New Concept Stores Drive Business Results for Nike and

The High Street Crisis Continues. Could Data Bring the Online In-Store?

September 2018

In early August 2018, the British institution that is House of Fraser came close to extinction. If it weren’t for a last-minute buy-out, the organisation would today be no more. It certainly wouldn’t have been the first casualty of the current high street crisis: to date, Toys R Us and Maplin are two big names that have fallen.

With more and more high street retailers slipping into trouble, today’s retailers are facing a conundrum. Given declining high street footfall, how can retailers maintain their high street presence, put an end to their falling in-store profits and begin to reverse the trend?

Concept stores might just be the solution.

Concept stores

Concept stores are unlike the traditional retail outlets we’re all used to. Instead of being entirely analogue, they fuse the physical with digital to enhance the customer experience, increase footfall and, in turn, revenue and profit.

For a long time now, customers have begun their purchase journeys online, before heading in-store to check features, reassure themselves and finalise their purchases. Concept stores condense the journey.

At a basic level, concept stores also allow online sales data to dictate inventory. Concept stores are filled with the most attractive products – which attract more customers and increase average order values. But many go a step beyond that.

Instead of stocking based on the most popular products at a national level, they stock the most popular products in extremely tight-knit geographies. In doing so, they range their stores according to what the locals are buying. Nike, for example, is using the purchase habits of people in the Melrose Avenue area to optimise in-store inventories of a new Melrose Avenue branch – to the point where it’s named its concept store ‘Nike by Melrose’.

To Nike, the store isn’t so much built by Nike. Instead, it’s built by the people of Melrose Avenue.

Bringing the online in-store

The Nike by Melrose store goes further still.

As soon as Nike’s customers step into the geofenced area the store serves, they receive mobile notifications with special offers. Purchase histories identify products likely to be of interest to specific customers – and the products are automatically reserved for customers in store.

The reservations are automatic, and allow customers to drop in and browse through personalised clothing recommendations in their size, reserved under their names, whenever they choose. It’s the physical incarnation of a strategy that, when employed online, converts at 40 times the rate of any other mechanism Nike employs. arrives on the high street

Closer to home, online furniture retailer is also defying the high street trend. At a time when the majority of retailers are closing stores, are extending their brick and mortar presence through a new series of concept stores in London and across Europe.

Naturally, online data influences in-store inventory. Visitors – of which there are more than 10,000 a month – record products of interest via in-store iPads when browsing. By rapidly learning what in-store visitors are interested in, can further refine its inventories. Data and near-time analytics ensure unpopular products never take up costly floor space for long.

Brilliantly, also records individual visitor wish lists for future reference. Once visitors have finished browsing, they’re able to email themselves their wish lists with a few taps of an iPad. It’s a strategy that sees average order value from in-store visitors of around £530. That’s double the £265 average order value of online.

Concept stores are just getting started

While the advances of Nike, and others seem revolutionary, the truth is, with what’s now possible with data, today’s concepts stores are just getting started.

When embraced, data can bring customers back to the high street and bring online conversion rate strategies in-store, transforming the fortunes of sparring high street retailers.

For a long time, high street retailers have been facing an uphill struggle. Their data, it seems, could now save the day.