Foot Locker has opened a first-of-its-kind “Nike Community Power Store” in Manhattan’s Washington Heights neighborhood that seeks to connect with consumers through technology and its localized approach to operations.
The retailer, which operates 3,200 stores specializing in athletic footwear and apparel in 27 countries around the world, collaborated with global sneaker manufacturer Nike to develop the 9,000-square-foot, experiential location.
Although the New York store is not the first Community Power Store for Foot Locker, it is the first Foot Locker outlet to leverage the Nike App at Retail technology, designed to enhance the customer experience and forge a connection with consumers through the NikePlus loyalty program. Shoppers can use their NikePlus membership to access special features within the store to win prizes and get access to special offers, scan items to learn more about them and view real-time inventory availability.
“It takes the best of Foot Locker and the best of Nike and merges them together,” Frank Bracken, vice president and general manager at Foot Locker, said in an interview with CO—.
The move comes as traditional retailers face increasing pressure from e-commerce specialists and also from brands — such as Nike — that sell directly to consumers.
The Nike-Foot Locker partnership around the Community Power Store, with its extensive digital connectivity and its customer-centric focus, reflects the evolving dynamics of today’s shoppers, Christopher Svezia, a New York-based analyst at Wedbush Securities, told CO—.
“The fact that Nike would work with their number one wholesale account in the U.S. to do something like this says a lot about what Foot Locker is doing, and I think it says a lot about the relationship,” he said. “It’s a good step in the right direction, and I think there’s probably more to come.”
Connection to community
The connection of Nike technology to the Foot Locker store complements an array of initiatives aimed at anchoring its place in the community. Located in an area with a large population of people of Dominican descent, the store includes graphics that seek to celebrate this cultural heritage, including artwork created by local artist designer Danny Peguero. It also features a product assortment tailored to the tastes of local shoppers, and two brands of sneakers — Lyfestyle NYC and Triangula Swag — developed by local designers.
“Washington Heights is a really rich and storied neighborhood with a lot of history,” said Bracken.
Most of the employees are residents of the neighborhood, and all speak Spanish, he added.
The store launched with several activities and events for shoppers, and got off to a strong start, according to Bracken. Although he declined to share specifics, Bracken said results exceeded the benchmarks Foot Locker had set with Nike for various metrics, such as Nike app downloads and engagement.
“We’re really pleased with how the consumer response has been,” he said. “Sell-through of products that have been related to those events has been very, very strong.”
I think that both of our brands have been very careful about how we've used technology — to deploy it to solve consumer problems or to unlock consumer opportunities.
Frank Bracken, vice president and general manager, Foot Locker
Convenient tech
Foot Locker and Nike have made efforts to provide technology that benefits the shopping experience for their consumers. Read on for more info on tech trends.
The joint goals of Nike and Foot Locker in the project include learning more about the customers to help personalize their experience. For example, Foot Locker can invite customers through the Nike app to events or special promotions when customers are in the area. The company also hopes to leverage user data to help tailor the merchandise assortment in the store and to drive more personalized marketing messages, Bracken said.
“I think we both saw that retail was changing, and the consumer journey was changing, and we wanted to [work together] to offer more value and provide more convenience and a more seamless journey for the consumer,” he said.
The collaboration, which Bracken described as “much deeper” than previous partnerships the two companies have had, required months of preparation, including coordinating the technology connectivity between Nike’s app and the store’s systems.
Consumer-focused technology
One of the keys to the success of the effort, Bracken said, is that the partners took steps to ensure that the technology offered real benefits for customers, and was not simply “technology for technology’s sake.”
“I think that both of our brands have been very careful about how we've used technology — to deploy it to solve consumer problems or to unlock consumer opportunities,” he said.
The concept of real-time inventory visibility is one of the key elements of the partnership. NikePlus members can view the availability of items in the Washington Heights store, and can reserve them for pickup at the location.
Svezia of Wedbush Securities said such functionality is on the leading edge of consumer-focused technological innovation.
“I think you are going to see a lot more of that as we roll forward,” he said. “Providing instantaneous insight as to what products are available — how, where and when [consumers] can get them — is a step in the right direction.”
Other companies can be expected to follow suit, he added, noting that Nike and Foot Locker are further along in this process than others.
The two companies are also exploring opportunities to expand their partnership with similar stores in additional markets in 2020. Foot Locker already operates a handful of Community Power Stores around the world, and is expected to add dozens more in the coming years.
“Why wouldn’t Nike want to partner with those stores as well?” Svezia said.
In addition, Foot Locker is preparing to launch its own mobile app next spring, and is applying learnings from the Nike partnership to the app’s development, Bracken said. Plans call for Nike to have ongoing connectivity through the Foot Locker app as well, he added.
“We'll be able to merge the programs so that consumers can be members of both programs and derive benefits from engaging in both apps,” Bracken said.
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.