Rise of online marketplaces forces footwear marketers to rethink resellers
The rise of online marketplaces that resell trainers, such as StockX, now valued at more than $1bn, are forcing brands and retailers to rethink reseller marketing strategies (The New York Times)
Key points
- StockX treats trainers like tradeable commodities. Traders arbitrage rare footwear and the platform shows past sales and pricing history, much like a stock market
- StockX positions itself as ‘a stock market of things’ and also trades streetwear and luxury goods. Gross product sales now +£100m a month
- Streetwear and trainer reseller market set to triple to $6n in US by 2025, analysts suggest
- Brands such as Nike say not part of strategy, but retailers such as Footlocker and Farfetch Group investing in reseller platforms
- New StockX CEO says brands will ultimately have to pay attention
- “Nike, Adidas, Louis Vuitton, Gucci, Rolex, whatever it is, they're certainly not ignoring marketplaces and are not naive to the fact that their distribution channels are evolving,” – StockX CEO Scott Cutler
Turning footwear into a commodity is an interesting concept – and StockX’s sales and valuation suggest it has legs. CEO Scott Cutler ultimately hopes to do away with static pricing – with goods priced based on supply and demand. Whether that catches on remains to be seen but there are some points to ponder for retailers and marketers from the new breed of marketplaces and their approach to scarcity pricing.
There is broader potential impact.
While SpotX and others tend to trade unworn goods (as these command a premium), second hand luxury marketplaces are also taking off. One such firm, The Real Real, went public last week at $20 a share, valuing it at $300m. Shares soared 45% within 24 hours, despite the company posting a $76m loss last year. According to The New York Times, The Real Real specialises in second hand goods with Gucci, Cartier and Hermes among its best sellers. It employs 100 experts to authenticate goods and weed out fakes and 2018 revenue increased 50 per cent.
But some brands fear the impact on their sales. Chanel launched legal action last November against The Real Real, alleging it was selling counterfeit goods and claiming affiliation with the brand. The Real Real has countered that Chanel is acting anticompetitively and attempting to undermine confidence in a market “it views as a threat”.
