Nike gives you plenty of opportunities to help fight climate change through your shopping choices.
There isn’t any secret that resale is getting more difficult to do. The Golden Goose isn’t done laying eggs, but the multitude of issues potential resellers face in a post-Covid environment are emblematic of a shift in policy by retailers and changes in strategy by brands. I can dive into every aspect, but I’ve discussed them on several occasions. I never explained why or how brand strategies focused on extending the life of their footwear will contribute to a continued decline. Before diving into that aspect, I have to state that there will be one more boom in sneaker resale, before third party platforms adjust to the new reality.
One More Chance
Biggie’s song was remixed at least ten times. That’s Sneaker Resale. Since flipping shoes became a business opportunity and sellers have turned what was once originally a means of getting coveted kicks to collectors into a hustle, Sneaker Resale has shifted. Sellers have moved from eBay to Amazon, from Amazon back to eBay, from Kixify, to Poshmark; entire software platforms have been created to allow sellers to manage their inventory on multiple platforms from GOAT to StockX to Grailed.
eBay had fees, removed fees, and reinserted fees in an attempt to offset the incredible growth of StockX. Sellers go to where the most money is with the least stress. That has been StockX, but in shifting to StockX, more resellers were created. This has contributed to a marketplace built solely on the ability to acquire the most coveted sneakers. As retailers changed policies, getting multiple pairs is harder than it has ever been. This was fine a few years ago as many resellers also operated by using arbitrage. A buyer could walk in an outlet store or Clearance/Factory Store and buy pairs. Nike Refurbished and updated policies at these locations have reduced this opportunity.
Resale isn’t going away, but the explosive growth allowing startups to garner investments from venture capital firms, is over. There is one more chance on the horizon. As supply chains begin to normalize throughout 2022, stores will begin clearing shelves to make room for a lot of back orders. This will give resale the impression that it’s back. Stores will utilize promo to get off of stock and arbitrage will feel like it used to in the heyday of Sneaker Resale. Like Biggie’s “One More Chance”, resale will be hot, and then Resale will end up on adult radio as a reminder of the Golden Era of Resale.
Nike’s Refurbished Will Disrupt
Every brand is implementing their own versions of circular programs. In doing so, they will dip into the pool of buyers who visit eBay. This will not hit StockX at all. It will shape platforms where used sneakers are still a form of resale. StockX has never sought to be in the VNDS or NDS market. More important, StockX has created programs where they are actually keeping inventory. Their NFT program has allowed for their Vault to be filled with coveted sneakers. StockX has also taken the time to develop their DropX and IPO programs. These concepts have proven to brands that StockX is a viable only partner. eBay remains very similar to what it was at the start of sneaker resale. This seems like it would be a benefit. It was and it is, but encroachment isn’t just a penalty in football. It’s the process of a business overstepping its boundaries intentionally. Nike never had a relationship with eBay, so Nike Refurbished isn’t ‘encroachment’, but it will definitely become an unwelcomed opponent of eBay’s business.
As Nike Goes…
Right now eBay dominates the sale of used sneakers. Nike has begun to train its consumers in its apps and on its digital platforms, how to take care of old sneakers. Nike has yet to ramp up the discussion around used kicks, but this is changing with their recent post to their Nike News site. eBay has been so busy looking at StockX, partnering with influencers and highlighting eBay Sneakers as something cool and new, they probably haven’t noticed the subscription programs by On, or adidas’ Made to be Remade program. They haven’t noticed New Balance providing sneaker rentals with hotels. They’ve overlooked Nike introducing Product Care: Product Care. Nike.com
Now with Nike Refurbished, an extremely big problem for Nike as they’ve grown the Consumer Direct Acceleration is getting a slow solution. Returns have been an issue for Nike’s CDO/CDA. The company has added distribution centers and in the process of rolling out more Nike Refurbished in their retail doors, they are creating an opportunity to recapture the 460,000+ sales taking place on eBay weekly. Consider that Nike has yet to introduce store credit, head starts and Nike points for consumers who return slightly used sneakers. Consider that Nike Refurbished allows Nike to regionalize returns. Then realize that none of the big brands have enough doors currently to follow suit. My prediction is that over the next three years will we witness a ramp up of brand doors being opened by adidas, New Balance, and Under Armour. These smaller doors will be presented as additional opportunities for circularity. As programs allow buyers to recycle their running shoes, or return their shoes for credit or points, eBay will find its moat being drained.
It’s hard to beat bots, but expect considerable advancements there as well. This is a moment to mark.