Case 2: Nike opens new flagship store in NYC with customized sneakers, digital shopping

Nike has opened a new cutting-edge, 68,000 square foot flagship store in New York City that
executives hope will change the way consumers shop for their favorite sneakers and apparel.
The “House of Innovation 000” is an immersive shopping experience that combines traditional
shopping with the company’s digital app to create a futuristic shopping experience. “We always ask
ourselves how a store can be as personal, responsive, easy and fast as a mobile shopping
experience…” said Heidi O’Neill, president of Nike Direct.
The answer lies in what Nike prides itself most in: innovation.
The store is basically like one of toymaker Lego’s popular Legoland stores, where customers go to
play as (or more) often than they do to purchase, but for people who love sports. Beyond being a
shiny new gem in Nike's crown, it signals how the company is thinking about it's future, and the ways
that brik and mortar retail is changing in the age of e-commerce.
The store contains: a mini basketball court; a treadmill in front of screens simulating different
outdoor runs; a small, enclosed soccer area; a customization shoe bar where shoppers can
personalize a pair of Nike Air Force 1s; and dedicated coaches on staff who can put customers
through drills to test out sneakers.
Using Nike’s app, shoppers can scan QR codes on mannequins and apparel to see if their size is
available and view available colors then send the items to a fitting room or pick up spot. That frees
customers from having to carry clothing while shopping.
There are no cash registers in the new store. Consumers will be able to check out nearly anywhere in
the store as part of the new instant checkout feature. Scan, pay and you’re done.
Cameras are set up all around the basketball court to capture the action from different angles. A
camera beside the treadmill records a customer’s gait during a run, allowing a Nike staff member to
analyze the results and recommend the best sneaker. And that customer can later access the footage
through his online Nike account and share it on social media.
Between those stores and Nike.com, the direct-to-consumer business is playing an ever-greater role
in Nike’s sales mix. In 2015, direct sales accounted for $6.6 billion, or about 22% of Nike’s sales. But
at its investor day last year, Nike said it plans to grow direct sales to $16 billion by 2020, which
would be a full third of the $50 billion it’s aiming for in that year. For sneaker heads, this store is also
like a Nike museum or showroom. It includes the largest concentration of Nike footwear from
around the globe on the fifth floor. “This store is more than a store for us. It’s a connection and
immersion into the brand and a way to serve members,” said O’Neill.

1. What is the emotional states dimensions Nike used in their consumer's shopping
experience and how the store image will affect consumer decision making from your
point of view?

(Write the two variables of emotional states and illustrate from the case) (3 marks)
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2. State TWO buying perceived risk and how Nike innovative store decreased that risk?
(2 marks)

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3. If the international federation of volleyball is going to buy Nike shoes for their team,
how the decision taking would differ from individual consumers decision. (2 marks)

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Thank you