Retail

Stadium Goods’ Secret To Nabbing A Niche Market

Sneakerheads — the colloquial term for enthusiastic sneaker collectors — are a rare and unusual breed of customer, but capturing them can be a quite a lucrative proposition. The secondhand sneaker market is worth over $1 billion a year and sneaker lovers will spend top dollar for rare pairs they are on the hunt for.

“I think the most I’ve spent is $1,500 on one pair, but, I mean, there are pairs that are worth $30,000,” Lucas Fracher, an avid collector, told CBS News.

While $30,000 shoes is an outlier, the resale value on premium athletic shoes is head-turning, to put in mildly. The hottest shoes of the last 12 months in the sneaker fanatic community have been the Nike Air Yeezy 2 “Red October,” Adidas Yeezy Boost 350 “Turtledove” and Air Jordan 1 x “Off-White Chicago,” according to Forbes. The retail price on those shoes was not inexpensive — they all retailed for $190-$240. They hit the market in very small batches and actually catching a pair at that retail price was only for the very committed, those who wait online where they are sold overnight, and the somewhat lucky. For those who are looking to purchase a pair on the resale market, the price is quite a bit steeper, ranging from $1,695-$6,118.

The options for where customers buy resold shoes are expanding. eBay and Craigslist were early digital homes for the online sneaker trade, but concerns about authenticity and security spurred a wave of digital and mobile commerce platforms dedicated exclusively to the buying and selling of shoes. StockX, Solestage and Flight Club all sprung up, as did various offerings across platforms like Facebook Marketplace.

Stadium Goods stepped into the arena in 2015 as a single New York store, and it is now a fairly large digital business with global fashion conglomerate LVMH as its financial backer. It’s a much larger outcome than its two founders, John McPheters and Jed Stiller, were ever expecting. Their goal was simple: design a minimalist, well-stocked destination for sneaker enthusiasts of al interest levels.

“There was a time when you’d walk into a sneaker boutique, and if you didn’t fit the part you might get laughed out the door, or you wouldn’t get help,” McPheters said at the WWD Digital Forum in September. “It never felt comfortable, even if you were a consumer that was supposed to be there.”

One could ponder who, exactly, are the consumers that are supposed to be in a sneaker boutique, but McPheters said that the answer was almost anyone. Customers don’t need to be a certain level of cool — or wealthy — to indulge their interest in shoes.  The key was building an eCommerce website that was so thoroughly stocked that the destination was welcoming to a variety of parties.

“There are shoppers in the market for $10,000 limited editions shoes that only other collectors have. But no one can build a sustainable or enjoyable business around only serving those customers,” McPheters pointed out. “We want to have a conversation for all kinds of shoppers. [Ones who] might be enthusiasts, [or who] might be buying a gift for a sneaker enthusiasts.”

And, McPheters noted, Stadium Goods hasn’t just thought widely in terms of the customer demographic it wants to attract — it has also focused on thinking globally. In 2016, less than a year after the firm launched, it announced a partnership with Chinese eCommerce mega-player Alibaba to sell its shoes on its Tmall platform. As of last fall it opened up its digital doors to European customers via a partnership with online retailer Zalando, which was around the same time that it launched its mobile eCommerce app.

Sneaker fanatics are willing to pay for the right pair of kicks, and Stadium Goods has done a pretty solid job of matchmaking that connection: The firm reported $100 million in gross merchandise sales in 2017.

The challenge, going forward, is maintaining the proper feeling of exclusivity and rarity, which the highest line shoppers in the wild world of sneaker collecting are looking for, while also maintaining a welcoming feel and wide-ranging stock so that more typical consumers might also want to drop in and buy.

It’s a tough tightrope to walk, though it is a challenge that Stadium Goods is ready to live up to.

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