#17 - "The One About Sneakers"
This past weekend saw Nike and Jordan Brand re-release the Air Jordan 4 “Bred” (black + red = bred). You’ve seen this shoe before.
Michael Jordan wore the Air Jordan 4 “Bred” on May 7, 1989 during Game 5 of the 1989 Eastern Conference playoffs when he single-handedly added to the City of Cleveland’s sports depression— That ain’t hyperbole by the way, they made a 30 for 30 about it — and the shoes are definitely iconic for a certain segment of the population. The format seems simple — supply something people demand — but it caught me this past weekend that I’ve been buying sneakers for years and haven’t ever really thought about the business of the shoes I wear. I started doing research and that research led me to a book called “Nike’s Consumer Direct Offense, Amazon & StockX: The Disruption of Sneaker Retail” and its author, Chris Burns.
Chris’s experience with this industry isn’t just anecdotal, he legit created and sold his own shoes — While reading the book, I legitimately said out loud “Wait, you can just MAKE a shoe?” — before moving into the third-party resale business and creating a blog around his work covering this industry in addition to writing this self-published book. I reached out to him because he knows his shit. Hopefully, this conversation will provide some insight into the business so you get a sense of the business behind sneakerhead culture.
As a guy who loves sneakers, it feels like the industry isn’t something I truly understand. It feels like in a really weird space as a business opportunity because the whole thing seems to be a very insulated culture but also one that appeals globally. What do you think us business types are missing from the larger conversation around sneakers and retail?
Excellent question!!! See those exclamation points? It's a great question because you're asking about something my partner Tayib and I began working on in 2015. What we wanted was a small network that worked as a counter to the sneaker media and lifestyle sites that had gained so much popularity. While those sites focus on hype, fashion and less in-depth articles, I felt that the sneaker community was very insular and self contained like you said. If you weren't on Niketalk or classic sneaker message boards in the beginning of the 2000s, then people don't really respect who you are and you can't be a part of the conversation. The problem is that type of thinking left a guy like me out, although I embodied everything people wanted to be in sneakers. I didn't just buy the hyped Jordan, I drew my own sneaker and then I made the sneaker. When you ask what's missing, the answer is a business-like approach to the industry that a 18-year-old or a 59-year-old can read and learn from. What's missing is a willingness to educate people about the sneaker industry from people actively involved in the industry as analysts and sellers.
Let’s talk about the Swoosh for a sec. As a content creator, I still believe the reason Nike holds such an advantage in the overall sneaker retail market has been because of their embracing content strategy way back before that phrase was a thing. Their investments into high-level content around their stable of athletes and personalities — everything from their internet-breaking videos to subtle concepts like HBO’s The Shop (I don’t think it’s a coincidence a majority of all the athletes on the show are all repped by Nike) — it really feels like Nike decided awhile ago to become a media company that sells athletic apparel and not the other way around.
In your book, it feels like you agree with my loose thinking and lay it out pretty clearly that owning content creation has been an intentional move: “Nike understands the importance of content creation for the next generation of sneaker consumers. This is why they paid Ronaldo so much money. This is why Nike is the only major sneaker company to actively launch several Content Management System-based websites like SNKRS and Air.Jordan.com.” What do you see as the future for sneaker brands making content?
…Do you know in the time since I finished the book that almost every brand in the space has launched some form of CMS? When I wrote in the book that every brand has to be a media company, I meant that. I didn't just say brands however... any business has to be a media company. As far as sneaker brands and content, the future is a three pronged attack of vlog, blog and social that doesn't give away so much to social media. As far as content, brands need to create their own ecosystems for their content where the potential customer consumes content on their channel and they are able to purchase within that channel. Everyone understands the social aspect, but neither brands or retailers understand the gravity and importance of search. The future is actually the past. While the world is excited about Instagram shopping and hitting the consumer where they are, the world was excited about Facebook shopping a few years back and what happened there? When a brand or company gives away their power to third party they are creating a slow road to a loss in margins. What's more important is that the brands and retailers are giving away their power. My entire goal now is to gain a higher ranking in search. I understand that the majority of traffic to a website is from direct and search. I don't think brands understand this completely, but they are beginning to get it. Nike has already shown they understand this. Inside of their digital apps they earn 3X as much per customer. Nike has chosen an approach that gives their brand a perceived authenticity because of their investment into content. Nike has long been an advertising company, everyone else is catching up, but they aren't there yet.
What’s your advice to sneakerheads who want to make a go of the retail game?
This should be a two-part answer. Before last week, I would have said go for it. After speaking at the Footwear Innovation Summit and seeing so much information on sustainability and how much waste we are creating in the footwear and apparel space, I can’t say go for it anymore.
If a person still wants to open a store, I'd say they have to be more than a sneaker store. Wherever you set up shop, become a community hub. If your goal is to open a retail shop and all you're going to do is sell kicks if there isn't anything that makes your space different, don't do it. The only people who can open a spot and just be a sneaker shop are the people who are getting the hottest shoes in the business. Acquiring those shoes is difficult and honestly it doesn't sustain because the market is tough and the amount of overhead to insure a place with all Yeezy and limited drops is insane. If you are going to jump into retail conquer your region. Make your shop about the brands and people who are where you are. Make it about the brands you carry and you might have a chance.
Share one fact you think Office Hours readers might not know.
I have two thesis projects in the San Diego State University Library. My own thesis and a thesis I co-authored with a fellow graduate student.
Got anything to promote?
Always. Please visit AHN and Housakicks.com. We are creating two of the best business centered websites around the sneaker industry with video and analysis. I also have my book Nike's Consumer Direct Offense, Amazon and StockX: The Disruption of Sneaker Retail. The book isn't just for those interested in sneakers, it's a business book and I actually deliver a lot of personal information about actually working in the sneaker third party sales industry. I've written 8 books that are available on Amazon, every genre from poetry to fiction and non-fiction.
YOUR HOMEWORK FOR THE WEEK:
Subscribe to the Office Hours podcast on Spotify or Apple Podcasts.
NEW FRANK OCEAN INTERVIEW. ‘Nuff Said. (Shout out to buddy who made this fake Frank Ocean’s “Nikes” ad in the style of classic Nike ads on Reddit!)
TUNES:
106.9 WQRL - TBD 90’s/2000’s — Officially back on my playlist bullshit! The radio station in my head has a new playlist of undeniable 90s and early 2000s R&B classics. I don’t have a name for it yet, but it’s definitely a great playlist to work to. Listen on Spotify and Apple Music.
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