In the news this week, we read that data-driven hyper-local store concepts are now being touted as the new saviour of bricks-and-mortar retail – but what do we mean by hyper-local? And does it really work?
Retail trailblazers Nike have been successfully trialling the hyper-local concept in the US and are looking to open more hyper-local concept stores – where the shop is tailored to meet the needs of a very specific local community. Describing their first data-driven store as an “experimental digital-meets-physical pilot,” Nike’s gamble seems to be paying off with shoppers flocking to the highly-personalised retail concept.
Situated in the prestigious Melrose Avenue in Los Angeles the 4,57 sq ft store has been inspired by and designed for users of the Nike Plus app. Using data from the app, Nike discovered that Melrose shoppers love to shop new trends and are particularly interested in running gear – so the store is designed with this in mind and stocked with lots of trendy new fashion items and rails full of of running gear.
The buying patterns and customer engagement data gleaned from the app has also been used to provide insights into how the store should be styled as well as stocked, so that Nike can serve the shoppers with the things they want the most, in an environment they enjoy regardless of nationwide or seasonal trends.
Blazing a trail
Talking about the experimental store, retail expert Siu Lan Choi suggests that Nike are blazing a trail for others to follow:
“Nike are pioneers on many fronts, which is why we’re seeing them make this move first, but I do think we will see lots more of this approach. What’s particularly interesting is that the brand has been able to open up a global community through the NikePlus app, and is now taking that specific information and data back to create something super-local.”
Paul West, a retail strategy director agrees that Nike are on the button with their data-driven approach:
“Customers are demanding a more relevant, personalised service because they are used to being able to get anything, at any time. It is also safe to say that in some markets big global brands are approached with cynicism, so a more localised approach can be a good strategy. From a customer perspective, shoppers today are bombarded with so much choice that a more edited offer, combined with good service, is appealing.”
“We are definitely seeing more localised formats and I expect that to continue, but retailers are also trying to create a ‘family’ of different spaces within their portfolios to get closer to customers – it could be localised but it could also be a service-led format or focusing on convenience.”
It certainly looks like Nike are onto something with their new hyper-local approach. The store has proved very popular with locals and they are already planning a second similar store in Tokyo, before potentially rolling it out in cities across the globe.
Could Nike’s tailored, local customer-focused approach really help solve some of the challenges facing the high street? Let us know what you think in the comments section below.