How sneakers are forcing luxury and non-luxury brands to compete across price points

Streetwear and sneakers are among the biggest disruptive forces in fashion today. While much has been written about the overlap between the worlds of luxury and streetwear — embodied most notably in the appointment of streetwear icon Virgil Abloh to creative director of Louis Vuitton — one underexplored change that streetwear’s rise has brought on is the introduction of competition between brands across vastly different price points.

In the aisles of Saks Fifth Avenue and on luxury e-commerce sites like Farfetch, one can find a $150 pair of sneakers from Adidas sitting alongside a $900 pair from Balenciaga. Not only are these brands carried by the same retailers, but they are often explicitly going after the same customers.

Public School’s Dao-Yi Chow, in an interview with Racked, spoke about a Miami men’s boutique he opened in 2005 that heralded this change.

“It was a concept shop mixing high and low,” Chow said. “We had brands like Margiela and Junya Watanabe mixed with brands like Stussy and Nike.”

Now, brands like Nike and Gucci, previously separated by huge price differentials and serving completely different segments of society, are playing in the same court. Streetwear and sneakers, in particular, are directly responsible for this change.

“Retail was traditionally done through direct and wholesale, and now we’ve exploded the number of ways that people can shop,” said Chris Paradysz, CEO of PMX Agency. “You have this kind of disruption in the classic retail channels, and streetwear and sneakers specifically are doing this. They are changing how people consider and how they shop and buy.”

The overlap between luxury and streetwear has led to lots of collaborations across price points. Nike has collaborated with Dior’s Kim Jones and Adidas with Raf Simons. But these brands are also now competing for the same customer. This can most readily be seen in the increased production of sneakers from brands like Prada, Balenciaga, Fendi and Balmain.

But the disruption goes both ways. Just as sneakers from major street brands like Nike are appearing in traditional luxury retail stores, sneakers from big luxury brands like Balenciaga can also be found in sneaker culture’s most hallowed grounds like Stadium Goods.

“Sneakers are disrupting luxury, and luxury will disrupt sneakers, too,” Paradysz said. “You never would have thought that Nike and luxury brands would be on the same shelf in the same store. But now, you’ve got Stadium Goods, which got a huge influx of cash from LVMH, and StockX just got a massive investment. These sneaker resellers don’t just sell Nike and Adidas anymore; they sell Louis Vuitton now, too.”

According to data from Edited, 42 percent of sneakers sold are from mass brands while only 16 percent come from luxury brands. The five most-sold sneaker brands — Nike, Adidas, Puma, Vans and New Balance — do not include a single luxury brand.

For luxury brands, this has led them to an uncomfortable situation. While luxury has always prided itself on having the best designs, the best construction, the most experience and so on, these brands now find themselves as underdogs to brands that sell at a much lower margin than they do. Nike has been refining and perfecting the casual sneaker for decades. Gucci may have the pedigree of its name, but not nearly the amount of experience in the sneaker world as its newfound rivals.

“Gucci used to make the same three shoes every single year, with no change,” said Eddy Lu, CEO and co-founder of GOAT. “The truth is, Versace and luxury brands don’t know who these customers are; they don’t have the experience. They’ve never focused on this category or this customer before.”

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