Image Via decadefootwear
“Sneakerheads are a deeply committed community of collectors and aficionados. Sneakerheads do not represent a major portion of sneaker sales. Sneakerheads create a lot of hype and buzz that can be good for brand equity, but this brand equity is difficult, if not impossible to measure. Within the echo chamber, the voices of sneakerheads are loud, but those voices do not carry.”
This, the conclusion of Matt Powell who just wrote an article for Forbes titled “Sneakernomics: Are Sneakerheads important?”
In the article Powell covers: The “definition” of a Sneakerhead, the history, Internet Influence, Resellers, Financial Impact and Non-Financial influence all of which led to his conclusion.
Lets tackle first, the “definition” of a Sneakerhead. Ask a bunch of 13 year old’s that own more than one pair of sneakers and I’m sure you’ll get the same answer, I’m a Sneakerhead. In reality its tougher to define than the article implies. Powell defines a Sneakerhead as:
“a person who collects trades and/or admires sneakers as a form of hobby. Sneakerheads, like most collectors, are passionate and dedicated to their subject. Many are very knowledgeable about the origins and history of sneakers. Many spend a great deal of time and money studying the category and its past, while building their collections.”
there’s a problem with this though. There are many many MANY individuals both old and young that are casual consumers that don’t really collect, trade or admire sneakers as a form of hobby yet just the same, consider themselves Sneakerheads. Sure, someone in the know would easily be able to distinguish this individual from someone a little more hardcore, but to lump most under one definition is assuming and incorrect. However, lets say, (for argument sake) that we are only talking about individuals on the internet and only die hard collectors (we won’t count the “wannabee’s” whoever they may be) and lets jump to the financial impact portion of the article.
Powell looks at “sales of shoes that Sneakerheads are interested in” and makes an estimate based on a subsidiary. He states that “Jordan brand shoe sales at retail last year in the US were about $2.5 billion” (keep in mind this number does NOT include Nike which sells wayyyyyyyy more retro or retro inspired product than Brand Jordan) and says:
“Sneakerheads disdain, for the most part, non-retro Jordan’s”
which is not completely true. Going back to the “definition” this is where things seem to be misunderstood. Anyhow, according to the article
“about half of the Jordan sales last year were retro, or about $1.2 billion”
(I’m willing to bet its a little more than that). Keeping in line with the article,
“Marquee basketball shoes (endorsed by elite players) were about $500 million all in”
which sounds about right.
“Collaborations are very limited in terms of the number of pairs available, and even if all combined do not amount to much in sales”
which is also correct.
“All in, Jordan, Retro, Marquee basketball and collaborations combined were worth $1.75 billion at retail last year in the US. Of course, we cannot assume that every one of these shoes went to a sneakerhead. So let’s say sneakerhead sales were $1.1 billion last year.”
Ok.
“Total sales of sport footwear in the US last year were $22 billion. This makes the sneakerhead portion about 5% of the total US business.”
Hold the phone there.
First, the article appears to be implying that Sneakerheads only or mostly, collect Jordan’s which is incorrect. Secondly, according to the NPD Group, footwear sales for 2013 (NOT including athletic or sport footwear) generated revenue of $41.52 billion. This segment includes: Casual, Sport Leisure, Dress and Outdoor with casual and sport leisure (according to the NPD) making up more than 64% of that $41.52 billion (or $26.57 billion). Although athletes sometimes play in retro product, retro’s fall in the casual/sport leisure segment not sport footwear.
Now, consider that the two top dogs; Nike’s revenue for 2013 was $25.3 billion (Nike,Inc) and Adidas $14.49 billion (market watch) for a combined $39.8 billion (keep in mind we aren’t even talking about brands like Asics, New Balance, Saucony or even smaller companies like Ewing Athletics or Gourmet Footwear). Now lets say for argument sake, that about 20% of each companies revenue (Adidas and Nike) is from the sale of retro product (even though Powell came up with an approximate 50% for Brand Jordan). That would be $5.06 billion in sales from Nike and $2.898 billion in sales for Adidas Group totaling $7.958 billion in retro product just from these two companies. That makes up nearly one third of all casual and sport leisure revenue and more than likely half of what sport footwear generates as a category in the industry.
The sneaker community’s reach doesn’t end with sneakers either. There is the fashion industry (and we aren’t just talking sportswear companies like Nike) we’re talking Ralph Lauren (remember that 65% employee discount leak from sneakerheads and posted on sneaker forums?), Louis Vuitton, Versace etc. Then there’s the influence in music because you see, everything overlaps. Sneakerheads have other interests outside of sneakers and we aren’t going to even mention those potential numbers.
He goes on to say that “the sneakerhead ‘press’ has little influence outside the sneakerhead community” which is also incorrect. If that were the case do you really believe the chaos for the Nike Foamposite Galaxy would have ensued? No, its because of the “sneakerhead press” that you have malls and sneaker stores turning into war zones where in a few cities the local government was forced to call in the national guard for a SNEAKER RELEASE. If it weren’t for sneaker sites building hype, the hype wouldn’t be this intense.
Ahhh but here is where Powell nails things on the head.
“All live in fear of offending the brands that they depend on to keep them fed with pictures and information about upcoming releases. In the Sneakerhead press, there is very little original content and frequent cut-and-pasting of content from other sources. Because the Sneakerhead media is unwilling or unable to speak the truth to power, their influence is very limited, except inside the echo chamber that is sneaker culture.”
Yes, many sites live in fear of offending brands and use the frequent cut and paste method of content from other sources but not all. It is also true that many in the Sneakerhead media are unwilling or unable to speak the truth but that problem isn’t reserved just for the Sneakerhead media and therefore shouldn’t discredit Sneakerhead media outlets.
So, in response to Matt Powell’s article:
Its pretty safe to say that Sneakerheads more than likely represent a large and increasing portion of sneaker sales. In addition, with many celebrities aligning themselves to the sneaker community in an attempt to stay relevant, Sneakerheads voices not only carry but also dead lift, bench press and squat.