Millennials have proven to be a very different kind of luxury consumer with a very unique set of preferences. Sneakers is one of them
By: Abhay Gupta, Luxury Expert, Author, Speaker, Professor of Luxury Management
Posted on: June 10, 2019
Music, food and sports transcend boundaries. The same can now be said of sneakers. What started as a subculture on the streets of New York, Chicago and Detroit in a very small subset of people who loved their ‘kicks’, sneakers have now come full bloom and are a mainstay. A culture that started in America in the 1970s and 80s, people have since fallen in love with their sneakers, with ‘Sneakerheads’ (hardcore loyalists and enthusiasts enough to wait in lines for long hours and nights to get their hands on the latest kicks) proliferating everywhere.
Hip Hop had a major role to play in its advent and the most prominent figure known to impact this culture was NBA Star Michael Jordan. Air Jordan Collection is, till date, some of the most expensive and most collected sneakers in the world, with a few being auctioned for more than $20,000 a pair - if you could get your hands on those, that is.
Possibly the most renowned brands and rivals in the game, Nike and Adidas have always shelled out big bucks to get fans to pick up their sneakers. Michael Jordan, RUN DMC, Kobe Bryant, Lebron James, Jay-Z, 50-Cent, Kanye West, Eminem, and now in 2019, Beyonce Knowles have over time launched their own series, in collaboration with Nike or Adidas, bringing that much more fanfare to the love of sneakers.
Several sneaker styles and popular brands have emerged as collectors’ items in the sneakerhead subculture. The most popular series undoubtedly are Air Jordans, Nike Foamposites, Adidas Yeezy, and Nike Air Max amongst others. To the ardent followers of the sneaker culture, there even exists a sneakerhead slang with words such as:
• Coke Whites: Pristine condition white sneakers
• Deadstock: Sneakers that have never been worn
• Heat: Rare sneakers that draw attention
• J’s: Another name for Jordan series
• GOAT: Greatest of all time
• Lows: Low top sneakers which sit below the ankle
• Yeezy: Sneaker series designed by Kanye West
While these are just a few words listed here, the fact that a whole different language exists for sneakers proves that there is a mass appeal.
Even though it's a relatively newer trend, sneakers have their own museum. SneakerMuseum in Boston, Massachusetts is the world’s first museum for sneakers documenting the history, evolution, the stories, creativity and the art that goes behind designing these fan favorites. The museum regularly holds various exhibitions featuring sneakers from a range of significant private collectors, museums, and archives, including Adidas AG, Converse Archives, Kosow Sneaker Museum, Nike Archives, Northampton Museums and Art Gallery, and Reebok Archives.
To maximize the potential of the fan craze, sneaker brands are spending millions to design new shoes that fans would love to own. Nike has recently announced the launch of NIKE HYPERADAPT, the world’s first self-lacing shoes that adapt as per the wearer’s foot shape giving the ultimate customization experience to the wearer. As per recent reports, in the US alone, while the athletic footwear industry is pegged at $17.5 billion, the sneaker resale industry is estimated to be worth at least $1 billion. With this in mind, in Feb 2018, Stadium Goods, a high-value sneaker reseller received an undisclosed amount of investment from LVMH Luxury Ventures, and the company was later acquired by Farfetch for $250 Million in December last year.
Around the same time, another reseller, Fight Club, announced their merger with the behemoth GOAT. Recently, the Wall Street Journal reported that StockX as an e-commerce company is also acting as the Stock Exchange for the sneaker, handbags, and watches reselling industry. With so much at stake, the industry is definitely getting noticed and has prompted other brands to follow suit. Gucci, C.QP, Ermenegildo Zegna, Axel Arigato, Saint Laurent, Christian Louboutin, Brunello Cucinelli, Alexander McQueen and other luxury brands have jumped in as well. However, Balenciaga, a Spanish brand, has made the biggest mark in the industry with products flying off of the shelves online and offline.
The Market Demands
It is a common misconception that the sneaker fetish is driven by affluent teenagers. In fact, the biggest demographic is the young and successful professional executives who have associated a strong emotional connect and actually identify as ‘Sneakerheads’ themselves. There now exists a serious number of people who collect the most prized sneakers and with prices ranging anywhere between $2500 to $100,000, the rarer the sneaker, higher the price. In India, various sneaker stores are popping up who sell the ‘sneaker experience’. Vegnonveg was India’s first sneaker experience store offering high-end collectible sneakers in India. Other e-commerce entrants such as Superkicks and Vegnonveg’s online site even allow customers to order high-end sneakers for home delivery.
Overall, the marketing strategy for sneaker resellers has primarily relied on the experience of purchasing a collectible. High-end retail stores rely on giving a full-service experience that includes digital displays, relaxed store design, ancillary services such as coffee shops and play zones, and an omnichannel content strategy approach that uniquely engages customers and fans at the physical stores, e-commerce sites, mobile applications, and even on social media. The key piece to success has always been an appreciation of the lifestyle and the underground culture that goes with sneakers. Collaborations with music and sports celebrities and opportunities for fans to interact with them on social, digital and physical stores play a very important aspect.
The sneakers trend is only beginning to expand outside the US and especially into newer areas such as India. Brands that adapt to the trend and culture fast will do well in the long run. With major brands introducing different tech into the sneakers, we will definitely see many more collectibles hitting international stores. Beyonce Knowles’ latest collaboration with Adidas to launch her own pair of sneakers and other merchandise, which will be launched internationally, is just the beginning of the sneaker fetish worldwide.
Abhay Gupta is the founder, promoter and CEO of Luxury Connect (a boutique consulting organization) and Luxury Connect Business School (LCBS). He has helped establish luxury brands like Versace, Versace Home, Versace Collection, Corneliani, Arredo Classic, etc in India. Luxury publication Blackbook recognizes him as one of the ‘Top 100 Indian Luxury’s Most Influential’ for the past 6 years. He is also a recipient of the ‘Luxury Retail Icon 2012’ title by Asia Retail Congress. Having being featured in Forbes Luxury Trend Report 2012 as one of the industry leaders, he has also been widely recognized as a luxury expert by many media organizations. Fondazione Altagama has also recognized his contribution to the growth of Italian luxury industry by his pioneering efforts in India.