THE SNEAKER MARKET By Edmond Dong
SNEAKER MARKET TODAY A lot of people in today’s world have their own specific and unique purchasing behaviour, especially with branded products. Brands not only symbolize the company, but it also symbolizes the buying choice of the consumer. Nowadays, customers buy products because of the brand and not the actual needed use of the product. One of the most popular product that most people purchase today is sneakers. Brands of the sneakers is often a huge factor where it influences the buyer’s final choice. I say this because I am one of the customers who buy sneakers based on the brand and the reputation and not the actual aesthetic and usage of the product. Owning the most popular sneakers in the market was not important to me at all because there were no influential factors that swayed me into buying multiple sneakers. Now living in the social and digital media world, there are influences wherever we go. If people place out two different branded shoes (Walmart and Jordan Brand) with the same exact aesthetic, people will choose the more well-known brand because that is how much brands affect consumer behaviour and its ongoing involvement throughout the purchasing process.
RISE OF THE SNEAKER CULTURE Purchasing sneakers, especially the more popular ones require a long and difficult process. These products usually require you to sign up for a raffle just to purchase the products and they are usually extremely pricey when being sold by re-sellers because they typically sell out everywhere in minutes. When stores offer a ‘first come, first serve’ basis for shoe releases, consumers usually line up overnight just to have a chance to purchase the specific sneakers. At times, employees have even denied the people lining up entry because they ‘ran out’ of sneakers. Imagine lining for 8-10 hours and find out the shoe you want is out of stock. For online releases, it is just as difficult. An article by Dave Dormer of CBC News on ‘sneakerheads’ effectively displays people lining up for hours for a pair of shoes. A huge reason why these specific sneakers are so hard to get is the hype behind them. For Jordan Brand sneakers, it is obvious why it is so hard to get, the legend Michael Jordan wore them back in the day. Same for basketball shoes, a lot of people want to be like their favourite basketball stars, so they buy their shoes. Recently for Adidas, a huge part of the sale increase is because of celebrity endorsements, such as Kanye West. Since he is an ambassador for Adidas, as ridiculous as it sounds, whatever he wears it will sell out. For example the picture above is a pair of Ultra Boost, Kanye wore them one time and sales started surging like crazy. Selling out worldwide within a week.
People who wear Nike and Adidas are usually classified as runners and people who wear Vans are usually classified as skaters. The active lifestyle also known as sportswear is one of the largest growing trend at the moment as they expect to exceed $163 billion by 2016. With brand personality, some people look for active sneakers that have the versatility and comfort to work out or be active in, while some people look for active sneakers that are aesthetically pleasing. Both Nike and Adidas are taking over the active lifestyle market as they control 40 percent of the market Sportswear brands like Nike, Adidas, and Puma were always known for their athletes that helps them promote active people who are inspired and motivated by them. Now these brands are starting to expand their expertise with signature sneakers that feature celebrities like Kevin Hart, Drake, and Rihanna, who are not the typical professional athletes. Most importantly, in the end people will still think atheletes are more important than celebrities when it comes to sneaker brands. A lot of the typical athletic sneakers are starting to transition to the fashion world as people wear them for the aesthetic, rather than the technology within the sneakers that are used for their respective sports. That is because sneakers are starting to turn into social status symbols rather than a need to protect your feet.
WHY DO PEOPLE BUY SO MANY SNEAKERS? One of the main reason why people buy sneakers is to, of course, wear them. Some buy to collect and some people, well buy them just to sell them back. People nowadays use sneakers as a form of investment. Most people try to purchase the most popular sneakers that are difficult to obtain in the market just to resell them at a higher price point. For example, the Nike’s Air Yeezy Red October retailed at a price of $245 and were sold out in minutes. Now they resell for an average price of $2,700, with $36,900 being the most paid for the shoe. The thing is, these types of releases happen every Saturday and every single one of these shoes have a significant meaning to it. These releases usually cause people to camp outside before the release date, some even camp a week prior the release. The sneaker marketplace holds the almighty ‘sneakerheads’, people who collect sneakers as a passion. Sneakerheads of sneakers are basically the equivalent of the iPhone fanboys of Apple. Nike, which includes the Jordan brand sold over $1.2 billion worth of their sneakers and since sneakerheads love Jordan’s so much, the secondary market for these shoes are about a third. That means, sneakerheads made $380 million from just reselling the sneakers they got from Nike. Sketchers is second in the sneaker market just behind Nike and has a net income of $209 million. This tells us that the sneakerhead made almost double of what Sketchers made just from RESELLING sneakers in the secondary market, Nike’s customers made more money than their closest competitor. The only reason sneakers go for so much is because they are rare and hard to purchase, but that is how resellers in the sneaker marketplace make their money.
SNEAKER TRENDS Nowadays, there are many factors that result to the consumer behaviour on purchasing sneakers. The first reason is the motivational process. There are so many marketing campaigns around us that influences our buying decision. Now that we live in a highly advertised and digital world, we see promotional events and campaigns everywhere. Everywhere website and every street corner, you will see an ad. The consumer behaviour when they look to purchase sneakers is starting to go from a want to a need. This type of need is called a psychogenic need, a need to show power, status, or affiliation, rather than a need to survive. The motivational direction of buying sneakers is to look for the brand rather than the actual product. For example, when people are looking for a shoe to play basketball in, they look for the most popular one, rather than an alternative shoe that no one knows about. Social media plays such a huge role when it comes to sneakers because social consumers are rapidly growing in today’s world and it is not declining anytime soon with the digital media world rising at the same time. A lot of today’s large brand names like Nike, Adidas, and Vans, are leaning most of their advertisement towards social media because the social usage behaviour for the current generation is so high.