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Retailers Can Fill This “Sweet Spot” in the Luxury Sneaker Market, Edited Says

Sneakers and millennials are changing the luxury game—and retail analytics firm Edited convened a panel this week to get to the bottom of it.

As it stands, 54 percent of all the sneakers on the market in Q3 2018 fell into the premium and luxury categories. Just 19 percent were technical footwear designed for athletic purposes, meaning the bulk (82 percent) were made with fashion in mind.

“That’s a pretty crazy stat when you think about how obsessed we are with health and fitness,” Julia Cancro, business development manager for Edited, said at the event. “It gives you a sense of how heavily fashion has adopted this trend.”

In the three years since 2015, the sneaker palette has shifted away from grey into what Edited dubs the “cleaner” aesthetics of black or white, backed up by best-selling styles that are completely or mostly black. The focus on color has grown, too, as customers embrace the pop-of-color fashion sneaker essential to completing a look these days.

Edited, which pulls data solely from online retailers, also noted an emphasis on “maximalist” styles featuring exaggerated details and profiles. Then there’s the rise of the “hiking hybrid” shoe, led by the Gucci Flashtreks at $1,590.

Looking at the sneaker market overall, the average price point lands squarely in the luxury customer’s range at $764.

Customer demand for fancy footwear and practical sporting shoes isn’t slowing down—and in fact, seems to be accelerating. Sell-through times have dropped by 42 days for Gucci and by 26 days for Nike since 2016, per Edited data. Balenciaga kicks are selling out 36 days faster, and at Prada, sell-through has shrunk by 37 days.

Which brands are luxury retailers actually stocking in their stores? Nike leads overall but high-end brands are closing the gap, with Golden Goose and Gucci filling the No. 2 and No. 3 spots. Adidas Originals, Maison Margiela and Guiseppe Zanotti close out the most-stocked list, Edited said.

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Both Nike (32 percent) and Gucci (31 percent) are growing at virtually identical rates, the data showed, calling into question whether the brands’ customers overlap or shoppers are visiting luxury retailers for different needs. Prada failed to crack the top six most-stocked list but it posted the strongest growth seen by any sneaker brand, leaping 155 percent, Edited said.

Matches Fashion claims leadership in the luxe sneaker game, stocking more footwear in the $550 and higher range than Net-a-Porter, Mr Porter or My Theresa. Overall, Edited said these retailers focus their assortments on the more accessible $250-and-lower range. Curiously, this stands in contrast to how these platforms approach their non-sneaker footwear. While 141 styles of their other non-sporty footwear carry a pricetag above $1,000, just two sneaker styles are similarly expensive, according to Edited.

Retailers looking for opportunities to stock sneakers a few clicks above mass market could seize upon the “sweet spot” in the undersaturated $130-$250 range, Edited said. With sneakers fully in the mainstream today, consumers need the right athletic-inspired shoe for the many occasions in their lives, from work to workout to hanging out to evening, Edited added.

Millennials and their love of the drop culture are among the factors driving new behaviors in the luxury spectrum, according to Edited.