COVID-19 Response: Sneakers Hit High Note Online
Sneakers are on a fast track.
“One week in April we saw a 105 percent increase in the sneaker category. People decided they should probably get off the couch and do something,” said Jaime Kingston, commercial lead for Klarna, a shopping site offering installment payments.
Since June, Klarna has seen a 37 percent “off the charts” increase in sneakers and ath-leisure, said Kingston. “On wish lists, the two most popular items are sneakers and earpods.”
Kingston was part of a panel discussing consumer spending patterns Wednesday at the Footwear News two-day virtual conference, themed “The Way Ahead.”
Damien Leigh, senior vice president of global direct-to-consumer at New Balance, and Tom Woodger, vice president of cultural marketing for StockX, were also on the panel.
Klarna, which translates to “smooth shopping” in Swedish, is a shopping site with an extensive array of hard and soft goods from stores and brands that enables shoppers to pay in four installments and receive alerts when products reduce their prices.
“Consumers are demanding even more flexibility on how and when they shop, new channels and payment options,” said Kingston. “Buy now, pay later was growing at a pretty quick speed before COVID-19 hit. Now we are really seeing shoppers wanting to spread their spending over time. In the U.S., over 8 million shoppers are using the Klarna network. It will dramatically increase over the next few months and next year.”
Despite the surge in online shopping, Kingston said that only 9 percent of online shoppers think it’s fun. “We want to find a way to make that experience more fun for them and help our retail partners move their product shopping experience.”
StockX is often viewed as a stock market for stuff, mostly sneakers, streetwear, collectibles, accessories and watches. It operates as an online marketplace for auctioning products. Sellers send purchased items to StockX facilities for inspection and authentication in Detroit. Authenticated products are shipped to buyers, and any fakes are shipped back to sellers. StockX charges a 3 percent processing fee for resellers, and a 9.5 percent transaction fee for new users, which decreases with experience.
StockX has experienced “insane growth,” said Woodger. “It’s hard to keep up with the demand.”
He said StockX provides “great true insight into the value of the product you’re buying…It’s a more seamless experience providing products at the most transparent price.”
StockX’ physical dropoff sites for products in Atlanta, Chicago, New York, Los Angeles, London and other locations in Europe closed once COVID-19 hit. “We haven’t felt comfortable going back to that. The number of locations were good but not material. We will open more locations in the future.” Woodger also cited possibly opening physical sites for buying products, though that’s not in the current planning.
The lynchpin and foundation of StockX “is the authentication being a seamless experience” and instilling in the consumer space that we are a safe place to come,” where buyers don’t get stuck with fakes, said Woodger.
Citing five sneaker trends, Woodger said collaboration products are always in demand, while brands with sustainable products are gaining traction. He also cited technical and performance products, luxury, and DIY. Instagram and Google are the two biggest selling channels for StockX.
“We’ve seen absolute extraordinary explosive changes in year-over-year growth rate on e-commerce as well as the penetration in our overall business,” said Leigh from New Balance. “You’ve got a very savvy and digital consumer. Asia and Europe are growing at just incredible paces as well. For us, e-commerce is just critically important because we can control the experience from beginning to end and from a financial experience, we are paid immediately. We are able to control pricing, brand and experience. It allows us to really control our destiny, as our ceo would say.”
Whether it’s wholesaling, retailing or e-commerce, “I don’t think there is going to be an overall reliance on any one channel. Ultimately wherever our brand is we want it to look great. Traditional wholesale partners are a critical part of our existing business and future growth. How our brand shows up on their properties is equally important.”
He characterized New Balance as being “steeped in authentic history” and cited its emphasis on craftsmanship, sustainability, and significant investment in fit and odd sizes. “We believe we have found that consumer group our brand will resonate with.”
In terms of selling trends, performance/running styles “go well beyond footwear and into our apparel business as well,” said Leigh.
“If you can develop and market unique, really cool lifestyle merchandise, it is amazing how big that market is. We see [positive] trends in both our running and lifestyle categories which for us is great because that is the bread and butter of our business.”
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