Nike gives us its NYC House of Innovation 000: After a decade of brands conceptualizing digital shops

Image source: Fashion Network

Last week Nike opened its Innovation store in New York City about a month after its first ever Shanghai store was opened. The store is full of attempts, some to respond uniquely to the function of brick-and-mortar retail space in today’s landscape by dissolving online convenience and offline experience. A lot of attempts at experience stores have been made after Amazon started to sell more than books and DVDs about a decade ago. As I follow this topic, I wanted to visit the store and see if I can witness the Nike version of the answer.

Nike House of Innovation 000: Inside the Swoosh’s Insane 68,000-Square-Foot NYC Flagship | Highsnobiety

Friction in Brick and Mortar

What has expanded e-commerce to become much bigger today is the convenience. A lot of online companies attempted to solve pain points that customers faced. Many brick-and-mortar retailers tried to learn from what online companies did and solve those pain points, while they still have to justify why stores should physically exist on some very expensive properties. For example, pickup at the store is extremely popular options for immediate needs of the customer; Some shipping services are not 100% reliable and that contributes to the popularity as well. Nordstrom Men’s NYC pushed that further by introducing the pick-up station and the midnight curbside pickup. (Nordstrom Men’s NYC: Why mens, and why brick and mortar store now?) Nike House Innovation 000 also provides the pick up station in the basement floor with a separate entrance for quick access.

In addition, the payment process in stores is extremely tedious. My personal experience with other conventional Nike stores was long lines to the register. A lot of digitized stores have challenged this issue. Rebecca Minkoff NYC flagship opened in 2014, packing a lot of cutting-edge ideas into one store. The shop used the technology of RFID developed by QueueHop to detect product; customers can pay on an iPad instead of at the centralized register. The experience is far from a “just walk out shopping experience”, especially since customers have to take off the RFID tag from the product and require interaction with staff to get the product packaged.

The experience is self-checkout at drug stores (Source: engadget)

Nike, on the other hand, relies on a similar experience on their Instant Checkout app. Customers can purchase after scanning QR codes attached to items with their personal devices. It’s better since customers can use the same logged in account for any purchase on their personal devices. A unique idea occurs after the transaction. Customers can drop their items in drop-off stations placed throughout the store. The intent is so their purchased items will be properly packed behind the scene, also customers don’t have to worry about being seen as stealing items. I would imagine the operation is only possible with right store scale and right headcount, so Nike must have nailed that down.

Items can be found using ‘shop the look’ via the NIKE app (Source: designboom)

Trying out items in real life is one of the joys in physical shopping but it still requires a lot of interaction with shop staff. Digital ideas can help reduce the pain-points, and Nike shows how effective that can be with shoes. In a regular shoe shopping experience, customers have to ask an associate for their size first unlike clothes shoping, which is easier to display all different sizes. In Nike, a size request can be done in the app and then shoes will be brought to customer. The Rebecca Minkoff store handles similar pain point in fitting rooms using mirrored touch screens. Customers can request different sizes, see more details about items that they are trying, and browse similar items, without putting their clothes back on to got outside of the dressing room and work with an associate.

Browse items with mirrored touch-panels in Rebecca Minkoff store (Source: Retail Innovation)

Entertainment

While some brick-and-mortar stores are redefining their values by reducing customer pain points with much more competitive return policies and free and fast shipping, it is getting harder to justify stores only by the advantage of trying clothing in real life. Now, more retailers are making their spaces much like entertainment destinations. Traditionally, department stores have incorporated seasonal festive activities, such as Macy’s Santaland to take childrens’ photos with Santa Claus. Unlike how Rebecca Minkoff store speaks about the convenience aspect of what digital can provide to retail, Nike store seems to be more about amplifying its brand image and seeking entertainment in apparel construction and hype.

For example, when you come into the store, the gigantic chandelier, a collage of screens, lights and armatures, is hanging in the main stairwell. This “sport beacon”, almost looks like a satellite that came from a dystopian movie set, is there for people to take photos… and share. Similarly, another kinetic sculpture with a series of threads, which is soothing to see surrounded by promotional videos, is situated on the NIKE footwear floor. If it’s for a normal marketing gimmick, they would probably choose simpler massive screens that can display different video that can resonate with different seasons, styles and lineups. However, this TV-promotion approach is losing its value since it is proven that similar messages can reach customers’ personal devices and that is more effective. Especially, large promotional videos at store fronts do not speak to customers’ impulse to share, nor are they connected to their share channels.

The ‘sport beacon’ catches customers eyes immediately as they enter the store (Source: designboom)

“We’re competing for entertainment… Consumers get bored, and this is the most responsive and personal store we’ve ever built.”

Sean Madden, senior director of service and experiences for Nike’s direct-to-consumer division

Exclusive Services

A physical location can provide exclusivity that online cannot achieve as effectively. Nike NYC House of Innovation 000 provides exclusive collections at the store, namely the Noise Cancelling series. The concept is to getting rid of noises around NYC and being able to add each one’s own noise. It’s about how that can be reflected in sneakers. The white on white five most iconic sneakers represent when sneakers subtracted all noise. At the store, customers can add their own colors to them, and they can be inspired by the history of the Air Jordan and collaborations with notable athletes that are displayed in the store. The exclusive item strategy, which Supreme accomplished massively, works well with having locations and adds new value to brands.

White on white 5 most iconic sneaker form from noise cancelling series (Source: Nike)

As the basement floor caters toward local customers with pick-up stations, the rest of the floors are themed differently and are more for people who come here for fun like tourists. For exclusive Nike Plus members, they have personal advisers and this membership unlocks certain exclusive products at Nike expert studio at the top floor of the store. This is almost comparable with Stitch-Fix. It is up to the preferences of the customer whether they like to be assisted in real life or if they feel more comfortable online. Nike has a strong advantage because their brand relates to the body and sports. I can imagine a relationship such as with a personal coach or body counselor can be developed with a fashion consultant in store over time.

Fitting rooms within the NIKE expert studio (Source: designboom)

Outside of Apparel

Earlier I mentioned how only removing customer pain points within the shopping experience may not be enough to justify going to apparel brick-and-mortar stores. The apparel giant Nike tried to merge digital technology with theatrical experience to justify a store. However, that may not be the case for everyday commodities when true “just walk out shopping” was achieved. Amazon Go tries this with a lot of perishable items which make better sense considering long lines at grocery or drug stores. The concept is even more suitable at urban scenes, when people have to pick up things during work hours for more immediate needs. On the other hand with home groceries, people may benefit more with home delivery services.

Introducing Amazon Go and the world’s most advanced shopping technology | Amazon

Although I am excited to try Amazon Go for bypassing cashier lines, it may be forewarning of a direct disruption to brick-and-mortar retail. WSJ recently reported Amazon is experimenting with the technology for stores with much larger footprints (WSJ article). The application to Amazon-owned Whole Foods can be anticipated, thought Amazon denied that it was coming. There are much steeper technological challenges with store sizes in the range of 40,000 square feet, much larger inventory like 34,000 items. In addition, stronger opposition can be expected by adopting the cashier-less solution to existing stores, considering how many people are hired. Furthermore, It is going to be even more controversy if Amazon provides the solution as kits which can be integrated to different merchants. They can provide the same convenience, but with much lower cost. However, it also means consumers are even more tightly integrated within the Amazon ecosystem, potentially having even more influence than App Store ecosystem by Apple. (Later, I reviewed the Amazon Go experience: Just walk out Amazon Go — the most convincing future of retail)

References

Business Wire | Nike Opens Nike NYC House of Innovation: The Most Personal and Responsive Sport Retail Experience

IN THE ERA OF ONLINE SHOPPING, THE RETAIL STORE IS IMMERSIVE THEATER | Quartz

NIKE opens immersive flagship store in NYC with wavy glass façade | designboom

Nike’s new NYC flagship store is fueled by its mobile app | engadget

Nike’s “Noise Cancelling” Collection Celebrates Brand’s New NYC Location | HYPEBEAST

A Closer Look at Nike’s “House of Innovation 000” NYC Flagship | HYPEBEAST

Nike opens House of Innovation flagship in NYC | Fashion Network

How Rebecca Minkoff uses tech to make her fashion stores stand out | engadget

Amazon Tests Its Cashierless Technology for Bigger Stores | WSJ

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