NIKE SOHO STORE
*WARNING: I’m about to enter the Adidas vs. Nike debate.
**SPOILER ALERT: I’m giving Nike a leg up after checking out their newish SoHo store in New York City.
// MY REASONING
Over the past year I have had several conversations about the current state of the retail industry. Over and over I have heard from people within the industry that “it’s rough” and “nobody knows what to do.” My father — who doesn’t completely understand e-commerce — especially has been telling me it’s difficult. My friend — who does understand e-commerce — says people are just not shopping middle market anymore. If you open any business section of a newspaper you will learn that big department stores are struggling, malls are becoming desolate and soon companies like Payless and Abercrombie & Fitch will become as memorable as the CD player or the fax machine. However, as of February consumer confidence is at a 15 year high. So what gives?
// IT’S RETAILERS NOT MILLENNIALS
Recently, I had a conversation with someone in the licensee and retail industry. He went on and on about millennials. He called them “lazy”. Essentially blaming them for his business issues. He is not alone. If you do a quick google search you will learn that there are many stereotypes about millennials and lazy is at the top of that list. Also on that list: they don’t work hard, they have ADD, they are not passionate about anything and so on. Note: most retail executives, including the one who told me millennials are lazy, are NOT millennials.
It’s important to also note here that an older generation bashing the younger generation is not new. All generations tend to look down on the younger generations. In part because they don’t understand them. It is much easier to call the younger generation names and roll your eyes than it is to put the effort in to understand them. Yes, you can see where I am going here. The problem, in my opinion, with the retail industry is the retail industries unwillingness to understand the consumer.
Gordon Tredgold, Founder and CEO, Leadership Principles wrote “29 Surprising Facts That Explain Why Millennials See the World Differently” for Inc. It’s worth the click. Some facts: Millennials are the most educated and racially diverse generation making it the most tolerant. They also prefer to work for, shop at, and support companies that don’t just focus on profit. Millennials prefer “to work in a collaborative, flexible environment that doesn’t require them to be in the office all the time, and one that will allow them to utilize social media.” Tredgold writes, “any company that can adapt and accommodate these needs is going to have access to large and talented pool of resources, who will be loyal and do great work.”
Hannah Becker has put together “40 Facts About Millennial Consumers“, This is also worth the click. Some facts: Millennials NOW have the majority purchasing power. Millennials are considered immune to traditional advertisements. 54% of Millennials prefer to pay for purchases using their smartphones. 78% would rather spend money on a desirable experience. 95% say that friends are the most credible source of product information. 70% feel responsibility to share feedback with companies after good or bad experiences. 58% prefer unique goods over mass-produced (up 13% in two years). When shopping, 86% want to learn about the relevant environmental issues from the brand. And 75% say it is fairly or very important that company gives back to society.
Millennials are buying consumer goods. They are also very loyal to the brands they shop at. They also prefer a work life balance, so the product they need and will buy will work for both. So, if you are a struggling retailer than maybe it’s YOU and not millennials.
// WHAT ABOUT ADIDAS VS NIKE?
I first need to praise both of these brands for being so adaptable, for understanding their targeted customers and for creating consumer experiences worthy of Millennials. Two years ago Suzanne Bearne over at campaign wrote the “Six lessons in how Nike and Adidas create hype and millennial hysteria“. She writes that the brands: 1. Fuel demand by creating limited-edition products. 2. Create hype by redesigning classic editions. 3. Play around with interesting retail formats. 4. Have a nose for nostalgia. 5. Build brand using influencers – but in an authentic way. And 6. Empower the consumer.
It’s hard not to read positive stories about Adidas these days. Most speak to how they are making gains on Nike. Sure it could have something to do with their collaborations with Kanye West and Alexander Wang or their much talked about boost technology (both targeted to millennials). However, would it surprise you if you knew the best selling sneaker last year was the nostalgic Adidas Superstar? As Suzanne Bearne notes millennials love and value nostalgia and Adidas is benefitting greatly from it.
Nike also benefits greatly from Millennial’s love for the 80s and 90s. Just look at their Air Jordan brand. Nike seized on the moment and started rereleasing the Jordan shoes in 2013 to much fanfare (I own more Jordan’s than I feel comfortable putting in writing).
The resale market helped. In my many discussions with people in the retail industry they are always so worried about third parties coming in and cutting in on their margin. They are also unwilling to think about resale market. Nike and Adidas have used that resale community to their benefit. Recently speaking about his collaboration with Adidas, Alexander Wang said “I’m really intrigued by the culture of reselling, the values of youth culture and the perception of what’s authentic and what’s fake.”
This past week I checked out the newish Nike SoHo store in New York City. I also checked out the Adidas flagship stores on 5th Ave and on Houston Street and the Adidas Originals store next to the Nike SoHo store. I like the product equally and plan to purchase items at both brands. However, I have never been so impressed with a store as I was with the Nike SoHo shop.
A couple weeks ago, my father who has been in the shoe business pretty much his entire life called me to ask me about some guy named Ronnie Fieg. If you do not know Ronnie Fieg, he is footwear and clothing designer who owns and operates Kith. Side note I told my father about Kith many years ago and told him to go check them out then. Now that he feels he no longer understands the shoe industry he is willing to go check it out. Kith is cool no matter which way you want to look at it. It is even cool is think it’s not cool. Same goes for the brand SUPREME.
Lines of millennials line up outside KITH and SUPREME stores every day. Instead of trying to compete with these brands and similar brands populated by millennials both Nike and Adidas have leaned in. Nike even has it’s own shop within KITH. KITH sells both Nike and Adidas. Nike also has a long-standing relationship with SUPREME and have collaborated many times over the yers.
I immediately noticed design elements similar to KITH (ahem white painted shoe art installation) when I walked into the five-story 55,000-square-foot Nike SoHo Store. Groups of people were congregating on the first floor to go a tour of the store and to learn about Nike’s products. Some were tourist. Not all. They were all mostly young. They were able to interact with a company spokesperson to answer their questions about the brand. I did not go on the tour.
I took the escalator up checking out floor after floor. Each floor designed like a showroom. Mannequins lined up as if they were in a Kanye West fashion show highlighting the various products throughout Nike (Including one mannequin wearing the Pro Hijab — Nike’s appeal to the more diverse, more tolerant Millennial generation). At no point was I pressured to buy anything. It felt as if it was equally accepted for me to buy in store or to use the store as away to interact with the product — I could even try it on and play some basketball — and then head home and purchase the items online ala Apple.
Speaking of Apple, Millennials love them some Apple Stores. The reason being is the seamlessness of it. The Nike SoHo store felt very Apple and I’m guessing that’s the point. There were sales reps all over the store to help should I need it and I could be rung up on a phone avoiding a long wait at a register. According to Nike the store was “designed to deliver the best of Nike’s personalized services, from exclusive trial spaces to product customization, the store creates a seamless link between Nike’s digital and physical platforms.”
The Nike SoHo store is part KITH, part Apple, part interactive digital experience. It is amazing. The store was built for me. It’s a store built for my fellow millennials. Following my visit I texted my father, my brother, a few of my good friends all of whom work in retail and told them to check out the Nike SoHo store because this is what the future of retail looks like. For this reason, and this reason alone, Nike over Adidas (for now).