Picture via Release Calendar at Foot Locker.
The unintentional changes from raffling aren’t immediately noticeable and probably are overlooked by those who aren’t participating in the digital aspect of sneaker shopping. To better consider these changes, a breakdown has to happen. There are a variety of customers who visit sneaker stores. There are also a variety of sneaker stores available. Let’s take a quick look at how digital store raffles have shaped retail.
Parents and Young Children
This group doesn’t rely on Apps to shop. The parent understands the changing needs of their children, so they shop based on price in most instances. They will look for cool product but will just as quickly settle on a pair of shoes that are on sale. The raffle has affected this customer when they are willing to pay the extra dollars for a hyped product release. Since this customer doesn’t visit the store often, it can be very off-putting for them to walk in the store looking for the new release only to be told they can’t buy them if they didn’t do the App raffle. The App is not a plus for the store in this instance. This customer also makes stores like Journeys, Shoe Warehouse and other chains, not really a part of sneaker culture, work. Teens who aren’t active in sneaker communities, but do have a sense of style, drive the sale of Nike’s take down models, or they move the needle on brands like Crocs, Vans and New Balance, or even the licensed brands like Levi’s at the stores that don’t have to deal with raffles.
The Gifting Shopper
The age varies considerably, but like the parent and the young child, the App doesn’t matter, and the raffle is a hindrance when looking for a new “launch” day sneaker that the person may have heard about on social media. This person may not be as active digitally in the sneaker world, but they could be. Due to the need to turn on notifications and the requirement by brands and retailers to constantly engage with their Apps, this customer will resort to other retail outlets. They want the product, and they will visit each location in the area to track kicks down. This shopper has contributed to the growth of resale and will become more reliant on StockX and third-party outlets, to avoid the frustration of visiting multiple stores. After initially failing to cop on a retail visit, they are willing to pay resale to take care of a friend, family or peer who really wants ‘X’ sneaker drop.
The Cool Crowd
These tend to be teens, young adults and older demographics who spend time on the sneaker blogs. They understand the digital world and are readily checking the site, blogs and Apps for info to scoop the next pair. They follow all of the retailers and brands on social and they have their notifications turned on. This customer will randomly visit retail locations. The raffle system has actually helped and frustrated this consumer. They will celebrate and share their wins, only to rage against the machine when they miss. They hate bots that grab all of the sneakers in a drop but will consider buying one to keep up. They also hate resale but will buy because they don’t want to be out of the loop. The raffle system for this person is a badge of honor and this is the customer who will take advantage of loyalty programs. This customer is vital for the success of a business, but they shift trends as the moments happen. Clout is at the core of their shopping habits.
The Cash Customer
This segment is the most intriguing. They keep dead malls afloat, and they purchase a considerable amount of apparel and kicks, but they don’t have a deep knowledge of sneakers and will ask upon entering the store, “What’s the newest shoe?” When this customer buys, they go head to toe and are typically the most powerful consumer for sneaker retail. This is the customer the raffle system is unintentionally shaping. When the new release is a raffle only, they simply aren’t interested in messing with it. If they don’t have a peer/plug, they will settle for what matches best and for those stores that have been cut off by Nike, it’s this customer keeping the store afloat. This customer isn’t completely involved in digital, but as I’ve written on a number of occasions, they are getting there because of digital payment Apps. This is the most valuable customer in the sneaker industry and it’s a segment that has been Nike’s most loyal fan. The raffle system and Nike’s limited distribution is slowly changing this loyalty and the brands who learn to find this consumer and build a bridge to empowering this consumer will see huge dividends.
The Multiple Account Reseller
Possibly the worst customer for any retail account. This customer doesn’t look at apparel and isn’t interested in what the store has to offer, they are only there to get the shoe selling for the most money. On raffle days, they utilize a number of phones to nab as many wins in the raffle as possible. They only visit the store when a drop is on the horizon and this buyer has led to the termination of store managers because of their desire to get as many pair as possible. The raffle system has been vital in limiting the reach of this customer, except when bots are involved. Foot Locker has corrected their release process on the app and created a 3 point check in system. They have a greeter at the door who checks for the name. Once the name is checked off, the person can enter. Once at the front of the line, another printout has to be checked and then the QR Code from the win is scanned. Foot Locker has also improved their secondary release process. If a customer does not pick up a shoe that’s hyped like the Air Jordan 11, Foot Locker then places the shoe back into another raffle. This limits the store manager from selling the shoes to the highest bidder, if that is taking place.
The Everyday Sneakerhead
This is a customer who knows kicks but may work a lot of hours. They may stay a bit outside of the city and they can’t come to the mall at will. This customer doesn’t have to get the hottest drops, but they may have one shoe they are checking for on occasion. This customer is great for sneaker stores because they will buy a tee shirt or something to match the sneaker of their choice. It’s not an every week, or every two weeks thing for them, but they might buy kicks once a month or every two months. This customer is golden. They tend to forget about the App. In this instance, the raffle sucks. They are falling out of love with sneakers because the discovery aspect is gone. They can’t just walk in and find something they’ve been looking for because it just doesn’t work that way anymore. They are resorting to third-party and that’s a dangerous thing for sneaker stores.
How Sneaker Stores are Being Shaped by Raffles
While Foot Locker’s raffle system has improved release day considerably, a store like Finish Line will still do first come, first serve. In the picture above, the Finish Line is to the left of the Boost Mobile Store. This line went on for another 50 people. There weren’t any issues with the release, but the entire situation was a powder keg waiting on one small flame. This isn’t really an example of how the raffle system shapes retail. It’s a symptom of resale and hype. The annual Jordan 11 release has become a rite of passage. The “Got Em” is a badge of honor. No other drop contributes to this type of behavior from every customer listed above. When there are raffles for shoes not as well known, but equally as hyped (the Panda Dunk for instance), the line is typically filled with resellers. The raffle in this instance removes hope for the Everyday Person shopping.
The “Launch Day” sneaker contributes to an environment where the Everyday Consumer, who may be a fan of shoes, is no longer inspired to browse the shelves or visit the store. With every drop that has the potential to be hot being placed in the App, it hurts other brands. Nike doesn’t have a duty to pull customers to their wholesale accounts, but those wholesale retailers should understand what they are doing to themselves. Wholesale accounts need to demand of brands with high heat, that they should be able to deliver the shoes on their own schedule, at their own pace. The issue with this is one that I saw out of a Hibbett Sports Store a few years ago. A manager was telling her employees that certain releases weren’t in. She was pulling the shoes and moving them. She would then scan all of the shoes in from pictures and place the money into the register. Her bulk buyer would pay her on the side. The only reason she was caught was because her District Manager caught the transaction taking place in the parking lot. The Raffle System prevents this from happening, but it also prevents the act of discovery by the consumer.
There should be a balance under a careful watch by auditors and loss prevention. The bigger issue is there are resellers who visit stores on a daily basis. They will camp out outside of the stores and inside if they can. Giving managers a chance to create discovery, unfortunately isn’t a possibility because the moment one reseller sees a shoe in store, they call an entire team. As much as I’d like for sneaker stores to allow for discovery, those days are over. I explained to someone that I was my own type of customer. I was the Thoughtful Reseller. I didn’t buy hyped sneakers. I asked managers how much they needed to make their days and I’d buy shoes just to help out. I’d buy shoe cleaners or items to help with metrics. I utilized my military discount to my advantage, and I sold shoes that no one was really purchasing in stores. I could spend 30,000 a month at a store. I don’t exist anymore. I actually stopped buying over two years ago. StockX led to democratization of resale. There aren’t any relationships or connections made. The turnover of managers and sales leads at stores is at an all-time high. Discovery is a thing of the past. Raffles, as much as they kill discovery, are shaping retail out of necessity.
