When I was a freshman in high school, I waited in a line for five days just after school got out. I wasn’t waiting for the new iPhone,
I was sitting outside to buy a single pair of sneakers. Size 10 or size 14, it didn’t matter to me, I simply had to get my hands on a pair of Nike Air Yeezy 2s.
Now, I had zero intention of ever putting these shoes on my feet (crazy right), I knew right away that within a week of these sneakers releasing they would triple in value as the 5000 unit run would become desired across the globe from people in Japan to China to individuals in Iowa, where there wasn’t a store within 500 miles that released a single pair. Within days, I sold my newly acquired Kanye West Nike Signatures for triple the purchase price. This wasn’t the first time I had “flipped” a pair of sneakers but by far the most lucrative. My passion for sneakers was a major part of high school. I am ashamed to say that I have over 50 pairs of shoes, some still deadstock (unworn). Today, when I think back to all the money spent on shoes I get a little uncomfortable, but I don’t regret for a moment becoming a part of the community of sneakerheads.
You might be asking now why would another ever wait, pay, or care for a pair of sneakers? Sure, you see actresses on the red carpet with a $10,000 dollar high heels but why would anyone give a second look to men’s sneakers.
Based off a small subculture dedicated to collecting Nike sneakers, specifically Air Jordan, Niketalk was created in 1999 as a online forum dedicated to sneakers. Even in the infancy of the internet, it quickly exploded into an extremely popular forum where what we today call #influencers met up to talk about upcoming releases, buy, sell, and trade kicks. It quickly transformed into a massive cultural exchange. DJ AM, famous for his appearance on HBO’s Entourage, was a frequent contributor. Rappers J.Cole and Wale, who is rumored to have over 2,000 pairs, both gained popularity by distributing their music on this platform.
Fast forward to 2006, Matt Halfhill started the website Nicekicks.com, dedicated to giving “Sneakerheads” credible information on sneaker release dates. (Fun Fact: Nice Kicks is credited with the creation of the #throwbackthursday.) Nice Kicks and websites similar to it were pivotal first movers in the quickly expanding sneaker industry, which in 2016 generated $17.5 billion dollars in the US alone. One of the most important contributions of websites like Nice Kicks was aiding the sneaker community and culture through fostering it. So, where does the digital business come into all of this? Last year, the sneaker resale market in the United States was valued at $1 Billion. That’s roughly 5% of the entire athletic footwear industry as a whole.
What’s allowed such rapid monetization of a specific subculture? Answer: Social Media
Instagram and Twitter have been integral in the allowing sneaker consumers to stay constantly connected with their community and allowed businesses to market directly to consumers who are EAGER to catch a glimpse of the latest release. Nice Kicks has over 2.8 million followers on Instagram, while Wale, who is highly connected with Nike and famous for posting glimpses at never before seen shoes, has close to 3 million. The #sneakers on Instagram has over 18 million posts. Once solely brick and mortar stores such as Flight Club (over 2 million Instagram followers) and Stadium Goods now do enormous volumes of sales online.
John McPheters, the CEO of Stadium Goods, a popular sneaker consignment store, has been in the sneaker business for more than a decade, says his store does 90% of its sales over the internet.- Forbes.com
Unfortunately, due to the high demand for sneakers in the past decade, many release events have turned violent. Stores such as Finishline, Footlocker, and others have requested police security to keep in-store releases under control. Specifically, in 2012, a 22 year old named Joshua Woods, lost his life after being robbed by a group of teenagers after he purchased a pair of Air Jordan’s in-store. Popular rapper Macklemore wrote his song Wings in response to murders and robberies related to sneakers.
These tragedies lead to discussion about how to keep releases safe and how can companies responsibly release products to consumers. Online hype driven directly by social media can elevate the shoes to much more than sneakers but to status symbols and the violence associated with them has been blamed on sneaker brands by some due to their choice to keep quantities low, demands high, and to continue to release shoes in store.
On a positive note, many online re-sellers have become major players that supply consumers with limited edition shoes without the hassle. StockX, a virtual stock exchange that trades sneakers instead of stocks has been hugely successful in creating a platform where buyers and sellers can interact. Users of the online platform have personal portfolios with the most valuable portfolio reaching a value of almost $500,000 dollars. Due to such early success in the sneaker business, StockX has expanded it offerings to watches such as Rolex, Audemars Piguet, Omega, and Patek Philippe. The success of this online platform displays the opportunities they provide for the exchange of luxury, exclusive goods on peer to peer online platforms. In the future, we may see boats and cars being exchanged on StockX.
The future of the sneaker industry relies heavily on international expansion. The Chinese market has exploded due to the massive rise in popularity of basketball. Nike is a major player within China. Yet due to the Chinese government’s strict control of social media, “retro” or the majority of the sneakers desired in the American resale market have yet to become widely popular. The future of the sneaker game is the dependent on digital business to connect consumers with the exclusive goods they desire. Social Media will continue to be the driving influencer in the industry as it global spread connects sneakerheads with other sneakerheads from all over the world.