COVID-19 has turned most industries upside down, disrupting the retail landscape on its head. Lockdowns induced by the first wave of the virus followed by the post-pandemic social distancing measures have left retailers and brands in a daze.
How COVID-19 shook the sneaker resale market
The second half of the pandemic saw even a titan like Nike – the biggest player in the sneaker game – not able to withstand the effects of COVID-19. According to a report, Nike’s sales fell 4% versus the same period last year. Despite being one of the stronger performers in the US retail market, the impact of the pandemic continued to affect Nike’s sales, hampering much of Europe and the US – the company’s biggest market. This was most likely caused by 90% of Nike’s physical stores closing in North America, Europe, and much of Asia (excluding China). Furthermore, Nike’s retail partners were forced to close as well.
While the brand’s digital sales went up to 79%, with the business doing more direct-to-shoppers online selling, as a whole it was still not enough as those numbers only made up 30% of Nike’s total business.
Image via qz.com
With thousands of retailers forced to close their stores, small businesses and resellers have been hit hard.
Many of these issues come from the fact that sellers have been forced to spread their resources thin, holding back on their expenses. One of the bigger resellers in the market, Stock X, had reportedly laid off 12% of its workers and closed most of its physical drop-off locations. At the time of the pandemic’s first wave, 300 of the 500 most popular sneakers had witnessed a decrease in their resale price. While the percentage (4%) of the decline was not drastic – unlike the stock market’s 25% decline – the first few months since the outbreak had left businesses and the community shaken.
Turning profit selling sneakers during a pandemic
While the market definitely saw a bit of volatility as the pandemic crept across the world, with many retailers slowing down sneaker production due to the drop in sales, as a whole, the sneaker market is far from falling off.
In fact, since the initial dust settling, some have even thrived. Cases like that of Danny Hasbani’s, a 17-year-old sneaker reseller who earned about $500,000 this year alone is an example of this.
Some believe that the significant drop in limited-edition sneakers prices was only temporary, caused by the initial panic of the pandemic. As more people flock online to do their shopping, marketplaces that have focused on their online channels have begun to see profits.
While the physical retail stores experienced a massive drop in visitors, this did not stop sneakerheads from rushing into the online apps and platforms to get the latest releases. In a recent press statement by StockX, they confirmed that May and June 2020 were their biggest sales months since creation.
Changes in the resale market
For those who are interested in selling sneakers or are already doing so, some of the reasons for the recent boom in sneaker sales could be the following:
- Reduced sneaker prices – Since the pandemic hit, sellers have been offloading sneakers at high rates. Buyers are buying high valued shoes at cheaper prices than before. With the resale value dropping for several brands, buyers have been able to get certain sneakers for a much lower price than imaged. One user noted that they were able to cop a Travis Scott release, which normally would’ve gone for $600 USD, at close to half the price.
- Increased panic selling – While this has reduced significantly since the initial phase of the pandemic, many people are panic buying and selling. Worries that the resale market will fall-off has left many people selling their sneakers as quickly as they can, leaving room for sneakerheads to snatch them up at a bargain.
- Shift in consumer behaviour – Everything has gone digital. People have begun to shop through online platforms, with more retailers diversifying their channels to be digital. Consumer behaviour and retailer mindsets have both shifted to take a digital-first approach.
Buy freely in three
In a time when the entire world is going through a global crisis, with rising unemployment and retailers closing their physical shops, spending freely has become less of an option.
As a team of fellow sneakerheads ourselves, we at Novelship understand the desire to cop the latest releases, when we want, how we want. For that reason, Novelship has partnered up with payment providers, Atome to help alleviate these worries.
With Atome, you can pay for your sneakers in 3 equal instalments with 0% interest, and 0 service fees.
Currently with Atome, by signing up now, new users can enjoy $10 SGD off with a minimum spend of $40 SGD.