Brief:

• Nike plans to test a mobile app that will recognize shoppers when they enter stores, let them scan for product availability in their area and check out and pay without waiting in line. CEO Mark Parker announced the plans last week in an earnings call that said the company's sales grew 7% to $9 billion in fiscal Q3 2018 from a earlier.
• The mobile app also will let shoppers reserve products that can be retrieved from a store locker to try on before buying. The first two stores to test the concept in the next quarter will be in Portland, OR, and at The Grove mall in Los Angeles before the concept scales to more locations with potentially additional capabilities to enhance shoppers' in-store experience.
• Nike also acquired data analytics company Zodiac in a move to better understand customer lifetime value. The acquisition is part of the company's broader Consumer Direct Offense strategy to develop products faster with stronger shopper personalization, per ZDNet.

Insight:

Nike's plans to test out broader in-store mobile functionality with the App at Retail shows how the maker of athletic apparel intends to adapt to the changing tastes and shopping habits of younger consumers, who often search for deals or availability on mobile phones while browsing in stores. A number of retailers are doubling down on mobile with an eye toward enhancing brick-and-mortar retail experiences. One of the most visible this year is Amazon Go, a cashier-less concept. Replicating the Amazon Go approach will be tough for a lot of retailers because of the tech investment required, but savvy retailers like Nike are looking at borrowing elements of Amazon Go for their stores. 

Nike's ramped up mobile strategy will be particularly important for markets like China, where the company's sales surged 24% last year, overcoming a 6% decline in North America. Nike's strategy to boost revenue also includes more direct-to-consumer sales, more investment in women's footwear and apparel, piloting a test with Amazon to rid the market of counterfeit goods, and the launch of a digital styling service Stitch Fix, per CNBC. Together, these efforts signal that Nike is going all in on embracing digital tech to optimize its marketing and ramp up personalized touches to ease customers' shopping experiences.

The direct-to-consumer push includes programs like SNKRS Stash that lets shoppers unlock access to exclusive Nike and Jordan products using mobile geolocations, and Shock Drop for surprise mobile alerts that let people buy sneakers instantly through its app or at a nearby Nike store. Nike also launched its Nike+ and SNKRS apps globally to interact with customers in more markets.

Last month, the athletic apparel company combined augmented reality (AR) and shopping technology for a first-ever activation on Snapchat. Its Jordan Brand recreated basketball legend Michael Jordan's famous free throw line dunk in 1988, hosted a fan event and sold out of pre-release merchandise in minutes. More recently, Nike China and ad agency Wieden + Kennedy Shanghai this month produced a video game that can be personalized while customers test run a new line of shoes on a treadmill in stores in Shanghai, Beijing, Guangzhou and Chengdu.