Scaling Sneaker Culture: Consequences & Impact

StockX and the Concept of Access

StockX defines its core purpose as providing access to highly sought-after products through an intelligent platform. This claim, prominently displayed on their website, is demonstrably true; the extensive data StockX freely provides empowers informed engagement within the sneaker market.

However, a critical question arises: who precisely benefits from this “smartest” participation?

The Pitfalls of "Access" as Marketing

The term “access” is frequently employed as marketing rhetoric, and the notion of democratization is often applied to formerly exclusive domains, spaces that historically marginalized certain communities.

It has become commonplace for brands to promote representation and inclusivity in advertising while simultaneously failing to address internal issues of inequity. A recent example includes Adidas, whose diverse campaign imagery coincided with accusations of racism and biased hiring practices.

Redefining "Smartest"

The descriptor “smartest” could arguably be replaced with “simplest,” or at least used in conjunction with it, for greater accuracy.

Users are not required to possess knowledge of a shoe’s technical features, the characteristics of counterfeit products, or even the product’s history and release schedule. StockX’s data primarily provides market intelligence.

Access is therefore granted to anyone with internet connectivity and sufficient funds to make a financially sound purchase.

A Shift in Power Dynamics

While StockX’s approach does, to some degree, bypass traditional gatekeeping and opaque transactions, this has resulted in a transfer of access.

Specifically, access has shifted from thriving local markets, independent retailers, and small businesses to individuals and entities with greater financial resources.

Ultimately, the access to coveted items facilitated by StockX functions more as a premium privilege than a genuine democratization of opportunity.

The Complex Relationship Between Users and StockX

Around 2011, while attending college, Andrew Zachau made the decision to divest from his sneaker collection. At that time, eBay represented the primary avenue for resale, requiring significant effort to determine appropriate pricing due to the absence of a consolidated data source for the secondary sneaker market.

“Determining a price involved researching the shoe’s listings on eBay, observing both asking prices and completed auction results. This process was how I established a fair market value,” Zachau explains. “StockX has undeniably streamlined this process considerably.”

Currently 27 years old and based in Chicago, Zachau continues to primarily utilize eBay for reselling, leveraging the established reputation he cultivated over years on the platform. However, he integrates StockX into his workflow. “When preparing to list an item on eBay, I consult StockX to ascertain the current market price and position my listing competitively within that range.”

Although he refrains from purchasing through StockX – preferring to avoid retail pricing and reliance on their authentication procedures – Zachau acknowledges the platform’s inherent value. “Prior to StockX, the sneaker resale landscape was largely unregulated. Sellers could dictate prices without a common benchmark.” He reflects, “Previously, if I were negotiating the purchase of a pair of shoes offered at $450, I lacked the ability to reference StockX and demonstrate a $350 listing elsewhere.”

Zachau does occasionally leverage StockX for sales, particularly when a swift transaction is desired. The platform’s bid/ask model, where buyers submit bids and sellers list asking prices, facilitates rapid sales. Essentially, potential buyers are readily available. “The process is remarkably efficient – a single click and the item is sold.”

Despite recognizing the opportunities created by the expanding sneaker market, Zachau, like many long-time sneaker enthusiasts, voices concerns regarding StockX’s market dominance. “StockX’s ease of resale has opened the market to individuals without a genuine passion for sneakers. Resellers can identify profitable items simply by checking resale values on StockX and pursuing them at release,” he observes.

The platform’s one-click buying and selling, combined with authentication services, real-time pricing, data transparency, and transaction anonymity, provides a low-barrier entry point into the secondary sneaker market that was previously unavailable. However, this accessibility and ease of participation also contribute to a dilution of sneaker culture itself.

Sneaker Culture and its Transformation

A 15-year-old entrepreneur was featured by Business Insider in 2019, detailing how he funded his sneaker resale venture through lawn care services. He has since prioritized his education and business development, ultimately achieving six-figure revenues in the past year.

According to his account, the consistent demand for footwear, coupled with a willingness among consumers to spend substantial sums, creates a favorable market. Success, he believes, hinges on acquiring desirable items and cultivating strong relationships within the industry, alongside a thorough understanding of market dynamics. His goal is to leverage these accumulated savings and skills into the realm of real estate.

Stories of youthful entrepreneurial success, akin to a modern-day paper route, are increasingly common, yet have also sparked controversy. Joe Hebert, aged 19, established a sneaker reselling business generating $200,000 in monthly revenue, peaking at $600,000 in May 2020, as reported by Bloomberg Businessweek.

The Bloomberg profile highlighted impressive financial figures, but these were overshadowed by revelations regarding Hebert’s access to discounted shoes. This access stemmed from his mother, Ann Hebert, who held a 25-year position at Nike, most recently as vice president and general manager of Nike North America.

Concerns were raised about whether her high-ranking position provided her son with preferential access to limited-edition releases. Her Nike affiliation remained largely unscrutinized until the publication of the Bloomberg story, which ultimately led to her resignation.

The Evolution of Sneaker Significance

The contemporary hype surrounding sneakers traces its origins back to the narratives of hip-hop culture and the introduction of the Air Jordan 1 by Nike and Michael Jordan. Approximately four decades and billions of dollars later, the meaning associated with sneakers has undergone a significant shift compared to the mid-1980s.

Jazerai Allen-Lord, founder of the branding agency True To Size, observes a key difference: “Shoes once functioned as a clear indicator of identity. While they still serve that purpose, the nature of that indication has changed.” She has extensive experience within the sneaker market, including roles at KicksOnFire.com and leading brand activations for New Balance, and even possesses her own Reebok sneaker design.

She explains that owning brands like Off-White now primarily signifies affluence and status. The emphasis has moved away from personal storytelling. The presence of an orange zip tie simply denotes access – either through connections or financial means to purchase at resale – and reveals little else about the individual wearing the shoes.

Prior to the widespread influence of platforms like Instagram, sneakers served as a means of expressing a wearer’s unique story. Regional sneaker trends have become homogenized.

Allen-Lord elaborates: “If someone favored New Balance, they were typically drawn to all running shoes and were likely part of the ‘trainer community’ – the dedicated running shoe enthusiasts in the U.K. This also included brands like Asics, Air Max, Diadora, and Saucony.” She continues, “Jordan enthusiasts were specifically devoted to Jordan retros, often exclusively wearing models from 1 to 13.”

Growing up in Southern California, Allen-Lord developed a passion for Nike SB Dunks. “Before 2010, the SB community was a distinct group, united by a shared appreciation for the rich storytelling and multifaceted aspects of skate culture.” She notes that one could gauge a collector’s experience simply by observing the colors of the boxes in their photographs.

“An affinity for SBs typically indicated an appreciation for underground hip-hop – given the frequent collaborations – a diverse sneaker collection beyond Jordan Brand, and a keen eye for the details that defined a great sneaker, such as materials and packaging.” This connection differs greatly from a young person discovering the shoes through influencers like Travis Scott or Kylie Jenner in 2020 and immediately seeking them on StockX.

The Freedom to Choose: Women's Place in Sneaker Culture

Similar to many historically male-dominated industries, the inclusion of women is often an afterthought, frequently perceived as a challenge for others to address. The sneaker industry is demonstrably no different. Despite increasing data indicating a growing female interest in sneakers, Josh Luber, formerly of StockX, expressed skepticism in 2018 to The Snobette, a women’s sneaker and streetwear blog. He questioned the practicality of a women’s-exclusive launch, even a year after Jordan Brand established its dedicated women’s division.

While women-only releases are now becoming more commonplace, broader acceptance and understanding remain incomplete outside of these specific initiatives.

A History of Overlooked Potential

Addressing gender imbalances within the sneaker world is not a novel undertaking. Nike began actively targeting female consumers in the 1990s. Reebok also achieved significant success by focusing on women through fitness-oriented marketing, particularly during the aerobics craze of the 1980s.

However, it wasn’t until after the release of Nike’s critically acclaimed “Dream Crazier” advertisement in 2019 that the company implemented a new maternity policy. This policy guaranteed full pay and bonuses for its sponsored female athletes, a change prompted by substantial public pressure.

Data and Demand: A Clear Signal

StockX provides concrete evidence of the demand for women’s products, with transaction volume increasing by 1,500% since 2016. This data is invaluable for manufacturers to observe.

However, it’s crucial to recognize that this surge in demand isn’t a result of StockX’s efforts, but rather a consequence of an underserved community gaining access to products specifically designed for them.

A Lack of Understanding Persists

In that same 2018 interview, Luber also stated that major brands hadn’t yet determined effective strategies for marketing to women. This apparent disconnect with female consumers extends beyond StockX and the brands of 2018, continuing to be evident today.

This disinterest manifested in the creation of Hypebae by media company Hypebeast. They found themselves unable to integrate women’s stories into the existing Hypebeast platform.

Given the historical lack of representation and storytelling surrounding women in sneakers, both in terms of their participation and specific product offerings, it’s unsurprising that Hypebeast characterized a women’s-only release as “unfortunate” in December 2020.

The Role of Exclusivity in Sneaker Culture

The increasing commercialization of sneakers, coupled with the rise of social media, has led to many significant narratives within the culture being overlooked. This is due, in part, to media outlets focused on generating hype and the limitations of social media algorithms.

Concerns regarding the changing nature of sneaker culture have been voiced by long-time enthusiasts. Angel Diaz of Complex Media, for example, argued in 2018 that the gentrification of the sneaker world was detrimental to its core values.

He noted the presence of individuals in long lines who have no intention of actually wearing the sneakers they are acquiring, highlighting a shift in the community’s focus.

Despite a broader evolution in media away from clickbait listicles, sneaker-focused publications have limited incentive to broaden their coverage. The introduction of live stock tracking for resale markets has further concentrated attention on financial aspects.

A significant portion of Complex Media’s popular sneaker content – including the “Full Sized Run” and “Sneaker Shopping” YouTube series, and their podcast – relies heavily on a small group of hosts. Specifically, three white men in their thirties dominate the perspectives offered to Complex’s large audience.

StockX recognizes its position within the sneaker and streetwear landscape. While lacking external accountability, the company has expressed a commitment to amplifying the stories of founders and key figures from the communities that shaped the culture.

As Tom Woodger, VP of Global Cultural Marketing at StockX, explains, the platform aims to acknowledge the contributions of those who were instrumental in building the culture, even before StockX’s emergence.

“We consistently prioritize honoring the cultural origins and directing the reach of our platform to support the individuals who were foundational to sneaker culture,” Woodger states.

StockX points to collaborations with Chris Gibbs of Union LA, as well as designers Melody Ehsani and Angelo Baque of Awake NY, as examples of this commitment.

“Our approach isn’t simply about StockX as a new platform; it’s about showing respect to the creators and providing them with the benefits of our platform as a form of gratitude,” Woodger adds.

Understanding the Shift

The evolution of sneaker culture has been marked by a transition from a community-driven passion to a commercially-focused market. This shift has raised questions about authenticity and inclusivity.

• The rise of resale platforms has altered the dynamics of acquiring sneakers.
• Media representation plays a crucial role in shaping perceptions and narratives.
• Acknowledging the contributions of original innovators is essential for preserving the culture’s integrity.

The Rise of Data and Capital in Sneaker Culture

While StockX may present itself as a tribute to sneaker culture, its primary function is to serve as a conduit between the tech industry and those interested in investments and asset acquisition. According to Woodger, the platform appeals to a diverse range of individuals, including “hedge fund professionals who recognize the potential of assets, viewing sneakers, trading cards, and similar items as a novel asset class.”

The company’s evolution has been remarkable, transitioning from a platform that simply consolidated information within a previously fragmented sneaker and streetwear market to a multi-billion dollar enterprise. This growth has been achieved with demonstrable data supporting its value, and has proven resilient even amidst global challenges.

Despite its emphasis on transparency and democratization, the core element of community – the actual sneaker enthusiast base – appears to be largely absent from StockX’s focus. Users browsing the site or app will find limited engagement with the narrative aspects of sneaker culture unless they actively seek it out; the experience is primarily driven by numerical data and monetary values.

Accessibility is certainly increased, but at what price? The commodification of goods represents a capitalist outcome, providing effortless access to a broad audience – even those motivated by the prestige of acquiring sought-after products rather than a genuine passion for sneakers and their associated histories.

Authenticity, representation, and access are crucial components of any successful initiative. StockX acknowledges this principle. However, its exclusive focus on unworn, new sneakers in original packaging means its most valued customers are those engaged in buying and selling these items as investments. This approach overlooks the dedicated collector or the individual who simply enjoys wearing their sneakers, representing a missed opportunity to amplify diverse narratives.

By establishing itself as a significant player in a broader sneaker ecosystem that prioritizes assets over cultural significance, StockX’s trajectory reflects the prevailing trend of technology prioritizing convenience. The rich history, geographical origins, and intricate stories embedded within this culture are simplified and streamlined for commercial purposes. User experience replaces genuine relationships, and the significance of a sneaker is reduced to a single data point on a financial chart. While change is inevitable, particularly with rapid growth and increased global connectivity, it’s still possible to steer progress away from solely resembling gentrification – especially for a company as intelligent and successful as StockX.

This EC-1 report examines the innovative application of free market principles to a subculture that originated with Michael Jordan’s iconic sneakers, initially prohibited by the NBA, and has culminated in a presence at a historic presidential inauguration. A confluence of social media engagement, fundamental economic principles, and a pre-existing black market has created an ecosystem that StockX understands and leverages effectively.

StockX EC-1 Contents

• Part 1: The Origin Story
• Part 2: Authentication in E-commerce
• Part 3: The Competitive Landscape and Consumer Behavior
• Part 4: Future Outlook and Impact

Further insights are available in other EC-1 reports on Extra Crunch.

Updated April 5, 2021: Andrew Zachau’s name has been corrected.