Before NFTs and cryptocurrencies, there were paintings by famous painters, artist memorabilia, and luxury cars. All of these objects have in common their limited edition, something that manufacturers and auctioneers play with to give a value to their products that goes beyond the limits of monetary value. Today, in the practice of collecting, to the list of objects mentioned, we must necessarily add sneakers or sports shoes.
“When you explain to a person that there are sneakers on the market that can cost more than 10,000 euros, like the Nike Air Mags Back to the Future (2016), the first reaction is rejection. But like in any other market, sneakers have history and culture, and depending on their exclusivity, the magnitude of the prices increases,” explains Cristian Vicente, a History student in Barcelona and a collector in his free time who has resold more than two hundred pairs. of sneakers.
There are models that drive excess demand. They can have a theme about a city or country, be a collaboration with the artist of the moment, be the relaunch of a historical model, or simply have a limited production of a viral model among the public. These factors can increase demand, limiting consumer accessibility to those who are informed and in the right place.
“Just as there are Rolex watches that quadruple the value of their starting price (due to their limited quantities), sneakers that are more complicated to acquire, in general, increase in price,” explains Vicente.
If there was a time when resale sneaker prices rose, it was after the pandemic. Dylan Dittricht, head of research at the consulting firm specializing in emerging collectible asset markets Altan Insights, attributes in his article Did the Sneaker Market Crash? the sharp increase in the market due to limited availability due to supply chain problems related to covid-19. “At that time, Nike could count on both buyers and resellers to take advantage of available stock, which was reflected in the rising prices of Nike models on resale platforms such as StockX. The sale was guaranteed.”
The resale market grew enormously with casual sellers, mostly young people under 30, who saw a relatively easy opportunity to make money from home. “As in almost everything, the blame can be blamed on social networks,” Business Insider concludes in an article.
This is the case of Marco (not his real name), a 24-year-old young man who started reselling sneakers in the summer of 2020. “During confinement I spent a lot of time on social media and the Instagram algorithm started showing me celebrities from the world of resale. The majority were Americans, since the market there is much larger. They made a lot of money, and I wanted to try. Since then, the most expensive model I have sold was a Nike collaboration with Travis Scott. "They gave me 1,200 euros."
Although sales on platforms like StockX do not directly affect companies' revenues, analysts indicate that resale values can measure consumer sentiment.
“It's marketing. First, they brand a limited number of a model so that later on resale their prices are inflated due to scarcity. When that happens, they launch a very similar sneaker design, but cheaper and with greater volume. Thanks to the secondary market, these sneakers have caught on with the public and they will want to have them,” explains David Cotoi, owner of Ci Store, the first resale store open in Spain.
In the last year, sports resellers have not been immune to the increase in inflation and the loss of confidence in the sector. The motives? The proliferation (and improvement) of replica sneakers, as well as the intrusion of bots and machine learning programs, which professionalize the search for trends and expel young amateurs from the market.
If you look at the evolution of the traditional sneaker market, according to the most recent data published by Euromonitor International, global sales amounted to $152.4 billion in 2022, which represents an increase of 2.7% compared to the previous year, but a drastic slowdown compared to the 19.5% rebound recorded in 2021. On December 22, Nike shares fell 11%, after anticipating greater weakness in revenue for the next six and exposing a savings plan of costs of 2 billion dollars.
In the resale market the trend is similar. “There are sneaker releases that if they were 2019 they would have been over €500 in resale and currently they do not reach 250-300 euros. It seems that the average buyer has lowered their budget,” explains Cristian.
Skeptics of the resale market have not been slow to label the market situation as bankrupt after the drop in prices. Something that Dittrich rules out. “It is a statement that is born from the disbelief that this market, which has not stopped rising during a prolonged period of boom, could fall.”
Following the same line, analysts from the financial company Cowen reaffirm in 2023 that the resale of sneakers continues to be one of the most permanent trends in the consumer sector, as the transitory patterns of pandemic spending fade until 2023. Thus, they affirm that sneaker resale can reach $30 billion globally by 2030, with annual growth of 16%.
In the last two years, a large number of resale stores have chosen to diversify their offering. This is the case of StockX, which has expanded its product line to include clothing, collectibles, electronics and trading cards. GOAT Group, another resale platform for new and used sneakers and clothing, recently purchased the resale platform Grailed to also strengthen its range of clothing and accessories. In 2022, Ci Store reopened its store, after closing for a year two during the pandemic, and also opted to include other items. Is this the key to survival?
Although Cicoi does not fear for the future of his business, he doubts that the rest of the physical stores specialized in resale that plague Barcelona can say the same. “In Barcelona there cannot be more than 10 stores that sell sneakers for 300 euros, it is a niche market that does not pay that much. Most offer the same service, without any differentiation. In addition, they have to compete with online platforms that offer products at a more competitive price.”
It is precisely on the Internet, specifically on social networks, where the driving force of the business is found. In an ecosystem where generation Z reigns, Instagram and TikTok have changed the way a brand is perceived: they are no longer looking for a company, they are looking for a person. “We have personified Ci Concept very well. "They see me in the videos, they get attached and come to buy in the store."
