet, as enthusiasts shifted to online shopping. But Nike, one of the world’s largest brands, still sees the need for stores.

“We don’t see physical retail disappearing,” said Heidi O’Neill, president of NikeDirect, but “the physical shopping experience connected to digital is really important.”

The new West Hollywood store, part of what is known as Nike Live, aims to directly link digitally collected data from users of the NikePlus app and other internet sites run by the sneaker maker with what happens in its retail space. Nike by Melrose will work like this: About 25% of the store’s shoe merchandise mix will rotate every two weeks based on the interest that users of Nike’s smartphone app and other company-run sites show in particular items. So, for example, if runners stop marveling at the Air Zoom Pegasus 35 on the NikePlus app and fall in love with the Epic React Flyknit instead, the stock will be quickly rotated to make sure more Epics are ready for buyers.

Data collection will be centered on NikePlus app users living within five zip codes near the new store, said Sean Madden, senior director of product for Nike Retail.

At Nike’s other stores, the turnover rate for the shoe inventory can take up to 45 days.

Customers who order from home via the app can then come to the store and can swipe their smartphone screen to unlock a compartment, like a vending machine. There they will find the merchandise they ordered.

Also, they can use their phones in various ways while in the store.

By scanning a QR code at a display, they can find if the sizes and colors of merchandise they may want are in stock. At Nike’s nearby flagship store, staff fields up to 200 calls a day asking whether particular items are in stock, said Michelle Warvel, a senior director for Nike stores.

If the customer wants to try on a pair of shoes or merchandise, they don’t have to ask for help from a clerk. They can scan the code on a label and ask that the apparel be delivered to a fitting room or to them directly so they can try it on.

“We have to serve the local consumer in a different way. We came up with this idea ‘speed shop’ which is to serve the local members fast,” said Cathy Sparks, vice president of global Nike stores.