The world wouldn’t be the same place if it weren’t for shoes. Shoes protect our feet from pain and diseases caused by the potentially dangerous natural elements that lie on the earth’s surface. They also provide comfort and prevent soreness when traveling by foot. We need shoes, so why not make them something more than just a protective boot around your foot? Well, many people have been, for hundreds of years. Sneaker culture is bigger and more influential in our lives than ever before because of the ways Nike revolutionized the shoe, how sneakerheads turned shoes into collector’s items, and because of how much money lies in the sneaker industry. Psychologists at the University of Kansas and Wellesley College conducted a study with nearly 300 students, 63 were shown pictures of shoes that belonged to the other student volunteers, who filled out a survey about some of their personal behaviors and traits. Scientists found that the participants identified not only the gender, age, and agreeableness of the participants based on their shoes, but surprisingly, they were also able to target the student’s income level and measure attachment anxiety. Our choice of footwear speaks volumes about who we are as humans, and whether you choose to believe it or not, shoes are more influential in our lives than you may think.
People like to be noticed, whether we choose to gather attention from our appearance, talents, or personality, the number of humans who enjoy being nobody to anyone is next to none. Closing in on the appearance aspect of humans, it’s typical to showcase one’s wealth through what he/she is wearing. Flashy shoes, brand-name clothes, or designer accessories are all ways some people choose to express themselves through how other people see them. The ultimate display of wealth could be as simple as wearing a rare and expensive pair of athletic shoes. “People desire luxury. They want to feel better than other people. Jordan and Nike aspired to be a brand of luxury, which is the reason why kids still spend $150” (Dover, personal communication, 2016). It is self-esteem through consumption. Less fortunate people want to be part of something, so they buy products to be part of that world and to feel connected with others.
So, how important really is the sneaker industry in the U.S.? The global footwear industry is a $52 billion business and it’s only growing. The types of shoes included in this industry are vast, however, the most sought-out form of shoe is the athletic shoe, aka sneakers. Perhaps the most commonly recognized examples of sneakers are basketball shoes, with the most popular product being basketball legend Michael Jordan’s signature shoe, the Nike Air Jordan. The Nike Air Jordan tops any other basketball shoes by a mile when it comes to income levels and sales. Jordan brand generated $3.14 billion in revenue in 2018 alone! The majority of all sneaker fanatics would agree that the true beginning of sneaker culture as we know it can be traced back to when the Nike Air Jordan I was released in 1984. Michael Jordan was a basketball player who skipped his senior year at the University of North Carolina to pursue his NBA career with the Chicago Bulls. Jordan very quickly established himself as a superstar. Jordan was the first athlete to truly fit the corporate mold, with both Nike and Adidas recognizing his market potential. However, the Nike Jordan almost wasn’t Nike. Both companies submitted massive endorsement deals, and although Nike’s signing bonus was less than that of Adidas, Nike offered Jordan a percentage of their future sales and promised to name a new shoe after him. Jordan signed with Nike for $500,000 a year in cash for five years plus stock options. Also, as Nike promised, Michael Jordan’s earned his very own shoe line named ‘The Nike Air Jordan’, which became the first time a company named a shoe after a rookie.
The Nike Air Jordan I was both a technological and design breakthrough. The shoe was made for a perfect on-court shoe, receiving the best performance ratings in the NBA in 1985, and also made for a streetwear fashion icon. Riku Laitasalo, a graduate student at Aalto University School of Business states: “The combination of cutting-edge technology, audacious design, and endorsement of a superstar was something American society didn’t know they wanted until it came to market”. The reason the invention of the Nike Air Jordan was such an influential part of shoe history is that now someone could buy a single shoe that would yield the best results on the court as well as make a fashion statement everywhere else, this was revolutionary. Jordan’s, another simpler name for his shoe line, were the first shoe people genuinely desired. Dan Dover, store manager at popular shoe store Finish Line, states: “Jordan was wearing shoes unlike anything anyone had ever seen. You had this 21-year-old guy just dunking over people, absolutely dominating everyone. It created a paradigm” (Dover, personal communication, 2016). The Nike Air Jordan I cost $70 in 1985, this large sum of money for a pair of athletic sneakers was laughable at the time. The price was around $140 today when adjusted for inflation. This strategy to inflate the price of a shoe so drastically was executed by Nike flawlessly, placing the Nike Jordan right into the heart of the sneaker-collecting world. Over the years, Nike released subsequent versions of the Air Jordan named in the chronological order in which they were released, e.g., Jordan I, II, III, IV, and so forth, making the Jordan line not only a basketball shoe but collecting pieces.
Sneaker culture has come a long way. There used to be an almost unlimited selection of sneakers available to anyone who could afford them in the 80s and 90s. In the early days of sneaker collecting, one gained credibility through the tedious process of hunting for rare shoes. Before the Internet, sneaker fans read about shoes in magazines or overheard information about upcoming shoes through friends or personal contacts. Now, anybody can buy their way into this sneakerhead subculture, thanks to the Internet. The irony of the Air Jordan I that we talked about earlier was that it both popularized sneakers in American culture, while also starting the demise of the term ‘sneakerhead’ as we know it. Sneakerheads are collectors who buy and sell shoes as not just footwear, but more as collectibles. Sneakerheads are insane about shoes. The early sneakerhead has its origins in the poor neighborhoods of New York City. Recreational athletes would purchase sneakers for their performance on the court, but there existed a small group of people that would also wear these athletic shoes in social settings. Some saw these kids as people who just wanted to be like the athletes when in fact they wore them because they liked the way they looked. Shoes served as a way for these people to truly express themselves through what they wore. The rarer and more obscure the colors, the better. It was all about exclusivity and uniqueness. The use of sneakers as a way of self-expression was a way for those who could not afford expensive jewelry or other material possessions to display their individuality. These people were the first sneakerheads.
True sneakerheads are passionate about shoes. They may also be highly experienced in distinguishing between real and replica sneakers. Sneaker collecting is a hobby manifested by the use and collection of shoes made for particular sports, particularly basketball and skateboarding. Since there is no standard definition of who can be called a sneakerhead, a person who is simply an enabled fan who has purchased a few collectible athletic shoes might claim the sneakerhead title. There is no quality control over the term, which is exactly why the term is looked down upon and resented among hardcore sneaker fans. But what is considered a hardcore sneaker fan? With the wavering definition of the term ‘sneakerhead’, the meaning of a true hardcore shoe fanatic falls into two categories: sneaker collectors and sneaker resellers.
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The group of individuals who claim themselves as true sneakerheads and identify as collectors or enthusiasts will stop at nothing to get the certain pair of shoes that they desire. If a limited-edition shoe is being released, they will camp out in front of the store overnight or stalk the website they are releasing from for hours in hopes of getting their hands on a pair when the store opens. The difference between the two is when you get down to what that person will be doing with the sneakers if they get lucky enough to purchase the rare pair of footwear. A collector will keep the shoes to add to their personal collection solely out of love for the brand, the model of the sneaker, or the story behind the release of the shoe. One of the most famous sneaker collectors of all time is Kenny Gonzales, also known as ‘The Perfect Pair’. Kenny started collecting shoes in 1993 at age 15, along with his brother, Louis Gonzales. The brothers collected limited edition sneakers for years together, including the shoes Michael Jordan wore when he took his very last basketball shot in the NBA until Louis passed away due to heart problems in 2013. His brother’s death sparked Kenny’s love for shoes as he felt he was continuing on his brother’s legacy; it is what he loved to do. Kenny’s brother was buried along with his entire sneaker collection of hundreds of pairs of shoes, except for a select few that Kenny kept. After many more years of collecting limited edition shoes and posting them on social media, Kenny’s shoe collection grew to over 1,250 pairs valued at over $700k and has earned him over 650k followers on Instagram.
The art of reselling sneakers is a billion-dollar market that should not be overlooked. This is where the second form of die-hard sneaker fans come into play, the resellers. The birth of sneakerheads and their willingness to spend thousands of dollars on a limited pair of shoes have given rise to a gigantic secondary market, estimated to be worth more than $2 billion. According to Cowen, an investment bank, “The resale market for sneakers and streetwear is increasing by 10% annually and has the potential to reach market values in the tens of billions by 2025”. The resale market is so large that there exists a stock market just for sneakers, StockX, which lists sneaker valuations very similar to what you might see on financial stock exchanges. The market continues to grow as large investments have flown into many sneaker-reselling sites and shops in the past year. For example, Foot Locker Inc. said it was investing $100 million in Goat Group, an online reselling platform for sneakers, as well as Farfetch Ltd., a luxury-fashion site, said it was acquiring Stadium Goods, a sneaker-reselling store, for $250 million.
The general public often tends to get confused as to how this is such a large and thriving market when they don’t see it occurring around them every day. For those that do not understand reselling, it is simply purchasing a very limited item before others get the chance to and selling it for a percent markup. Over the past couple of years, there have been some ridiculously high, record-breaking sales on StockX. The marketplace does not only sell shoes, but also specializes in all designer brand clothing, watches, and accessories. Here are a few sales that may seem extraordinary to the average consumer. In August 2017, the Louis Vuitton x Supreme Trunk Case retailed for $46,000 when it first came out, and in May 2018 it sold for $216,249. In 2016, Nike released 89 pairs of self-lacing Nike Air Mags with average sales of around $50,000. And finally, the Air Jordan I x Off-White Chicago retailed in-store for $250 and has multiple sales for over $6,000.
Entrepreneurs will arise anywhere there is an opportunity for money to be made, and the sneaker world is full of them. Resellers like Benjamin Kickz resell shoes for way more than they get them for and are able to make a lot of money doing it. Benjamin Kapelushnik, aka Benjamin Kickz, is a 20-year-old sneaker reseller who quickly became one of the most successful entrepreneurs in the shoe resale industry. Ben is a sneaker broker for celebrities, which means that in the crazy world of limited shoes with even crazier price tags, he will do whatever it takes to get his clients the sneaker they want. Ben finds rare sneakers that you cannot get anywhere else and sells them before they are available in public. “I’m that one person that goes and scatters it around”, he explains during an interview with New York Magazine. “No one wants to go through dealing with a random seller, because he only has one pair, one size. I have every pair, every size, because I just bought it from everybody. Done”.
Kapelushnik’s first business deal was made when he was in his seventh grade when he bought a pair of Lebron x MVPs for $400 and sold them for a 900% markup of $4,000. Yes, you heard that right. Benjamin started reading sneaker magazines to spot current trends, studied the resale market, and used his bar mitzvah money to buy more shoes. Kapelushnik launched his official resale website when he was 16, sneakerdon.com, where prices for sneakers vary from $100 to as much as $20,000. Benjamin also has his own clothing line called ‘Boomin’, which originated from people asking him how his business was going, and his response was always the same, boomin. And booming it is, Benjamin is currently on his way to making more than $5 million in sales this year, as he told New York Magazine. Ben’s biggest clients are celebrities, including DJ Khaled, Odell Beckham, P. Diddy, Kanye West, Migos, Kevin Hart, and Travis Scott, just to name a few. Despite his very young age, Benjamin Kickz has flourished in his industry, and his genuine love for shoes is the key to his success. However, he is not going to be 27 years old still selling sneakers. Ben says: “I want to do business and marketing, and I think I could grow a lot more by learning that in college. I do have a head start, but imagine having a head start and then being able to go forward even more”.
As I established, the world would be a different place if it weren’t for shoes. Sneaker culture is more influential in our lives than the average person may realize. Whether we choose to wear shoes as protection from the earth’s elements, for comfort, or as a fashion statement, shoes impact our lives in so many ways. Nike has unbeatable sales records and has changed the game when it comes to influence in the sneaker world, sneakerheads take pride in what they put on their feet and have introduced a lifestyle of collecting sneakers to the world fueled by a passion for the product, and more money than anybody could imagine lies in the sneaker industry. The current direction of the sneaker industry is dictated by the major shoe manufacturers to spot trends occurring in the fashion world and act on them.
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