It wasn’t long ago that the worlds of sneaker culture and luxury fashion were in different universes. But today, it’s often hard to distinguish one from the other.
Illustrious European houses vie to put out the season’s most coveted style, pitting Gucci’s $980 Flashtrek against Louis Vuitton’s $1,600 LV 408 Trainer. And they’d be crazy not to: Balenciaga’s best-selling Triple S and sock-style Speed Trainers catapulted the brand to the top of parent company Kering’s portfolio, putting it on par with (or even above) Gucci in terms of growth in 2018.
According to The NPD Group Inc.’s latest Luxury E-Commerce Report, footwear now accounts for nearly half of all luxury fashion dollars spent online, with high-end sneakers propelling much of the growth.
Sportswear giants have reciprocated with overtures to the high fashion world, too: Adidas has tapped the likes of Yohji Yamamoto, Rick Owens and Raf Simons; Nike’s worked with cult favorites Comme des Garçons, Sacai and Undercover; even Vans has linked up with Kenzo and Jean Paul Gaultier.
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And the symbiotic relationship extends beyond buzzy collaborations. Luxury houses are increasingly cribbing from athletic brands’ playbooks in their marketing and distribution strategies. Here’s how:
1. Adopting the “drop”
When Louis Vuitton launched its LV Trainer sneaker collection in China this February, it did so via a pop-up shop announced on its WeChat account. Burberry and Balenciaga, too, have experimented with pop-ups on the popular Chinese social platform to gain new ground with consumers in the region.
Meanwhile, Barneys lured California fashion fans with a two-day event called “The Drop LA” at its Beverly Hills, Calif., flagship last June, which featured exclusive collections from Prada, Fendi, Rick Owens and more. The limited-time limited-edition retail model is a signature of sneaker brands, which have honed it to an art form in recent years. Case in point: At Coachella last month, Adidas drummed up hype around its collaboration with Donald Glover by having the multihyphenate star AirDrop photos of his sneakers to a lucky group of fans at the festival.
The appeal of the drop makes perfect sense for luxury, a segment of the market that is built on exclusivity, and is particularly in line with the desires of younger consumers.
“Growing up with social media at their fingertips has changed not just the way Gen Z shops but also their mindset as they’re shopping,” Maya Mikhailov, co-founder and chief marketing officer of mobile commerce platform GPShopper, told FN. “They’re looking for products that project a feeling of being special or having access — which is what these limited-edition drops provide.”
Tying a drop into an event is particularly effective, she said, because “that feeling of ‘you had to be there’ plays very much into the Gen Z and millennial mindset.”
2. Embracing resale
Last month, Neiman Marcus became the first luxury department store to make a major play for the secondhand market with its announcement that it had purchased a minority stake in Fashionphile, a resale website specializing in preowned designer handbags and accessories. Re-commerce is growing fast: The overall U.S. market is expected to reach $51 billion by 2023, up from $24 billion last year, according to a report by the resale site ThredUp using research from the analytics firm GlobalData PLC. Luxury brands and retailers could look at the burgeoning industry as a threat (and certainly some still do), but instead, many are coming to embrace the secondhand space.
With its new partnership, Neiman Marcus will open Fashionphile “salons” in several of its locations, allowing customers to drop off handbags, jewelry and other accessories, and have them authenticated on the spot for cash, which it hopes they will then spend in the store. In a survey, the retailer found that half its customers buy or sell preowned luxury goods, and 75% of luxury customers who resell items buy new luxury purchases within three months.
The sneaker resale industry, meanwhile, is thriving, worth an estimated $2 billion in the U.S., according to data from StockX, an online sneaker, streetwear and accessories marketplace. StockX alone is reportedly in talks for a funding round that would value it at at least $1 billion, while its competitors have been some of the hottest M&A targets of the past year: Stadium Goods was acquired by the luxury e-tailer Farfetch for $250 million in December, while GOAT Group, the parent company to resale stalwarts GOAT and Flight Club, secured a $100 million investment from Foot Locker in February.
Luxury players do have to tread carefully in this arena, though, or they risk diluting their brands or alienating the designers they carry. “The key to a successful resale strategy is to still remember the experiential aspect of shopping and keeping authentic to the brand promise,” said Mikhailov. “As such, retailers need to work backwards and consider the end result — what their specific shopper wants to feel after the transaction — before creating a strategy to get there.”
3. Aligning with hip-hop stars
Rappers have been dropping designer names in their lyrics for decades, but as far as luxury brands reciprocating the love, that’s a fairly recent development. Today, you’ll see A$AP Rocky fronting Loewe’s spring campaign, Pharrell Williams designing a unisex collection for Chanel and Cardi B stealing the show at the Met Gala in a Thom Browne gown encrusted with $500,000 ruby nipples, but the relationship wasn’t always so cozy.
Sneaker brands were much faster to extend a hand to the hip-hop world: Adidas seized on the success of Run-D.M.C.’s track “My Adidas” in the late ’80s and gave the group a multimillion-dollar endorsement deal and a limited-edition Superstar sneaker; then, in 2003, Reebok tapped Jay Z as its first non-athlete to design a signature shoe, and the S. Carter became its fastest-selling style.