Is Streetwear and Sneaker Culture dead?
Nike stock clocked in at $77.80 today, VF Corp which owns Vans, North Face and Timberland $17.53. Adidas AG is at $115.23, faring a little better trading $50 bucks below its high. These bellweather stocks are at an all time low. Depressing times in the sneaker and apparel business. Yeezy was a $2B business for adidas and now what? A lot has changed in the last couple of years. Youth Culture BP (before the pandemic) and Youth Culture AP (after the pandemic) are two very different beasts. The pain and bleeding will continue, however, The good news is that street culture, which influences youth culture, is alive and thriving in subcultures which is where it belongs.
Over the last 3 years things grew to an unsustainable level in culture, the Sneaker and Streetwear space was over saturated, it will survive, however, it will downsize in order to do so. The rampant digital transformation of the pandemic, excess inventory, sites popping up touting aftermarket kicks, the over reliance on a DTC strategy and the disruptive consumer shopping behaviors were just too much for these large brands to cope with. In addition, increased competition coming from Hoka, New Balance, Crocs and ON footwear really gave heritage and these industry leaders a run for their money. Let’s unpack this.
This industry strives to stay relevant with Gen Z and Millennials. This generation has really focused what little disposable income it has on experiences vs. objects. This is a consumer group where even those with a regular job and some money have a “side hustle”. They work nights, drive ubers, tattoo friends, sell on Depop whatever it takes to pay the bills. The last thing they need is 50 pairs of sneakers. Generation Xers are collectors, we like to curate objects, the others, not so much.
The pace at which drops come to market has become unsustainable. Supreme even knew that years ago shutting down their new collections during the summer and bringing nothing to market. The horror, guess what? It drives demand. At NTWRK, which bills itself as shopping entertainment or “shopping at the speed of culture” we were dropping 5–10 drops a day, shopping festivals every month. Across multiple categories from toys to apparel, accessories, and footwear. This has eventually become completely irrelevant. No one needs or wants that much stuff. What is interesting is we tried the model with high end design objects and furniture and no one cared. Very little was sold. Why? Design figures in culture can sell things and drive community, generic influence in homewares can’t, at least not to cool young folks. Community is key. Community = Growth=Commerce.
When i speak of this consumer, I am talking about an early adopter, someone that is setting trends and wants a limited edition product proposition. They are at the top of the consumer food chain, influencing their community and others periferally. This consumer is becoming painfully aware of environmental concerns, supply chain transparency, and global waste and landfill issues. They want authentic stories in authentic voices communicated. They are also struggling to save money. Strategically saving money and investing in experiences like travel, concerts, wellness and don’t need a new pair of sneakers or a jacket every month. Less is more.
They also want to see what they have not seen before in terms of storytelling. Everything has to be elevated, especially for a retailer. Content, storytelling, talent, experience etc. When Kith featured iconic Blade actor Wesley Snipes and beloved Director Martin Scorsese in their ad campaign everyone noticed. The funny thing is those icons were likely not someone that Gen Z was familar with, however, the media jumped on it so quickly to validate that it had huge impact.
Media platforms that matter to that consumer like Hypebeast and High Snobiety wrote long form editorials about it, the campaign became newsworthy and drove those critical media mentions to cut through the digital noise. We all have seen the deterioration of PR and media when it comes to activating. PR is dominated by advertorials, freelance writers pitching, and affiliate strategies. It is very difficult to gain media in the current media landscape. Magazines are struggling which is such a shame, because we still need curators and writers to tell us what is worth reading about. A complete press kit is the norm now as most publications will not send a photographer to cover, so that has to be provided by the brand or cultural figure.
At NTWRK we had a contract with Hypebeast to publish advertorials for certain drops. That is how these platforms make money. It looks like an editorial, but is written by the brand and edited for “space only” on the platform. This has become an industry standard. It should be noted that these advertorials can run $8–$25K a pop, so extremely expensive, very similar to the days that Vogue or Uomo Vogue featured an advertorial. For context, a one page ad in Vogue over 10 years ago was over $100K a page with a much lower engagement rate that you could not measure. Street culture platforms like Hypebeast feature millions and millions of daily users, where as a magazine or newspaper may only feature 150K in active daily readers. Overall for PR and media dollars, online platforms do actually present a bargain and have become part of an activation strategy.
What is becoming more obvious is that community engagement is critical for a successful product launch. Regional and local activation is driving results and media mentions. Non endemic brands like Taco Bell, McDonalds, Pepsi are all using the street culture playbook to achieve relevance in these communities. Overlooked and under represented communities like DJ culture, Dance Culture, Maker Culture, Chicano Culture, Trick Bike Culture from Harlem and the Bronx are all there thriving and have not been commercially tapped by big brands. What these communities offer is not just a product collab, but culturally relevant storytelling in an authentic voice that can globally influence millions of young people.
My KPIs for cultural initiatives are usually focused on awareness and media/ social mentions close to 1 Billion. How do you do it? Well, you make sure and bring the right teams together and strategically activate. Right partner+right product+right story +right moment = success in culture.
Chris Gibbs from Union once told me “Culture wants to get paid, needs to get paid” and he is absolutely right. Remember, a collab has to be mutually beneficial, it is relational in nature, but transactional contractually. Culturally relevant partners want a platform and funding for marketing and that is what brands can give them. When collaborations are done right, they are still driving results and that is where brands need to invest because in my opinion street culture will continue to evolve and influence youth. Being a brand relevant in culture or positioning yourself as a “culture brand” is the only way to grow and survive.
