Sneakers, a staple in every wardrobe for years, has brought the accessory market close to parity with the growth of apparel market, which has been the crowning glory of the fashion industry for years. The sneaker market is thriving on the back of some of the hottest products and collaborations that have made the millennials and Gen Z be ready to shell out big bucks.
Footwear in general is having its day in the sun with nearly half of the online luxury fashion revenue coming from the segment. It has the highest average annual spend per buyer and annual purchase frequency, according to the US Luxury E-commerce Report, published in January 2019 by The NPD Group. The average online luxury footwear spend has increased 4 per cent to US $ 794, and purchase frequency has also increased slightly to 1.6 times per year.
“It’s not just about the statement bag anymore now, thanks to expanded accessibility, the statement shoe is also an area of focus and investment for consumers. If we pay attention to what consumers are saying, these new market dynamics spell a great deal of opportunity across the entire luxury fashion market,” Marshal Cohen, Chief Industry Advisor, The NPD Group, said in the report.
Fashion stalwarts betting big
A seemingly millennial category, sneakers have proved their mettle across markets ranging from luxury to mass. In 2017, the total global sneakers market was valued at approximately US $ 62.5 billion and was forecast to reach a value of US $ 97.8 billion by 2024, according to Statista.
This exponential growth has caught the attention of every brand in the process of capturing the millennial market, a segment of demographics that has surpassed all others. The most notable contributions to the sneaker business have, however, come from the luxury brands, setting out to establish new trends in the market.
Starting with Balenciaga, the streetwear magnate has changed the game when it comes to footwear. Balenciaga sneakers have permeated street style and culture in the past few years, thanks in a large way to Georgian designer Demna Gvasalia, who took its helm in 2015. Under his stewardship, the Spanish fashion house released popular contemporary sneakers such as the Triple S, Track, Track 2 and Speed Trainer. More popular than ever before, the brand enabled men and women everywhere to ditch dress shoes and indulge in chic comfort. Balenciaga is one luxury label that has injected its own high-fashion aesthetics into the simple sports shoe with great success.
Italian luxury label, Fendi offers stylish sneakers with a difference. The brand, which is renowned for its high-fashion accessories and shoes as well as for its clothes, creates designs that are boldly artistic. Shearling trims, cartoon eyes, pops of colour and embellishments are just a few of the quirky and wonderful features that can be expected when shopping for sneakers with Fendi.
All fashion buffs will find sneakers they love on offer from another Italian gem, Prada. The brand’s iconic chic and eclectic aesthetics are translated perfectly into its footwear range, which currently includes unusual cut-outs, metallic designs and unique prints.
Another designer hard to miss is Alexander McQueen. His unique and edgy signature aesthetics render itself surprisingly well to sneakers. From chunky, oversized styles and straps to studs and even some sea creature embroidery, this collection of shoes is as awe-inspiring and individualistic as it can get.
It’s hard to talk about the sneaker market and exclude the likes of Valentino, Versace, Off–White and Louis Vuitton, who have opened horizons to make comfort chic, all the while maintaining the exclusivity that inspires trendsetters. The list of luxury houses gravitating towards the sneaker market is endless, marking the importance of both the footwear industry and pandering to the millennial mindset.
Although luxury is gunning for ‘sneakerheads’, the traditional sneaker and sportswear brands are not far behind. Everybody remembers how Adidas took the world by storm when it released its ‘Superstar’ line of sneakers. Originally designed for the basketball courts during the ’70s, the Adidas Superstar has since been adopted by rappers and also as a staple lifestyle silhouette. It was the start of something that has chronicled into a massive industry and somewhat coerced the big names to dip their toes in, for the fear of being left out.
The story is similar for other sportswear giants like Puma, Nike and New Balance. The millennial demand is something that has kept even the sneaker brands such as Vans and Converse innovating and collaborating to keep their interests hooked on for more as an increasing number of brands foray into a category that was their dominion.
Trends driving the industry
Like any other industry that finds its footing in the retail space, the sneaker market has had to distinguish itself from the overshadowing throngs of apparel and accessory categories. The entire onus of innovatively enrapturing the right demographic lies on these brands.
Finding the right balance of exclusivity, excitement and appeal is imperative when it comes to the newer gene of consumers who are as gullible as can be. The thrill of standing in line for hours outside your favourite store for that new limited edition sneaker collaboration is a resonating image of exclusivity in sneaker retail. In fact, the ‘drop’ has become somewhat of a norm for unveiling sneaker collections.
A case in point is the launch of the LV Trainer sneaker collection in China in February 2019 by Louis Vuitton, making the announcement via multi-purpose Chinese app WeChat. Burberry and Balenciaga, too, have experimented with pop-ups on the popular Chinese social platform to gain new ground with consumers in the region.
Meanwhile, Barneys lured California fashion mongers with a two-day event called ‘The Drop LA’ at its Beverly Hills, California flagship in June 2018, which featured exclusive collections from Prada, Fendi, Rick Owens and more.
The limited-time limited-edition retail model is a signature of sneaker brands, which have honed it to an art form in recent years. Not forgoing the opportunity of one of the biggest music festivals in the US, at Coachella, Adidas drummed up hype around its collaboration with Donald Glover by having the multi-hyphenate star airdrop photos of his sneakers to a lucky group of fans.
This leads us to a trend that has stood the test of time and does not look like it is going to fade any time soon. Collaborations have kept the sneaker market flourishing year after year. Millennials and Gen Z love the idea of their beloved brands and celebrities banding together to produce rare, statement pieces in the universe of sneakers.
Off-White has been actively working to capture the market with Virgil Abloh at its head. Introducing multiple collections with some of Nike’s most popular sneakers, the brand has kept itself limited to the sportswear giant for the exclusivity. Yeezy, Kanye West’s line of sneakers, is by far the most popular collection, arguably behind Michael Jordan’s Air Jordans with Nike. Pharrell Williams X adidas Originals Superstar Supercolor, Aleali May X Air Jordan 1, Supreme X COMME des GARÇONS Shirt X Nike Air Force 1, Serena Williams X Off-White X Nike ‘Queen’, sacai X Nike LDWaffle, Louis Vuitton X Virgil Abloh, Fenty Puma by Rihanna are just some of the famous collaborations of the sneaker scene.
The buck doesn’t stop with brands and designers putting their names to collaborations. Seen as an ingenious marketing strategy, even NASA collaborated with Vans to produce sneakers sporting patches of the US flag and NASA logo. Next in line was Versace X Apple, a line that was reminiscent of the exclusive sneakers Apple made for its employees in the ‘90s. Puma and gaming legend Sega joined forces to bring out a brand-new colourway for the RS-O. They released two versions, inspired by Sega’s most popular character, Sonic. Coca Cola partnered with Converse and Kith to bring forth a denim cloth Chuck Taylor sneaker that quickly became a must-have in every sneaker-head’s wardrobe.
An opportunity to behold
Such collaborations and exclusive collections are thankfully not limited to a single purchase cycle. Re-commerce is growing fast and the sneaker resale industry at an even faster rate. Many sneaker-heads choose to buy exclusive sneakers and preserve them in mint condition to multiply the price it was offered for, while others choose to hunt for sneakers on resale platforms for a fraction of the price.
The secondary sneaker market has evolved into one with professionalised online marketplaces, including Stadium Goods, Grailed, StockX, GOAT, and KLEKT. These provide a digital-savvy audience with a more formalised process and a number of choices. With the sites taking a percentage of every sale, customer loyalty has become a priority.
The incentive for resale speaks for itself as the price inflation and profit for resellers can be enormous. Nike had previously released a Nike Air Jordan 4 Retro ‘Eminem Carhartt’ shoe. According to Detroit News, the ten pairs that were available on eBay sold for a combined total of US $ 2,27,522. Three pairs of that shoe that were available later on Flight Club had prices ranging between US $ 14,000 and US $ 20,000. It is hard to believe that a limited edition basketball shoe could be a collectible worth thousands of dollars — a shoe that will likely never see the light of day. With these spot cases aside, the secondary shoe market has converged with social media and seemingly given way to young entrepreneurs overnight.
While resale businesses are finding ways to diversify, the market as a whole is bound to become more accepted by consumers and more authoritative in the sneaker space at large.
“We do see retail and resell merging,” GOAT CEO and Co–founder Eddy Lu told Highsnobiety. “It’s not just about flipping shoes anymore. People are coming to us now to buy sneakers, period.”