Highsnobiety Q1 is the latest in a series of quarterly insight weeks dedicated to the business behind youth culture and what makes our market tick. Head over to our Insights hub to see the full series.
If you thought sneaker releases were going to slow down any time soon, our Q1 2021 report is here to prove otherwise, and also educate and inform. After a very tough year for most of the world’s industries, it’s still unclear exactly how the Coronavirus pandemic will continue to impact the fashion industry.
E-commerce has seen a huge boom over the past year, with sporting goods benefitting in particular. According to the US Census Bureau, Americans spent $791.7 billion on e-commerce in 2020. That’s 32.4 percent more than 2019’s figure, meaning that e-commerce made up 14 percent of all retail sales (up from 11 percent the previous year).
That boom was reflected in the resell market, too, as StockX reported best-ever numbers at the end of 2020, with huge growth across previously untapped markets. Although the beginning of the pandemic brought predictions of a decline in spending on expensive, aftermarket sneakers, the trends have gone in the opposite direction. All signs point to that upwards trend continuing in 2021.
As we do every quarter, Highsnobiety has teamed up with the data wizards at StockX, who unveiled their own detailed quarterly snapshot, to tell the biggest stories in footwear. During the first three months of 2021, Nike has come out of the starting blocks quicker and harder than any of its competitors. The Swoosh’s quantity and quality approach is very different from adidas’ more measured and diversified release strategy. Central to Nike’s quarter is, unsurprisingly, the Dunk.
Read on for the biggest footwear stories of Q1 2021.
Is Dunk Fatigue Setting in?
We’ll get the question on everyone’s lips out of the way first: Are Dunks still hyped? The short answer is yes and no. The long answer is a little more complicated.
We’ve all seen the Instagram comments complaining about an oversaturation of releases, Nike dropping Dunk Lows colorways like they’re adidas YEEZY Boost 350 V2, and the steadily decreasing resell prices. Highsnobiety wrote about the democratization of the Dunk at length, here.
If your definition of what is hyped and what isn’t is based on the resell value of a sneaker, then the Dunk is still relatively hyped in 2021, generally selling for over two times retail. In this case, relative means that when you compare the Dunk to other brands’ sneaker releases, the model is consistently outperforming or matching some of the most expensive releases. But if you compare the Dunk to itself, you’ll notice steadily falling resell prices.
The Dunk mania reached its peak in Q3 of 2020 when the Chunky Dunky and Travis Scott SB Dunk Lows were released. The average resell price was over $400 at that point, which has nearly halved six months on.
“As you can see, the number of major Dunk releases accelerated in late 2020 and early 2021, while average prices fell considerably,” says StockX chief economist Jesse Einhorn. “Even for a model with as much hype as the Dunk, there is always the peril of oversupply. If Nike continues to ramp up supply, the iron law of resale economics dictates that prices are bound to fall further.”
In summary, Nike is cashing in on the Dunk hype by releasing hordes of new colorways. That, in turn, has democratized the Dunk, making it available to those that may have missed out on some of the more hyped and highly limited releases in 2020. The flood of stock has meant that resell prices have fallen from astronomically high to “just” high. As it stands, there is still more than enough hunger to eat up the more widely available Dunk releases. Over time, though, this is certain to change.
Nike Came Out Swinging in Q1
*Note that these statistics are taken from sneakers that made their way onto StockX and therefore may not be completely representative of the number of sneakers each brand released at retail.*
If it felt like Nike and Jordan Brand were moving at warp speed while all other brands were standing still in Q1, it’s because they basically were. Nike (and, by extension, Jordan Brand) took vastly different approaches to the likes of adidas, New Balance, or ASICS, in that they dropped an absolutely mind-boggling number of sneakers in the first three months of 2021.
Together, Nike and Jordan Brand had over 150 sneaker releases (defined as having at least 100 release-week trades) that landed on StockX. Reebok, adidas, and New Balance together accounted for barely over 50 major releases in the same time span. Part of that will be because Nike is the biggest fish in the sea, so it only stands to reason that the brand would release more sneakers than the rest. But when you look at the sheer amount of sneakers Nike released in Q1, it’s clear that Nike’s output strategy differs from its competitors.
That strategy resulted in Nike’s market share on StockX increasing by 5 percent compared to Q4 2020. In the same time period, Jordan Brand (second-biggest market share on StockX) stayed relatively stable, while adidas’ market share (third biggest on the platform) dropped 3.1 percent. The overall market share rankings didn’t change among the top three; however, StockX confirms that adidas is now only a distant third, following Nike’s Q1 output.
Interestingly, although Nike released far more sneakers than its competitors in Q1, the share of hyped sneakers (defined as sneakers reselling for at least 50 percent over retail) was remarkably high. Around 50 percent of all Nike sneakers that were released in Q1 and were available on StockX have a price premium of 50 percent or more. adidas, New Balance, Reebok, and even Jordan Brand’s share of hyped sneakers was significantly lower, barely scratching 25 percent at Jordan Brand and even lower for the others.
“The preponderance of hype is almost entirely due to the success of Nike Dunks,” explains Einhorn. “Including kids and women’s exclusive releases, Nike released well over 40 different Dunk colorways in Q1; nearly half of those Dunk releases debuted with price premiums of 100 percent or more, with some — like the Supreme SB Dunk collab — boasting four-digit resale values.”
Much of This Is Due to the Dunk
As Einhorn explains above, Nike’s success in the resell market can be traced back to one source: the sustained popularity of the Dunk. When you look at the distribution of Nike’s hype releases, nearly two-thirds are either Dunks or SB Dunks. The other 36 percent are a mix of several other silhouettes. None, however, come close to the domination of the Dunk, a storyline we have become accustomed to over the past 18 months.
The chart above hammers home Nike’s strategy of creating hype around a product or specific type of sneaker with real cultural significance (this is the Dunk’s third golden era, after all), and then cashing in on the hype created carefully over time by slowly opening the floodgates. It’s a tried and proven method, as we’ve seen in the past on a smaller scale with the adidas Originals Yung-1. There, limited edition collaborations made way for general release colorways that performed well because of the built-up hype. Nobody does it quite like/on the same scale as Nike, though.
Diversification Is Key for the Three Stripes
On the flipside, adidas’ distribution of hyped releases tells a totally contrasting story. While having far fewer hyped releases, they are spread across the board and come in all sorts of shapes and colors. adidas doesn’t have a guaranteed sell-out like the Dunk, but it was able to diversify its resell hits better than Nike.
“What Nike has done with their Dunk line would be the envy of any brand. But adidas deserves equal credit for the diversity of their catalog, especially their ability to turn oft-neglected silhouettes — like the ZX and Forum — into certified resale hits,” says Einhorn. “From the adidas ZX and Forum, to the Yeezy 450, 700, and Foam Runner, adidas managed to release over 10 different models with significant price premiums.”
A big part of adidas’ success has been down to the brand’s ability to partner with a wide range of creatives and collaborators. Partners range from Pharrell Williams and Kanye West to Bad Bunny and Jerry Lorenzo, giving adidas reach into varying niches and subcultures. The collaboration with Bad Bunny, in particular, has been a bonafide success. According to Einhorn, the Bad Bunny x adidas Forum Low is the highest-valued adidas release of the past 12 months (minimum 100 release-week trades), making it the most hyped, non-YEEZY adidas sneaker in StockX history.
“The Bad Bunny hype is even more impressive when you consider the silhouette he partnered on,” Einhorn explains. “When Travis collaborates on a $1,000 Jordan 1 — sure, that’s impressive. But it’s a Jordan 1, the most iconic silhouette in sneaker history. You can’t say the deck is stacked against him. But Bad Bunny took an adidas Forum — a silhouette charitably described as obscure, with virtually no resale history whatsoever — and created an $800 release. That’s remarkable. It will be fascinating to see what his partnership with adidas yields in the year ahead, but he’s off to an incredible start.”
adidas’ diverse collaboration strategy is reflected in the brand’s global appeal. StockX has previously explored the differing consumer behaviors across countries and continents, and adidas’ strategy has seen different types of products or collaborations resonate in different markets. “With adidas, the diversity of their silhouettes is matched by the diversity of their geographic appeal,” reveals Einhorn. “We’ve seen adidas releases resonate in a number of different markets: their ZX releases are hugely popular in Germany, while the Bad Bunny collab drove significant demand from buyers in Puerto Rico and Mexico.”
The Cross-Buyer Phenomenon: Trading Cards vs. Sneakers
The trading card hype has been evident for quite some time. It’s a topic that StockX has explored previously in its Market Snapshots and one that more and more sneakerheads are interacting with on a daily basis. The overlap between trading cards and sneakers is clear. Both are driven by a lethal dose of nostalgia mixed with hype. There’s a lot of money to be made buying and selling trading cards and, for the older sneakerheads among us, it reminds them of their childhood, just as retro Air Jordans remind a lot of people of Michael Jordan and the mind-boggling things he did on the basketball court.
“If you look at a brand like Pokémon, we see buyers overrepresented among both the youngest and oldest age cohorts,” reveals Einhorn. “Young buyers are entering the hobby for the first time, while older buyers are reconnecting with a childhood pastime.”
To demonstrate the overlap between these two worlds, StockX and Highsnobiety have identified three main trading card types — Pokémon, NBA, and European football — and looked at which sneakers are favored by buyers of each type of trading card. While not a concrete trend or pattern, it helps illustrate the budding cross-over between the two genres and speaks to how the culture of reselling really has no borders. As long as hype and a certain level of nostalgia exist, you have a recipe for success.
Q1 2021 Snackables: Most Expensive, Most Popular, and Biggest Price Increases
Fabs’ Footwear Forecast
The most important trend this year, economically, will be brands’ shift towards Direct-to-Consumer models. Nike has been leading the charge by controlling where and how its products can be sold, and the pandemic has sped up the industry’s move to DTC.
As Highsnobiety previously reported, Nike ended relationships with a lot of mom-and-pop stores as well as Amazon in the US during 2020. Why this is happening is obvious: the profit margin on products sold through Nike-owned channels is much higher, as they are selling them for full MSRP, instead of for wholesale to other retailers or stockists. It’s unlikely that Nike wants to remove third-party retail entirely from its business model, but it could be much more careful about how much stock is handed out and what types of products land in what types of stores.
“When you have insight to the processes behind retail strategy, it’s not really revolution, it’s evolution,” explains Athletics Footwear’s Chris Kyvetos. “With DTC, your production costs can be higher, meaning brands can spend more time and money on quality and more sustainable production, but the cost for the consumer stays the same.”
The move to a DTC-heavy approach is a blow to some retailers, who benefit from the prestige of carrying certain Nike products. Only the most prestigious and influential retailers will survive, as they’ll continue to get product and have a platform and the cultural standing that big brands such as Nike will want to tap into.
“The pandemic has had a devastating impact on retail,” continues Kyvetos. “The influential retailers survive and get more love from the big brands. The store closures are a sad experience, but I can see independent brands use retail shops in a totally different way in the future. In that regard, it’s also an exciting experience that will play out over the next 5 years.”
How exactly the retail landscape will look like in a few years is still unclear. We could see a more homogenous high street or we could see new brands open stores that will operate very differently to the current model.
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