At a time when there is constant talk of a looming recession, e-commerce seems to be defying the idea that retail is broken. According to statistics published by Internet Retailer last month, retail e-commerce sales worldwide amounted to $3.53 trillion in 2019 – up from $2.93 trillion in 2018 – and revenues are projected to grow to $6.54 trillion by 2022.
This continued growth is, in part, due to exponential developments in technology and to an important shift in consumerism defined by Gen Z, a generation that never knew a world without the internet. How ubiquitous mobile devices have become globally has also played a central role in the evolution of online shopping, specifically mobile commerce which continues to see investment as an important channel. According to a 2019 eMarketer report, mobile commerce sales will reach $2.32 trillion by the end of this year, a 28.9% increase since 2018, with the share of mobile sales in total e-commerce sales increasing 28.2% since 2016. In other words, for every $3 spent online on purchases, $2 is being spent through mobile devices.
The convergence of these various elements, paired with the dominating rise of streetwear, the boom of resale markets, and the explosion of sneaker culture, has favored the adoption of sneaker apps. Within a relatively short time span, these apps have not only become essential channels for many major brands – such as Nike or Adidas – as well as sportswear and footwear retailers, they’ve also become a testing ground to further understand and redefine the customer experience.
Amidst an important technological and logistical flux that is impacting retail worldwide, many retailers are grappling with maintaining sales momentum and are struggling to establish reliable predictions, and yet these apps are proving to be reliably successful. Sneaker apps, specifically, have become an appealing option for mobile-savvy consumers. By establishing a direct channel with customers, the apps are able to leverage some of the streetwear industry’s strategies, retaining the attention of Millennials while courting Gen Zers. Some of the tactics that have propelled the apps into commercial success include bridging the divide between physical and digital worlds with phygital experiences and establishing trust with the consumer by combating bootleg culture.
One of the major challenges retail is facing, is finding a balance between the online experience and the physical realm. From luxury conglomerates like Kering to multinational retail corporations such as Target, the shared issue is the same: creating the most seamless and cohesive customer experience between the web and their brick-and-mortar. This is an aspect that sneaker apps are successfully tackling by capitalizing on the active communities that form around the product – in this case coveted sneakers – and extending the opportunity to materialize that online engagement in the real world.
Brands that began as brick-and-mortar businesses rapidly pivoted to mobile commerce, responding to changes in consumer behavior and adapting to new generational expectations. They subsequently developed apps, mostly in reaction to these industry shifts, creating digital extensions of their physical spaces. Sneaker Con, for instance, mostly known for its shoe conventions, only launched its app last year. Designed to compete with the likes of GOAT and KicksOnFire, the app offers brand new and second-hand sneakers. Kixify, which defines itself as the ‘world’s largest sneaker marketplace,’ followed a similar route, shifting its focus from a web-based platform to an app. Even juggernauts like Adidas and Foot Locker eventually succumbed to the sneaker app game. While Adidas looked for solutions internally, launching its ‘Confirmed’ app as a retort to Nike's SNKRS, Foot Locker opted instead to partner with GOAT, the major online sneaker reseller. By investing $100 million in GOAT, Foot Locker will leverage its global brick-and-mortar presence with the reseller’s digital marketplace.
Online retailers created apps as a natural extension of their business models, and down the road, as part of the digital-to-physical strategy, brought their concepts to life, IRL that is. StockX, the resell app, extended its online services by way of 'Drop-Off experiences' earlier this year. Designed as an on-site authentication and payment processing service for resellers, the company hosted events throughout 2019 in Rotterdam, London, and New York, where the platform activated its first permanent retail spot. This month, for its Drop-Off series in London’s Soho district, StockX expanded its concept by adding event programming – including an exhibition of iconic Nike sneakers curated by Archive.DNA – and offering workshops hosted by distinguished designers Liam Hodges and Carri Munden.
Earlier this year, streetwear reselling app Grailed, hosted its first-ever archival pop-up in the Fairfax district of Los Angeles. The event brought together scores of valuable pieces, including a selection of accessories from coveted designers such as Hedi Slimane, Raf Simons, and Rick Owens. A few months later, coinciding with Men's Fashion Week, Grailed also opened a pop-up in Paris. Designed to feel like a “shoppable showroom,” it presented more than 300 new and archival pieces, including a carefully curated selection of designer sneakers. Smartly binding in-person experiences and the use of social media, the marketplace created two participatory competitions. Customizable Grailed lab coats were made available on a first-come, first- served basis, with an additional incentive for posting about the event via an Instagram competition to win €1,000.
Some of these platforms have also bridged the gap between digital and physical by way of innovative technology. Try-On, GOAT's latest augmented reality feature, is a good example of this. Powered by AR commerce company Wannaby, the feature allows users to virtually try on and closely observe some of the most coveted kicks in history including the Wu-Tang and FLOM Dunks, the feverishly sought out Stash- and Futura-inspired Air Force 1s, and even unreleased designs such as Undefeated x Air Jordan 4 and the Glow in the Dark Tour Air Yeezy 1 sample.
Sneaker and streetwear apps have also become successful mobile channels by providing solutions to issues generally associated with unreliable information and online transactions – from bootlegging to unfair pricing. When intermediaries such as Amazon or Ebay are involved, the only protection that is extended to buyers is reimbursement or resolution with the parties involved, which in the case of sneakers costing thousands of dollars can sometimes be problematic.
Product and origin authentication, an important part of sneaker apps’ user experience, for instance, has become paramount in their staying power and in redefining some ‘risky’ aspects of online retail that had become passively accepted. Some top platforms have even established their own brand of the authentication process. StockX, for example, ensures that all products sold on its platform are ‘100% authentic guaranteed,’ by running authentication facilities in Detroit, New Jersey, and Arizona. Kixify’s initiative to deter scammers was introducing the ‘Select’ function, which signals that the product is being acquired directly from the platform’s inventory, with an in-house team making sure the product checks out firsthand. Sneaker Con has adopted a more tech-forward approach to authentication. Every time sneakers are purchased from the app, they are shipped with a physical tag that features near-field communication technology (NFC), a chip containing a full description of the product including specs, historical info, and origin data.