Marketing the Art of Shoes may seem a strange combination. Not so much if you read Isabel Flower’s Believe the Hype post on Artforum. Who knew “aftermarket” sneaker trading was worth $1.2 billion. Yes, that’s BILLION with a “B.” Sneaker sales even have their own “stock market” called StockX. We shot a six-second video of the sneaker ticker tape (right).
Here’s how Isabel describes StockX:
“StockX is no ordinary marketplace for secondhand apparel. There is only one kind of shoe available: deadstock sneakers. Deadstock once meant something as dismal as it sounds: inventory that failed to sell on the primary market. But in the secondary marketplace, the term evolved into a valuable guarantee that an item is unused. Unlike eBay, which is flooded with imitations of all stripes, StockX vouches for the authenticity of each sneaker on its platform. Every pair that arrives at the company’s Detroit office is inspected by an “authentication team” of industry experts. Like art objects, deadstock sneakers exist outside of normal standards of use-value; as it is for art objects, authenticity is a crucial part of their worth. And like the art market, the sneaker resale trade is predicated on converting cultural cachet into economic value.
No one has been more successful at this lucrative alchemy than Nike. In 2014, a staggering 96 percent of deadstock sneakers sold on the secondary market were Nikes, and the resale of these shoes alone generated a larger annual profit than the primary sales revenue of Nike’s closest competitor. We’re not talking about just any Nikes, either—the most sought after are, specifically, Air Jordans.”
Flower discusses the downsides of creating such a fetish market too. Kicks, a film by Justin Tipping, is about the perils of owning and trying to rescue sneakers. We share Isabel’s post because markets are hard to make these days, so there are lessons to be learned from “sneakerheads” including:
- Rare Sells – Perceived exclusivity and “rarity” become truth when enough believers play
- Flock of Birds – Belief and so markets using flocking behavior
- Weather-like – Markets can be as sudden and capricious as weather
I studied art in college with a great but largely undiscovered painter named Alton Pickens. Pickens, a gifted artist, hobbled by arthritis and inner demons, taught art at Vassar College from 1958 until his death in 1991. Alton’s paintings are rare but not as valuable as anything contemporary artist Jeff Koons stepped over.
Flower discusses the strange alchemy that makes sneakers “rare” and “valuable.” J Langdon taught me a lesson in value when he was CEO of Topps. Baseball cards are another “aftermarket” collectible with strange alchemy. Baseball cards, like sneakers and art, combine cultural zeitgeist with perceived rarity to create value.
If a player was favored, had awareness and following (reputation) their card’s value may consistently increase in value as market forces reduce the number of cards in circulation. That last sentence, J explained one day in New York, is a creation, a fiction. When a genuinely rare card sells for millions the market’s “fiction” becomes a reality. When the legend becomes fact, print the legend.
The baseball card market is a vicious bell curve. The tiny group of the truly valuable cards cluster to the far right while most cards (or sneakers or art) sit in the middle with an average value and sparse return and other cards should be burned now. Alton’s paintings would seem to fit into the group of pictures on the far left where value can’t cover the cost of their painful creation.
Any market based on perceived rarity is at risk. Ask a tulip seller in Holland in 1637 what it’s like to watch the air go out of the “rarity” balloon. The perception of rarity, as J pointed out, requires the most precarious of things – mob’s and their fickle beliefs.
If you’ve ever watched birds whirling and wheeling as one you know “flocking behavior.” When something cultural zeitgeist heats up, and everyone must have something, see something or be something humans flock like birds. The Internet means “flocks” can be established with smaller numbers as StockX proves.
If you’re a marketer and want flocking behavior you need a few things including:
- A Market – You need a means of transferring, confirming and authenticating sales to establish value
- Social Norms – Behavior too needs a means of regulation to develop a perception of “safety”
- PR – Machine to hold up otherwise anomalous examples as aspirational examples
You might wonder why you would want to go through so much trouble. If so, reread Isabel’s Artforum post carefully. Nike sells as many sneakers via the aftermarket as through their normal distribution channels. AND Nike’s aftermarket fetishes reduce advertising and branding cost. When everyone is talking about wanting something, when humans flock to your brands, your load, costs and work is lessened.
Weather is predicted never fully known until NOW. Weather’s not so hidden reality is right fo all things always. Humans in flocks distort and deny. Market bubbles happen when the balloon of collective distortion can’t hold more air. The balloon pops and Humpty falls off the wall as the NOWNESS of weather asserts itself again.
Nowness is a critical marketing idea thanks to the web. Marketers used to create aspirational brands with an elusive and hard to prove claim – a better tomorrow. The Internet means customers can know more NOW than ever. They find out more about reputation, other “like me” consumer’s experiences with a product or service and tomorrow’s weather forecast.
Watch MIT’s Joi Ito discuss the importance of NOWISM in his TED Talk. Ito suggests leaving the known for the unknown. He wants us to “embrace the suck.” Flocking and weather mean Ito’s assertions true. The digital revolution is changing everything why should marketing be exempt? When we look back, years from now, we’ll wonder how we were ever so naive and full of hubris. Ito’s real admonition is to listen, care and act openly, honestly, and with flexible purpose.
Alton Pickens, The Sendoff