New technology is increasingly being infused into
stores, and the results are finally starting to show.
Tech-forward companies like Amazon
and Nike are
completely changing the idea of what it means to have a
Live concept store, which chooses items to stock by
analyzing customer data, and Amazon’s Go concept, which uses
just-walk-out technology instead of cashiers, are two examples
of how the way the industry is thinking about stores is
Retail is changing faster than ever.
Though there has been a lot of talk about how online shopping is
changing the retail landscape, forcing traditional shopping
centers like malls to close, it’s only now that the future of the
industry is truly coming into focus.
And yes, it’s digital, just as we were promised.
Nike lives out loud
Nike is using data pulled from online purchases to inform the
products stocked in its
new store, which opened in July.
It’s the first Nike Live concept store, which seeks to maximize
speed and convenience by combining digital offerings with a
4,000-square-foot physical retail location.
Called Nike by Melrose, the store is a representation of
favorites of customers in the area – in this case, the West
Hollywood part of Los Angeles. Much of this information was
gleaned from customers using Nike’s online services, whether they
were shopping on Nike.com or were
members of Nike Plus.
For example, Los Angeles-based customers buy a lot of the Nike
Cortez, a retro-styled, low-cut sneaker. Nike knows that from
observing their shopping habits, and so it can then stock more of
the shoe in more colors and feature it prominently.
The store is stocked with products in categories like lifestyle
and running, which are two of Nike’s most popular, and it is
predominantly focused on serving customers who care about both
style and fitness. The store stocks both men’s and women’s
products but allows for variation based on each gender’s
That marriage of digital prowess and physical store
experience is the hallmark of Nike Live stores.
“This much more represents how consumers are thinking about
shopping. They don’t put the wall up between physical and
digital,” Heidi O’Neill, president of Nike’s direct-to-consumer
business, said to Business Insider
during a visit to the new store shortly after its opening.
Customers can also use the Nike retail app to scan products’
barcodes and find out more information about them, including the
sizes and colors the store has in stock.
Nike is also adding convenience-oriented features like curbside
pickup and digital reservations in lockers that customers can
open with their phones.
With Nike Live, the company will have what you want, where you
want it – and it will help you get it with as little friction as
Future Nike stores, like the flagship stores currently
slated to open this fall in both New York City and Shanghai, will
incorporate some elements of Nike Live, CEO Mark Parker said in
the company’s earnings call this week.
Amazon Go creates a ‘magical’ new experience
Amazon opened its first cashierless Go store
The store features Amazon’s “just walk out” technology, which
uses sensors and cameras to track what customers take off shelves
and out of the store. Located in Seattle, near Amazon’s campus,
it’s seen by many as the future of brick-and-mortar retail, with
complicated technology that’s designed to make in-store shopping
as seamless and easy as shopping on Amazon.com.
With no lines or checkout process, the store uses cameras and
sensors to track what you put in your basket. It then charges you
through your Amazon account.
The store opened to the public on January 22 after a lengthy beta
period. The opening of the store brought a lot of interest from
lines soon formed on opening day.
- AP/Elaine Thompson
In a letter to investors, Amazon CEO Jeff Bezos spoke with pride
about hearing customers call the experience of shopping in the
new store “magical.”
Amazon has since expanded its Go footprint to four locations,
three in Seattle and one in Chicago, with more on the way in
cities like New York and San Francisco.
The company could have an even more ambitious plan to expand
Amazon Go. It wants to have at least 10 stores open by the
end of this year, then 50 in 2019, then possibly a rapid
expansion to about 3,000 by 2021,
Bloomberg reported, citing people with knowledge of the
Brick-and-mortar stores are changing forever
Taken together, Nike Live and Amazon Go chart a new course for
retail that is unconstrained by what came before, and they offer
new opportunities to get products to customers more efficiently
The advent of tech-focused physical stores proves that
brick-and-mortar retail isn’t going anywhere soon.
“Physical retail is clearly not dead,” retail consultant
writes in a contributor post on Forbes. “Far from it, in
fact. But, to be sure, boring, undifferentiated, irrelevant, and
unremarkable stores are most definitely dead.”
In fact, what’s happening now is what Deloitte calls a
“retail renaissance,” fueled by new technology and data-centric
insights into customers’ habits and characteristics.
“A sea change is clearly taking place in the retail market
– but it is not the retail apocalypse. In our view, it is instead
a renaissance – driven by huge shifts in economics, competition,
and consumer access to options, all fueled by exponential
advancement in technology,” Deloitte
wrote in a March 2018 research report. “And in this
renaissance, the winners appear to be those retailers that can
capitalize on consumers’ experiences of their economic well-being
– or lack thereof – to offer a value proposition that aligns with