The Resale game is at a crossroads.
Juggernaut, Nike , is still well ahead of any and all competition, but like the fabled Hare, it is coasting, failing to take the final , decisive steps which could put its arch-rival in the rearview for good.
Nike subsidiary , Jordan – maker of this week’s grail drop – would prove on April 1st that it undoubtedly owns the highest level of brand prestige this side of Supreme when it drops a Dime like the Royal 1 in remastered form.
Nevertheless, JB is an old dog with one solid trick (OG retros rehashes) , trying (and failing , imo) to learn a new one (wide release retros that sell out at full price) on the fly.
Meanwhile , adidas – the tortoise to Nike’s hare (duh) – is doing everything right in playing the catch-up game – almost.
All of the major factors – innovation, cachet (cool), alternative influencers – that get buyers and investors excited about the Three Stripes are hitting on all cylinders.
Yet, nearly halfway through the second year that adidas has dominated the “what’s in” conversation for kicks, it hasn’t taken things to next level, hasn’t taken full advantage of its newfound momentum to the extent that it converts Nike/Jordan loyalists. Until it gets those buyers on-board, its growth will sputter, hard as that seems to believe right now.
The Weekend ending April 1st , interestingly enough, featured releases that would bring all of the above realities and concerns to the forefront.
For the first time in a while , the Swoosh would take a backseat to the Jumpman and adidas, who not so much as went head-to- head , but had drops that were microcosmic representatives of the issues at the center of the sneaker game at the moment.
First things first:
Jordan Brand had two releases for April’s Fool’s weekend that by year’s end will be hailed as two of the year’s best: the third coming of the Jordan 1 Royal OG, and the highly regarded Kaws x Jordan 4.
Outside of those those Grails it was business as usual: a smattering of sitters. Here they are.
In a show of solidarity with its far older sibling, the XXX1 dropped in the same Royal colorways. Need I say where those can be found?
Ditto the two OG Low Premiums ( apart from the White pair; MIA). Find them right here .
Retro 4 (Unicorn)
I Suppose if DJ Khaled is seen flexing on the Gram in a pair of Jay’s, one can be pretty certain said pair will be an insanely hard shoe to cop.
That’s actually not always true, but the Kaws x Retro 4 most certainly was very hard to obtain.
The shoe released as an Asia exclusive on March 28th ,with a stateside drop three days later on Friday , the 31st. The Blogs made sure to remind those plotting a buy about how scant were the IRL venues stocking the shoe. The stores themselves made sure to keep hypebeast drama away from its doors via raffle-only releases. Nike ,of course, held its own draw for the shoes.
When the 4 finally dropped, care to guess what happened?
The only thing that could: an instant sell-through, followed by resale market activty supportive of prices five to six times the MSRP for a pair.
At its current price point, The Kaws 4 has already joined the ranks of the most expensive J’s in existence , according to StockX.
Will the shoe remain there? For my money, it most likely will; it’s a truly unique collaboration.
Jordan 1 Retro OG
For just the third time ever, the OG Royal was seeing a release since it’s original debut in the 80’s on April 1. Complex’s Russ Bengston had a nice write-up about the special place the colorway occupies in Michael Jordan’s memory.
The 2017 retro had a special release , too, dropping in semi -limited numbers, but via a tightly-controlled rollout conducted via app reservations for nearly every big retailer, including Nike. The most interesting effect this had was making the shoe seem to be more limited than it was.
The OG Royal has already resold more than 3500 pairs via common channels ( consignment, eBay , StockX, etc) making it the fifth-most resold shoe in the past 12 months.
This is proof that the shoe wasn’t hyper-limited , as the release procedure may had led many to believe. The logical $300-ish ‘go’ price was hence fully in line with how the semi-limited pair should’ve performed. Prices have more or less stayed there, as the bargain pairs of this Grail continue to get snatched up.
An aside: JB at the Crossroads
With the Broyal 1 drop, Jordan showed that there really is no other sneaker that commands the same level of blind support in the aftermarket, that can also move big numbers at elite pricing – take that Yeezy.
The above is rightfully so. The Air Jordan 1 is one of the most iconic silos ever created.
So “what the problem is”, then?
All or Nothing: Retro or Bust
The problem is that Jordan is a brand of extremes and always has been. For every near-riot inducing , outsole licking retro release , there are countless other “who , what , huh?” GR and Team Jordan drops which, regardless of their merits (or lack thereof) fail to register in the minds of otherwise committed JB buyers.
When the canonized 1 through 14 retro sneaker styles are so strong , though , the Jumpman can, more or less , get away with this inefficiency in marketing.
One would think , however , that the Brand would, at some point , take measures to change that, to make it so that sales the heat would lead to sales of the less sought after shoes.
Solution: Price adjustments
The easiest way to induce buyers to take a chance on the GRs and Team stuff woul be to adjust the prices of both the guaranteed-to-sell heat , and those sure to sit a while.
Prior to restructuring its retro release strategy during the Summer of 2015, retros were all semi-limited, even styles most people didn’t want ; everything sold out fast, relative speaking.
Nowadays however, months pass and some special colorways get totally forgotten about before they earn a mention on a blog, because because they’ve gone on sale.
Within the last six or seven years, Jordan Brand has gotten adept at translating buyer’s love for select retros into an unstoppable force in sneakers. The annual ‘Holiday 11’ tradition is evidence of this.
The strategy had been based on limited quantities most coveted styles and colorways. This has recently been expanded to conducting mega releases for truly Elite styles ,namely the Holiday AJ 11 , the 2015-16 72-11 version of which sold more than a million pairs last year, an incredible feat. It’s perhaps more incredible that it has seemingly been topped by the subsequent 11, the Space Jam -, which Nike says is it’s best-selling shoe ever – despite the never-ending price hikes.
This shows that while at the top end Jordan is tremendously successful, the middle and low end is flagging , mired in the “no man’s land” of long shelf-lives, price slashings, and buyers being wise to how to play the game: chase the heat, and wait for the rest to go on clearance before copping.
The above is an unfortunate mentality for Jordan buyers to have, but it’s a monster the Brand itself created and must deal with. The Shoes the G.O.A.T. wore and performed his legendary feats in have long been collectibles for select sneaker buyers, and like any limited collectibles, the issue of long-term value has been as integral as anything else.
It’s ironic , then , that even though the majority of sneaker buyers now are not proper collectors, the centrality of the “MJ with the Bulls” 1 through 14 retros has remained constant. The Jordan resale game, which was once where Jordan collectors would sell and/or trade their pairs after months and years of holding them, has transformed into the buy to quickly flip “resale hustle”, with mini collectors / resellers selling two pairs at a premium to pay for their personal one.
The pace of the Sneaker Game has quickened, retro releases dropping every week of the year in some capacity. This has become the ‘Age of Value’ (and value-seeking) in Sneakers.
Prices have risen steadily over recent years, and smartphone ubiquity has made information about (availability, aftermarket prices, etc) sneakers available at the touch of a screen, which has led to cautious, selective buyers.
Since but a handful of Jordan drops are ‘can’t lose’ investments, those are the ones buyers are likely to pursue, to the detriment of a number of shoes they might otherwise consider if given the incentive a price break would provide. Only a lunatic would pay $200 for a ‘worthless’ GR like the XXX1, when the limited Royal 1 is $160, and guaranteed to be worth double that by the end of its release day. Most buyers are far more likely to chase the OG than consider any other option .
Jordan Brand has been dropping and re-dropping the same shoes for long enough to have developed an expert understanding of which styles buyers want the most, and which they want the least. It can easily adjust box prices of various styles to reflect this desirability variance. It could do this, because if one thing is certainly true, it’s that even GR retro J’s hold their values fairly well. XXX1s would move for prices between $100-150, sell out, and suddenly become relevant sneakers. OG colorways could be safely marked up a bit, and the only thing that would change would be the amount of small-time resellers racking up on pairs.
As it stands now, Jordan seems content with its current marketing model, where a handful of retros make waves, but even the Brand’s biggest, history making signee (this guy) can’t move Jumpman non-retro product.
After all, Jordan retros do sell out eventually everywhere at some price without having to go on deep (50-60%) discount, so who needs those CP3 X profits?
Things may seem just fine for the Jumpman right now, but at some point down the line, one has to wonder how its “all-and-nothing” marketing will play out.
…..At the crosaroads
The hidden scourge of Jordan brand is its inability to consistently move all but the most reliable, dependable retro sneakers, mostly due to a cult of personality built around MJ’s most iconic styles and colorways.
The hidden scourge of parent company, Nike, is quite different: Over-saturation and overpricing.
Nikestore Grand Tour
As of this writing, about 1100 styles of Men’s footwear are available at Nikestore. Barring slides and cleats, the cheapest pair on sale is a Converse All-Star Low for $35-$40.
The cheapest significant shoe one can buy, however, is an Air Force 1 LV8 Low, marked down to $60 from its $100 MSRP – a 40% discount, as it we’re.
From then on, as we progress upward through price points of $70, $75, and $80, we encounter a host of non-sneakerhead-significant kicks, plus a scattered selection of Nike classics. Some ‘budget’ styles, like the SB Bruin are in this price range at full price.
At $100, we see finally see premium sneakers like colorways of the Lunar Force 1 Duckboot, LeBron Soldier 10, plus more GR basics like Dunks, and AF 1s, at full price and on disco.
The price range $120 to $175 is Nike’s marketing wheelhouse, the place where the biggest number of the Swoosh’s most relevant, highest quality sneakers reside. Here, we see the Kyrie 3, KD 9 (already marked down from $150), Premium Nikelab AF 1 Lows and mids, Uptempos, the Air Max 1 Pinnacle, along with numerous ID options. Above the $200 point mostly sit soccer studs, and the most Premium Nikelab concoctions.
The Three levels of selling
1. Undeniable Value
Sellers thrive when they are able to offer buyers undeniable value for products. Supreme t-shirts that retail for $45 sell out instantly, because they are limited and they are ‘worth’ double that, according to those who really want them, and missed out at the lowest (retrail) price. $45 for a Supreme tee is, thus, a steal.
2. Perfect prices
Sellers do okay when they perfectly price items, not giving away too much value to buyers, but providing enough for most to still justify the cop, because the item will sell through at the price, and carry a small Premium in the aftermarket.
At average prices of $230-$250+, Nike Foamposites are among the priciest shoes Nike makes and sells. But, as I’ve reiterated before, buyers support that MSRP, even if the shoes don’t always command much of a premium above the box price, because it doesn’t release that many Foams .
3. The overpriced
Overpricing items is a dangerous game for any Brand. It is a move that can really only be ‘gotten away with’ when the seller essentially has a monopoly on a particular product, and that product is in unusually high demand, like say iPhones or apartments in New York City.
The Problem: Nike thinks it is Jordan Brand
I chose the examples of iPhones and NYC rent levels for the hell of it. I could’ve easily inserted Jordan into either of those two slots. After all, it is now plainly apparent that, given the wide releases many shoes are seeing, some retros are overpriced. Nevertheless, the strength of the Jordan Brand cachet lies in the fact that it is the only sneaker maker which has at least fourteen entriely distinct silhouettes it can market to the same buyers. Jordan heads may love 6’s, but could just as easily rock a 14 or 11 low if it suits them.
The same cannot be said for Nike classics. Buyers who swear by nearly everything Air Force 1 often turn their noses up at Sock Darts or Internationalists.
This means that whereas Nike has a small handful of cult classic silhouettes with a relatively strong following, Jordan Retro is its own cult.
So, when a Jordan buyer who waited for the too-many-pairs-made Chameleon 6 to go on sale finally sees the shoe for $175, they’ll scoop it up. When Nike kicks hit deep disco , however, the odds of that spurring increased sales is heavily dependent upon exactly what shoe it is. The aforementioned Chucks will continue to sit even at a rock bottom price of $30 , because buyers have all seen the shoe in stores for $25 or less somewhere Those Olive Uptowns continue sit at $60 , people because know it can be had at the same price or less on eBay, deadstock. Those 2015 ‘Tin Man’ SB Dunks, however , would sell through at the same price, because for that style and colorway, $60 is fair.
A House full of Orange boxes
In actuality , the Nike Brand (not just the company) could easily be a bigger, more diverse cult than its subsidiary. Barring the hundreds of non-sneakerhead-significant silos the Swoosh markets , it still has hundreds of styles – and multiple colorways thereof – buyers would love to add to personal collection, if they could do so without having to hem and haw over pricing.
It’s a question of volume versus MSRP.
The Jordan section of men’s Sneakers on NDC is absolutely tiny compared to Nike’s, with less than 100 styles listed, only a fraction of that number retro styles. That’s nothing compared to the over 1,000 options from Nike, the majority of those shoes considered lifestyle shoes.
In a perfect world, most regular Nike buyers would have closets full of Prestos, Air Maxes, Forces, plus a number of the Premium Nikelab gems, and even a few ID creations. True connoisseurs (of which there would be many) would own lots of even the most out there styles.
The magical 40%
The reason the above fantasy would happen would be because in said fantasy world, Nike shoes would retail for forty percent less than their current retail prices. Those $40 Chuck’s would be retailing for $30 or less. General release AF 1s would sell for $60 in stores, and, in the event of a sell-through, would be worth $100 at resale, which is about the most buyers want to pay for them anyway. Nike would sell far more by selling for far less.
Alas, all of that is just a dream at the moment. Like JB , the Swoosh is content to use big releases to keep hype alive, using drops like the Atmos or Master AM 1s to get buyers chasing Grails, all while it’s sportswear division as a whole performs only moderately well.
Even though this cheap trick is showing diminished returns, it is still working just well enough to seem viable in the short term. But with an increasing number of not only GR classics, but Premium, high-end Nike product ending up in off-price discount stores at half the box price or less,plus deadstock pairs of just-released styles being sold on eBay for a fraction less than retail , the market is slowly devaluing Nike product. The veil is quietly being lifted on the Swoosh mystique.
This is how a dope colorway of a themed release (the shoe is nicknamed after a legendary skater’s den) at the budget price of $75 ends up as sitting: it can be had for less on eBay.
Buyers are fast learning that a good number of those Nike kicks are, believe it or not, not worth but a fraction of their MSRP. The aftermarket knows the Emperor (Nike) is, in fact, buck naked.
Those Pink Motel Bruins can be found here.
Many Kobe buyers likely feel that the 9 Elite was the last of the really relevant Black Mamba signature styles, as StockX data shows.
Nevertheless, even rare colorways of that shoe like the Moonwalker 9 Elite Low are met with buyers hesitant to pay even $40 over its (then) retail price of $200. This shows, once again, that the market has never accepted such prices as valid for that style as a GR, even while the hyper-limited HTM colorways have maintained Grail status.
At this point, a growing number of buyers are beginning to question the validity of continued Kobe drops altogether, despite a $40 MSRP reduction.
The White Gum Kobe AD (Summer) can be found here in many sizes.
First things first:
The Crazy Explosive Low amd Dame 3 West Campus are both available here and here (the former has sold out of a few sizes). Adi has yet to figure out how to make its Boost-based hoops kicks sneakerhead relevant, even in a laughably depressed market for signature basketball shoes.
Adidas AW Bball
But if the Three Stripes plays the incredibly strong hand it has been dealt by designer extraoirdinaire, Alexander Wang, via the two colorways of Wang’s incredible new AW BBall silhouette, adidas can not only change the destiny of its own hoops division, but spark a massive shift in the landscape of sneakers, period.
As I’d mentioned earlier , adidas has over the past year and one-half thoroughly improved its perception in the eyes of sneaker buyers. The Three Stripes is now solidly viewed as the New Cool guys, the manufacturer with it’s ear and eyes on the streets of the world’s fashion capitals, paying close attention to the needs of an increasingly style conscious youth.
According to a recent report, the best-selling sneaker of 2016 was the Superstar, a fact that shows that, even apart from its Boost shoes, Adi is now the place the trendy set is looking to complete its casual, street-ready looks.
It’s been years since ballers have been the ones average folks take their style cues from, something Jordan learning with its Westbrook lifestyle shoe. Sure, the 2017 NBA MVP candidate has got a unique sense of style, but, seriously, nobody really wants dress like that dude.
That being said, the high topped basketball silhouette is still a big part of sneakers and, naturally, street style. At this moment in time, though, the basketball shoe market this is in limbo. Nike still has the most prominent place within that space, but given its pricing issues (see above) relative to the salience of its hoops shoes, it is fast losing traction there.
Jordan Brand moves tons of classic basketball sneakers, but as we all know, the majority are blasts from the past. The fact that the player who had one of the greatest individual NBA seasons ever is a JB athlete who cannot move non-retro Jordan product is the clearest indictment on the Brand’s marketing strategy. It shows that, for MJ, the present is not as important his own glory days (a subject that has been addressed here).
For Adidas, meanwhile, its resurrection has been via a running shoe (UB) , and lifestyle one (NMD). Its small roster of signature , Boost infused hoops kicks, however, have been easily overshadowed by Swoosh / Jumpman styles, mostly because Hardens, Dames, and Crazy Explosive Lows are relatively new silos, the players attached to them have yet to reach elite status, and they’re not exactly dirt cheap.
On April 1st ,2017, Mr. Wang essentially gifted adidas with precisely the shoe it needed: a modern hoops silo with plain-to-see classic, retro DNA.
It is quite obvious the AW BBall took strong cues from classic three Stripes silos of the ’80s , and added sleek , cheeky, choices for the upper via its leather panels and funky lacing system, the perfect combination of fashion, and, potentially, performance.
It is unclear as of this writing whether or not the initial BBall construction is meant as a serious hoops shoe , but, in my opinion, it very well could be. If adidas honchos have gleaned what those (such as myself) with a keen eye can see , this silhouette could very well represent the future of its hoops division; you heard it here first.
Anyway, as is almost always the case nowadays, the Adi collab sold out of both colorways instantly at its $260 Elite price point, and has resold for between $350-$400 in moderate volume.
The BBall was joined by another amazing new Wang creation, the AW Skate, a moccasin-like shoe in an all-suede upper and eye-catching ,three-toned, herringbone ( tire tread) midsole. Priced at $180 box, the two colorways of this snazzy silo also disappeared fast, and have since fetched price s between $250-$300.
Adi at the crossroads
For all the excitement adidas is generating in sneakers right now, it isn’t dominating the game as much as its weekly sell-outs would have some believe.
We are nearly a third of the way through 2017, the second year of adidas dominating the most exciting stories in sneakers. The Three Stripes has pretty much continued the path it established in 2016 without missing beat, with an everything limited / impossible-to-cop strategy still the order of the day.
That’s all well and good; it really is.
If one big criticism can be levelled at adidas, though , it is that it’s not doing enough with its newfound clout to take the game to Swoosh by raising it’s production levels to something even remotely in the region of Nike and Jordan.
By keeping its runs of UBS, and NMDs at laughably low production levels, Adi ensures that the value of its products stays inflated , but who knows how long that will last.
Moreover, as it stands, Adi will never convert Nike/Jordan buyers who refuse to chase yet another brand’s limited product as they have for years with retros and Nike Basketball heat; it needs to open things up.
adidas seems to lack the vision to really parlay it’s amazing designs and concepts into product that truly sweeps in and takes over the game like MJ in crunch time.
So it would actually be a surprise if anyone at adidas sees the future of its entire basketball division within a shoe like the AW BBall; there’s been little precedent for that sort of big thinking from the brand.
At the moment the BBall will fall in line with the rest of the monster three stripes collabs , and retire into life as a semi- elite priced grail.
That would be a noble-yet-wasteful fate for that silhouette. If, somehow, adidas did ever get how to grow it’s market share effectively within the next few months, things could get very very exciting and competitive again in Sneakers.
The Other Brands At the Crossroads
There is an interesting method to the madness of buying sneakers which involves a mental check-down of which shoes are more and less important to buy, or attempt to buy.
Shoes from the Big Three are considered first , because those brands produce the most, advertise the most, endorse the most big events, and the most recognizable personalities.
The Big Brands are generally more significant, because they’re bigger, and crowd the smaller fish out of stores.
Smaller atheltic footwear makers must, therefore, stamp their logos firmly in the niche markets in order to sell kicks that realistically compete with the product of the juggernauts for attention.
Brands like Asics ( a brand that kinda, sorta had a lot to do with Nike’s own history ) have sneakerhead styles that come from its classic catalog : Gel 3s and V’s, often times in collaboration with various streetwear boutiques around the world.
This strategy has made perfect sense for a brand that is genuinely as much about the hardcore running game as it is the die-hard sneakergame. Hence , one is as likely to see a lively aftermarket for gel Kayanos and Kinseis as one is the $193 dollar Vanda Kuro pack of Gel Lyte 3s classics.
Does that make them irrelevant?
That is one of the big questions facing the other brands at the crossroads:
- are their collectibles classics worth the effort of collecting?
- Does the limited, premium-priced angle work anymore for shoes with a built-in tendency to become illiquid once they’re copped?
- Does their retail performance even matter, since sneakerhead kicks are not necessarily even a major focus of the other brands’ marketing?
Does the fact that the Beams x NB 998 is virtually MIA answer the above questions?
Probably not; Google Translate does make the Beams homepage legible in English, and Google search tells us that 32,000 JPY equals about $292 bucks .
The Cow Suit pack from Puma with New Jersey’s Packer Shoes did drop at the weekend (the Red & Black ones, at least), and are still available in most sizes.
There are, nevertheless, listings for the shoes on eBay, almost all of the sellers pros with pairs on offer for retail or less.
Rather than this being the basis for ridicule, their presence in the aftermarket means that there is a decent chance folks will, at some point, see the shoes and contemplate a cop, when the odds of people checking back for the shoes via Packer’s website is slim. eBay does provide that service.
There are, quite simply , too many sneakers being released to the market , and – barring Chuck’s and Vans- they’re pretty much all overpriced.
In many cases , a lot of the shoes still sell through due to the lure of limited edition marketing (and the profit potential some see or think they see in that) , while others get bought because they look nice , the price is fair, and, damnit, people just want ’em.
But when every brand large and small is asking $80-$120 on average for a pair of GRs, buyers tend to choose what they buy more wisely -they buy less.
As a result of this conservativism, more buyers focus on only the most popular silos and colorway releases, hence sticking to the big brands by default, as well as the major retailers.
The sneaker game becomes constricted as a result.
This makes price points the focal point of any sort of realistic discussion of bringing a higher level of liquidity to the sneaker retail market. Nike and Jordan slashing the prices of their already overpriced product is not really doing the market a solid, but merely correcting it to the price it should’ve been in the first place. This ‘correction’ also usually comes long after a shoe has been deemed dead by the marketplace.
If and when Air Force 1s start retailing for $60, and those numerous retro 1 Mids with the easy-crease toe boxes have an MSRP no higher than $100 , one will know that Nike and Jordan are serious about righting their marketing ships for real.
If and when adidas finally decides that is has what it takes to assert itself more aggressively within the sneaker market with wider drops for its premium shoes, that could be the catalyst for a seismic shift in the landscape of athletic footwear.
For now, the world waits……