Detroit, Michigan is the birthplace of an assortment of things: the American automobile industry, the first three-colour traffic light, and motown music, among others.
It’s also where StockX, an online sneaker-trading marketplace with the mission of becoming the “stock market of things,” calls home.
StockX mimics a classic stock-trading platform. There’s a live bid/ask marketplace, and you can see a ticker price, sale price fluctuations over the last year, and a price volatility gauge.
Eventually, StockX would like to work with big brands such as Nike and Adidas to essentially IPO sneakers. That is, they would work with the brands to “float” new sneaker launches on the marketplace and perhaps even allow prices to be dictated by consumer demand.
In the meantime, though, they’ve added watches and other categories to the platform.
And all this has helped them get off to a roaring start.
In June, the platform became a unicorn, meaning its valuation soared above US$1 billion. This was thanks to the largest round of venture capital funding in Michigan history.
Further, StockX’s revenue has doubled over the past year, they said in June.
Experts say the company’s success can likely be chalked up to two things: the rise of streetwear culture and the rise of the resale industry.
This year, several other resale marketplaces have raised money or gone public. Instagram-like fashion marketplace Depop closed a US$62 million round of funding. Online luxury consignment shop The RealReal raised US$300 million in an IPO in June. And digital thrift store thredUP raised US$100 million in an August funding round. Just to name a few.
And research collated by thredUP earlier this year found the US’s second-hand clothing market is worth a cool US$24 billion. The US’s fast fashion industry — made up of trend-focused brands such as H&M, Topshop and Zara — is worth around US$35 billion.
What’s behind all the resale fashion hype?
There’s a good case to be made for sustainability being a driving force. The RealReal says it empowers its buyers to “extend the life cycle of luxury goods.”
They even went so far as to create a sustainability calculator to quantify the positive impact they’ve had on the environment since inception. According to their website, they have saved 553 million litres of water and offset 12,200 metric tons of carbon.
It seems that message resonates with customers.
In its 2019 resale report, The RealReal said 82 per cent of its customers cited sustainability as an “important reason” for shopping on the site.
(By the way, research commissioned by brand agency Amplify found young Australians would like to be more conscientious when shopping, although they don’t always take action.)
There’s also likely a case to be made for saving money. Young people often don’t have much disposable income, but resale marketplaces at least give them choice. Now, you can buy clothes that are both budget-friendly and sustainable. That’s new.
It remains to be seen what the rise of the resale industry means for retail at large.
But it does seem likely that traditional retailers will have to find a way to meet in the middle — or perhaps even get in on the game themselves.
This could look like StockX convincing Nike to IPO a sneaker collection. It could mean Nike starts a second-hand marketplace of its own and absorbs some of the resale profits. It could look like brands starting buy back programs.
Either way, the stock market of things is growing.
I’m curious to hear your thoughts on this.
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