The new NYC Nike store will have a members-only floor

Discussion
Rendering: Nike
Dec 11, 2017
Matthew Stern

It was a little over a year ago that Nike opened its experiential flagship store in Soho. Now the shoe brand is planning to replace it with an even bigger concept — one that’s even more experiential and, in some ways, more exclusive.

The planned Nike flagship store is slated to open in early 2019, according to a press release. The fifth floor will be accessible only to NikePlus members and will be home to exclusive products and experiences. Nike will also offer customers one-on-one assessments by Nike Experts on the floor to give personal shopping advice and tips on reaching athletic goals. The store, to be located on Fifth Avenue at West 52nd Street in Manhattan, will also feature Hyperlive on the first floor, a new small-format store concept from Nike.

An internationally popular brand like Nike having a members-only floor at its flagship could make the store a bigger destination for an already dedicated fanbase. And while having a floor that’s off-limits to all but NikePlus members could leave regular shoppers feeling left out, membership is free. So, it could inspire regular store visitors to sign up on mobile in-store to access the fifth floor perks.

The announcement of Nike’s latest experiential move comes against the backdrop of the shoe company taking steps to have more control of its own brand presence. In October, Nike announced that it was ending its relationship with “undifferentiated” channels of distribution and focusing on selling through 40 specific retailers as well as direct-to-consumer.

Nike is not the only retailer that has begun experimenting with members-only retail.

In 2016, aspirational fashion brand and one-time pure-play e-tailer Revolve opened a store called The Social Club, according to Fierce Retail. The Social Club is more overt in its exclusivity as it is open only to top-spending members.

As for Nike’s new non-Soho location, it is not clear whether the relocation is at all related to the community concerns about foot traffic congestion that politicians advanced when the current Nike flagship was first announced in Soho. 

DISCUSSION QUESTIONS: Does having an entire floor dedicated to loyalty club members make sense for Nike? Could this kind of exclusivity work for other retailers, or would it be off-putting to non-members?

Braintrust
"Nike is tapping into the next big thing here."
"Creating loyalty is good, as long as it’s done without diminishing the service to non-club members."
"If I were selling Mercedes-Benz sneakers, I might want to have an exclusive, members-only floor. But this is Nike..."

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23 Comments on "The new NYC Nike store will have a members-only floor"


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Mark Ryski
BrainTrust

It’s an interesting move for Nike as a brand, but I don’t think it will have much impact on Nike as a business. Creating exclusive experiences for loyal customers makes good sense on lots of fronts, but the real trick is to turn this loyalty into a business win and that can best be accomplished when it’s easy for customers to participate. Given the ubiquitous products Nike offers, I think this kind of exclusivity could indeed be off-putting for some Nike customers.

Nir Manor
BrainTrust

This is a smart move that will enable Nike to give more personalized service to its members and encourage non-members to enroll. This will enhance engagement with the brand and it supports their omnichannel strategy. I believe we will see more and more of this direction from other retailers.

Bob Phibbs
BrainTrust

These are marketing ploys not unlike Amazon drones. Yes, it gets press but are many people really going to choose Nike over Zappos because of an expensive Manhattan members-only floor? I doubt enough will to warrant the investment. I’ve been in their stores and that experience is far from cutting-edge.

Paula Rosenblum
BrainTrust

I have to give Nike an A for effort in trying to reinvent the store experience, but they get pretty low scores on decision-making. I don’t really like their new concept store. The one on Miami Beach was high on wasted space and low on actual shoes (no walking shoes in the store? Seriously?).

And now a members-only floor? Why would they? Aren’t they also selling on Amazon?

Makes no sense to me at all.

Brandon Rael
BrainTrust

For the die-hard, lifelong loyal “Just Do It” Nike aficionados, this is an interesting in-store exclusive add-on, which will drive the personalized experiences they are seeking. As we all know membership has its privileges. However, the critical aspect of this exclusive offering is how to translate this into incremental business, not only with their loyal consumers but also with new customers.

Considering that Nike’s main competitors, Adidas and Under Armour, are making significant headway with their relentless innovation and personalization services, Nike has to keep up this charge as well. Nike products are omnipresent, and this may evolve into an upper-end exclusive offering that may just resonate very well with their most loyal consumers.

Now if the company could blend the art and science when it comes to in-store exclusive merchandising, they may have a winner on their hands!

Neil Saunders
BrainTrust

Club membership has to come with some advantages, and this seems like a good one. The fact that anyone can sign up means that this is not so exclusive as to alienate people.

That the floor goes beyond products to offer services and experiences will make it particularly attractive.

Max Goldberg
BrainTrust

Nike seeks to reward its best customers. Why not? This loyalty club is another step by Nike to take control of its brand and differentiate its brand from the competition. It’s aspirational for non-club members and will bring consumers closer to the brand.

Kim Garretson
BrainTrust
4 months 11 days ago

I see another great benefit here: Special appearances by Nike-endorsed athletes and Phil Knight. With the members-only floor, Nike can do better crowd control for these appearances, by making sure only the most passionate fans of these athletes and their sports can have better access to the personalities.

Lyle Bunn (Ph.D. Hon)
BrainTrust

During the huge annual Toronto Film Festival (TIF), to which the big stars of entertainment, sport and business flock during several weeks in late September, upmarket brands and retailers increase their profile and notoriety by hosting the stars. Holt Refrew uses the event to draw the new market of the wealthy young toward the brand, and it is a strategy that is paying off. The aspiring engage with brands and brands are well-served by making sure they are in the constellation of bright stars. Laurels to Nike for bringing distinction to their brand.

Bob Amster
BrainTrust

An entire floor in an expensive real estate space? Overkill. There are more efficient ways to pamper your loyal members.

Stuart Jackson
BrainTrust

Nike is tapping into the next big thing here; setting a trend that others on the High Street will surely follow. It makes a lot of sense. Not only do you create a marketing buzz and give yourself the opportunity to create a rolling calendar of unforgettable in-store experiences and offers but you also increase personalization and potentially raise footfall to your store. Today, more than 60 percent of retail customers want personalized offers and more than ever before they’re demanding not just great service and products but in-store experiences too.

The other element at play here is that Millennials in particular want to share photos of their experiences on social media and exclusivity is becoming a big draw across all the generations. When you add all these factors together you can see the potential for this kind of innovation and I expect to see many more brands following suit over the coming year.

Steve Montgomery
BrainTrust

I can understand Nike’s desire to have an exclusive offer for some of its customers. The list of companies that have done this range from credit card companies to airlines. The interesting twist is that almost of these have been based on the customer paying for the right to enter the group based on buying in upfront, spending levels, etc. This provides a sense of exclusivity (real or imagined). NikePlus membership is free. Giving membership away for free may help Nike avoid offending some customers but removes the perceived value of its NikePlus membership.

Lesley Everett
BrainTrust

Creating loyalty is good, as long as it’s done without diminishing the service to non-club members. If done well it will get talked about and attract more members as they start to see the benefits. Nothing wrong with looking after your loyal customers extra-specially well and creating an experience that is valued.

Seth Nagle
BrainTrust

Having a dedicated floor makes sense but this approach seems to cause more hassle than excitement for the shopper. By having free signups you take away the exclusivity of the room/experience.

We see this exclusive format daily from sporting events to flying. For a retailer, I think they need to look at it as a different approach however and use it as a marketing investment. They should limit the users but use a selection method that promotes shoppers with social followers that can/want to distribute their one-of-kind shopping experience to their followers to build excitement across a variety of social media channels.

Cate Trotter
BrainTrust

I think this is an interesting approach to loyalty and tapping into human curiosity. If you’re in a store where part of it is sectioned off don’t you want to know what is behind the curtain (or on that floor in this case)? Making access free is a great move as more shoppers are likely to sign up on that basis, which gives Nike a chance to work on a long-term relationship. For NikePlus members it’s another way to prove the value of that membership. It’s unlikely you’d want members-only sections in every store, but for a brand flagship it’s a neat idea.

Gene Detroyer
BrainTrust

If I were selling Mercedes-Benz sneakers, I might want to have an exclusive, members-only floor. But this is Nike — as close to a mass brand as one gets. Why would you want to separate the customers into haves and have nots? Are you not dissing 99.9 percent of your customers with such a move?

Joy Chen
BrainTrust

Nike is hitting on upgrading their service and experience to differentiate their brand from the competition. All consumers want to be treated better and loyal consumers would want to be the first to know what’s new. This provides a platform to service them.
This type of play by Nike will only work for brands that are well known and highly regarded. This is because consumers only want to be associated as a member with quality brands.

Katherine Black
Guest
4 months 11 days ago

I think that this is a great way to elevate the exclusivity of the brand and reward loyal customers. There is a lot that can be done with this idea — athlete appearances, special access to shoes, a shoe library, etc. — for true “super fans.” I would encourage them to measure this over the long-term to gauge success and figure out how to scale loyalty rewards to their next tier that may need something a little less exclusive and easier to access.

Peter Luff
BrainTrust

Not sure how it is that exclusive if you can join for free using an app or in-store. It sounds to me like an innovative if expensive way to get their hands on personal data to then target in future marketing activities. I think it will have limited impact either in benefit or harm to the brand as they already have so much reach. I would not be surprised to see this dropped in 18 months’ time as the results will be unclear!

Robert DiPietro
BrainTrust

I think this is more of a PR move than one that will move the numbers for Nike. It does open up some interesting dynamics to really drive the “obsessed” members who are into all things Nike. They may become the brand’s best advocates as the college runners did in the early days at Nike.

I could see a subscription model coming for members — early access or maybe an automatic shipment in your custom size of Air Jordans for each release or whatever sneaker you choose.

Todd Trombley
Guest

The perception of being part of something exclusive is mightily compelling to people. It appeals to consumers’ drive for status. It seems as though consumers desire for the cachet of exclusivity is virtually limitless — I’m sitting in the V.I.P. section of my local Starbucks as I type this; $10 buck cover to get in, table service is great and the lattes are triple priced, but the envious looks I get from those outside the ropes makes it money well spent! Making it relatively easy to be part of this exclusive: in reality non-exclusive, floor means it will be popular and will broadly reinforce Nike’s brand.

If you have a big enough audience to mine for this type of compelling faux exclusivity, then go for it. Those that are off-put will be influenced by, and ultimately follow, those in the exclusive circle. Maybe we should add exclusivity to envy and the other seven deadly sins that have been motivating people for centuries!

Lee Kent
BrainTrust

I see a lot of potential if done right. And that’s my 2 cents.

Jeff Hall
BrainTrust

As one of the early innovators in the space, Nike has done well over a long period of time in creating flagship experiential retail. This move signals yet another way in which the brand is adept at creating positive public relations and media coverage. Establishing a members-only space within the new flagship location will drive curiosity among Nike fans, in turn lifting membership in the loyalty club program, creating downstream opportunity for more meaningful customer engagement, and more importantly, burnishing customer goodwill.

wpDiscuz
Braintrust
"Nike is tapping into the next big thing here."
"Creating loyalty is good, as long as it’s done without diminishing the service to non-club members."
"If I were selling Mercedes-Benz sneakers, I might want to have an exclusive, members-only floor. But this is Nike..."

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