Read Part 1:
Black Friday Sneaker Data 2022 Part 1 | How Resale Platforms are Being Shaped by Nike: eBay Sneakers
In Part 1 of this series I looked at eBay’s Black Friday data. Here I utilize a microset of data from StockX.
NIKE, Inc. Reports Fiscal 2023 First Quarter Results — NIKE, Inc.
In Nike’s recent quarterly report, they showed, “Inventories for NIKE, Inc. were $9.7 billion, up 44 percent compared to the prior year period, driven by elevated in-transit inventories from ongoing supply chain volatility, partially offset by strong consumer demand during the quarter.” This led to consternation by analysts who posited Nike would encounter headwinds by being promotional to remove the glut of products in their supply chain. The hypothesis was consumers could grow used to the discounted prices and deals causing them to hesitate on purchasing product at SRP. It’s a logical conclusion to make but waiting 3 months for the results from data analysts who use Point of Sales data is a slow process and doesn’t benefit the market since sneakers and fashion trends shift so quickly.
I use a combination of resale research from eBay’s tools and an individual seller’s set of data via StockX as an indicator of brand heat and to measure if my data parallels the larger retail market. This isn’t a foolproof system, but I’ve found my microset of data is comparable to data utilized by larger firms. Since my data derives primarily from StockX it’s easy to think that information could be skewed. To offset concerns, I offer the bevy of reports on this site which have been compared to the top 10 sneakers sold that firms list at the end of quarters. My information is more immediate and informative as it is as close to real time as you can get, although it’s smaller. I can immediately pull daily data from StockX. When their “Export Data” feature is working, the company will send a full report of the last two years which makes research much easier.
Why Do I Think Nike’s Inventory Woes Will Be Short Lived?
In my report on eBay, I established the platform is losing ground, but I asked the question if it was because of Nike’s inventory issues, or another resale platform. I’m confirming here StockX is no longer a thorn in eBay’s side, it’s a long-term eclipse basically turning resale into a dark valley where other resale platforms are left attempting to navigate night with a keychain flashlight. Since my working hypothesis states that Nike will move through their 44% inventory by next spring, I have to provide evidence and my hope is that a ratio/extrapolation will suffice. Focusing on a longer window than I did in Part 1 for eBay, this small set of StockX data is quick and has consistently paralleled the larger market; I trust these numbers to make predictions. Guidelines for StockX data: Sales pulled from 2018 to 2022 to show performance on the platform. Days covered in research: Black Friday through Cyber Monday:
Why the Jump From 2021 to 2022?
In Part 1 I stated resale was trending down and as evidence I used the keyword “sneakers” to research sales for Black Friday on eBay. It’s clear in this data set that sales are not trending down, but an infographic/chart can’t be taken at face value. A discussion has to take place on the “why”. Research on Google Trends shows a steady increase search for the keyword: StockX. As more people began to dabble in sneaker resale, the market became oversaturated. A few things began to take place at a much faster rate than they had in the past. Sneaker resale has been cyclical. Sales shifted from platform to platform, but there was risk. Buying and selling on eBay and Amazon meant being extremely aware of trends and understanding how to acquire and sell through inventory. I’ve written about this before, but in 2010 sellers moved from eBay to Amazon. In 2013, Amazon began to remove requirements for being approved as a seller on the platform and a flood of knock-offs and counterfeits filled the marketplace. Sellers went back to eBay and many began building their own websites because the ease of Square, Shopify and WordPress empowered sellers. Every two -three years resale shifted locations and every five years there was a reset. When Campless became StockX at the end of 2016 heading into 2017 and the GOAT app arrived, resale became democratized. As the platforms grew, the average sale price began declining. As Nike began to move to a direct-to-consumer strategy this began to shape the acquisition of sneakers. Another aspect that changed was policies of retailers who became frustrated and tired of the countless resellers attempting to buy all of certain SKUs. Retailers implemented policies in 2021 limiting the amount sneakers that could be purchased.
What does this have to do with the considerable jump in 2022? Everything. Nike’s inventory issue has meant that the brand has been flooding their doors. The savvy buyer has been able to capitalize on these opportunities, but instead of taking their deals to eBay, those sellers decided quantity over quality was the key. StockX enabled a risk-free transaction for sellers and those with older accounts featuring early payout and lower fees could ride the considerable amount of marketing StockX has done to capture traffic from eBay. The question becomes is this spike similar to 2020 where there was an abundance of sneakers available with discounts and pent-up consumer demand? Not exactly. In 2020 the growth was based on less competition. This year the growth is based solely on nearness to Nike retail outlets. Retailers aren’t getting huge allotments from Nike. Foot Locker announced a plan to carry a more diverse product mix. Sneaker Bots pulled most of the premium product from the marketplace which meant all of those new resellers who weren’t located near a Nike store were unable to capitalize on the deals. This also means all of the consumers who aren’t near Nike Retail locations had to resort to purchasing online and StockX, when compared to retailers Foot Locker, Finish Line and Hibbett Sports, gets an average of 36 million visits per month compared to 14 million, 13 million and 8 million visits per month respectively. Although this is a small data set, it definitely provides a window into why the concern around Nike’s inventory woes, is overstated. When Nike is available in abundance, which is becoming more and more likely, buyers will utilize buy now, pay later options and credit to purchase a piece of the coolest sneaker company on the planet. This doesn’t mean they won’t purchase at SRP either. When Nike drops a hyped sneaker they still sell out. Resale may not be taking place from retail doors as much, but Nike understands their consumer and using digital place product in their stores in the correct locations will help the brand to get inventories level much sooner than expected and those consumers who don’t use Nike.com or visit doors will find their way to the Swoosh and Jumpman.
