How Nike's New Concept Store Could Ultimately Change Retail

By Markets Fool.com


Nike's massive new store in New York. Image source: Nike

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Nike(NYSE: NKE) officially opened its newest innovation in retail this weekend -- a 55,000-square-footstore in downtown New York that features spaces for playing sports and some impressive technological features.Here's how Nike's new concept store is shaping the future of retail, and what it could mean for Nike in the long term.

First look at Nike Soho

This five-story store in the middle of New York City's Soho neighborhood is Nike's newest physical footprint, and one that could show us the future of retail. "Designed to deliver the best of Nike's personalized services, from exclusive trial spaces to product customization, the store creates a seamless link between Nike's digital and physical platforms," as the company puts it.

Inside the store, customers can try out new products in actual sports settings, as well as use tech-enhanced features such as treadmills with specialized sensors to test out specific running shoes. Other features include fitness lounge-like fitting rooms, an instant personalization studiothat lets consumers laser engrave on products, and other features that set the shopping experience far apart from what consumers could get online.


Nike Soho customization studio. Image source: Nike

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Nike has even added some awe-inspiring sporting complexes right inside the store, including an entire half-court basketball "trail zone" that includes an adjustable hoop and digital video screens. The court features plenty of its own tech features, such assensors that provide real-time, on-screen feedbackfor participants during guided training by a basketball store athlete to show the benefits of featured products.There are similar features for running and soccer in the store. Nike plans to open another store similar to Nike Soho in Miami in mid-December and roll out some of the new features in existing stores.


Image source: Nike.

The future of Nike retail

The story that retail is dead in an age of e-commerce growth has been beaten into investors' heads in the past few years, and there's no doubt that the landscape has certainly shifted where consumers are happy to order much of their gear online. However, while Nike is laser-focused on building out its own e-commerce growth through Nike.com, this store shows the middle ground of when brick-and-mortar presence can actually build out physical and digital sales.

The store itself is meant to be an experience that consumers can't get online, such as testing out new products in real sport play before buying it. However, it also helps to further Nike's digital strategy. The Nike+ app is integrated with the features so that users can save their favorite styles to buy later after playing in the store and can also save training results for their next visit to this and other stores. There are also large touchscreens on walls of the store to continue searching for styles or colors, and if they aren't available in store, then they can be purchased and shipped home.

This store could even show some aspects of Nike's localized manufacturing goals. CEO Mark Parker talked about a manufacturing revolution in the most recent earnings call in what seems like 3D printing and similar technology that can help get personalized and higher-quality product to the consumer much faster. In the future, this could even be at the store level where a consumer could get part or all of their product made to order in person, eliminating much of the issues around manufacturing, shipping, and inventory storage.

This futuristic scenario still appears to be a way off, but it's encouraging to see the investments that Nike is making to reach what could be a much more profitable future of manufacturing and retail.Nike certainly isn't the only one working toward this future -- Under Armour (NYSE: UA)(NYSE: UA) revealed a new manufacturing innovation center in Baltimore in June that features tech like 3D printers and robotics, and Under Armour also announced a massive flagship store in New York that will open in 2019.

While the companies most focused on e-commerce are clearly some of the strongest players in the market right now, it's important to keep an open mind as to what new strategies could shape the future of these companies' sales growth. Nike's new store certainly gives reason to think that brick-and-mortar retail done right could still be hugely rewarding.

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Seth McNew owns shares of Nike, Under Armour (A Shares), and Under Armour (C Shares). The Motley Fool owns shares of and recommends Nike, Under Armour (A Shares), and Under Armour (C Shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.