Case A11: Niketown

Some things don't need much explanation. When you see the Golden Arches, you think of McDonald's. When you see a swirling a swirling red, white, and blue sphere, you think of Pepsi. And when you see the curvy little swoosh, "Just do it" comes to mind.

With so many nontraditional shopping alternatives competing for the customer's attention, a key to survival in the 90s is retailers' ability to maximize their in-store environments. Customers are bored with ordinary shopping experiences. Convenience and price aren't enough. They want to be entertained.

With this in mind, Niketown was developed to create brand awareness about Nike as a company in an informative and fun way. It was established to promote a lifestyle as much as the product. "We wanted to engage the customer in both our products and the sport and fitness lifestyle that Nike represents," said Mary Burns, director of operations at Nike in Beavertown, Oregon.

There are six Niketown stores in operation: in Portland, Oregon; Chicago; Atlanta; New York City; Costa Mesa, California; and San Francisco's Union Square. The stores are tourist attractions and it's easy to see why. If you were to visit the Portland store (the original Niketown), this is what you would see: Flying superhumanly above the square is a life-sized statue of Michael Jordan.Nearby are other statues: Bo Jackson lifting weights and Andre Agassi running to smash a tennis ball. Niketown's background design is Disney like characters and the city of the future, featuring the cartoon show "The Jetsons." Fourteen small, themed salesrooms, which Nike calls pavilions, feature an array of sports shoes and apparel for everything from tennis to hockey.

The majority of the pavilions feature the sounds associated with that sport. If you enter one basketball pavilion (The Flight Pavilion), you'll hear the distant sound of basketballs bouncing on hardwood floors.If you enter the tennis pavilion, you'll hear the sounds of the racket smashing against the little yellow ball.

In the Land of Barkley, named after basketball player Charles Barkley, basketball hoops hold up display shelves, and basketballs support benches. The sounds being played are shoes squeaking on hardwood. The actual floor is hardwood so "wannabe" Barkleys can pull on a pair of shoes and squeak them on the floors like the big guys. The tennis pavilion features a sunken, miniature tennis court; its most popular piece is John McEnroe's broken racket. There's even a kid's pavilion, with bootie-sized air Jordan lookalikes and a measure on a wall that shows the height of Jordan's leap. At 40 inches, it's higher than some of his small fans' heads.

Even with all of this, one of the biggest attractions is the swim and volleyball area. The seats are surfboards. There's an aquarium with tropical fish and the floor features a center section designed to simulate a glass-bottomed boat, with videos of the sea life playing.

Nike cares that customers carry away fond memories of the brand rather than only a new pair of sneakers."Niketowns provide Nike the opportunity to present the full scope of Nike's sports and fitness lines to our customers and to educate them on the value, quality, and benefits of Nike products," said Bruce Fabel, vide president of Nike's Retail Division."Our research indicates customers who do not make a purchase at Nike Town will be more likely to buy Nike in the future from one of our retail accounts in the area."

Nike is not the only company pushing its own stores. A growing number of big-name manufacturers are turning into mainstream merchants, opening flashy stores called flagship stores all over the nation. Swimsuit maker Speedo, children's clothing company Oshkosh B'Gosh, and shoemaker Nine West are just a few that are opening stores similar to Niketown, showcasing their brands and enhancing their image.

Discussion Questions

1. Why are manufacturers like Nike opening their own retail outlets?

2. How will consumers and retailers that sell Nike merchandise react to these new stores?