Nike+ member shop: stocking a members-only store with customization product

What it is

Nike planned a members-only store for Nike+ members, called the Exclusive Shop. Members would reach it from a card in their profile. The offer would change about once a month, with a limit of one or two items per order.

The store needed product. The workstream summary of October 2017 states the problem: regular seasonal product was "extremely limited" until summer 2018. So from holiday 2017 through summer 2018 the store ran on customization footwear. Regular footwear, apparel and equipment would join from fall 2018.

That put the job on the customization merchandising team. Khounlavong's November 2017 summary notes that the team was working in two roles at once, customization and membership, and called it unsustainable.

What Khounlavong did

• Modeled three menus for holiday 2017 in a plan dated August 31, 2017. Each set out units and revenue by project for North America and the rest of the world. Menu one used no extra projects and came to 20,200 units and $4.5M. Menu two added select projects, for 22,350 units and $4.7M. Menu three added all of them, for 42,900 units and $5.4M.
• Wrote down the assumptions. Product gated to members would sell through at one third the rate of open product, because Nike+ was only 5% of total traffic at the time.
• Recommended which styles to make as finished pairs rather than build to order: two VaporMax packs at 1,600 pairs each, 1,000 pairs of the Vachetta Air Force 1, and 500 pairs of the Sashiko Air Force 1. The pairs had to be in Memphis in time for the launch.
• Reported status to the workstream in six decks between October 10 and November 14, 2017. The first offer moved from November 22 to November 15.
• Expanded the opening menu from four styles to six, then seven. The October 27 list came to 16 SKUs, meaning individual styles and colors, and about 53 design choices across 10,000 units.
• Programmed the spring 2018 menu for North America: 45 SKUs and 19,000 units across January, February and March, with a launch date, a price and a unit count for each.
• Tracked what carried over and what dropped each month, from November 2017 through June 2018, in a product flow chart.
• Worked with the product team to fund the shop, and with sourcing and manufacturing to set standards for finished pairs.

Results

• $5.4M in demand year to date, 22,200 units and 46% sell-through, recorded in his official Nike year-end review of June 2018.
• 7.3M product page visits.
• The Nike By You strategy update of August 2018 states that Nike launched the Exclusive Shop by using customization product and strategy.
• He named Air Max Day and NBA Hyperlocal as the key wins of the member offer.
• The member shop sold 4,100 finished pairs for $780K across five drops.

At a glance