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Real Talk: Niche Nous Versus the Big Guys

Date: December 27 2017

By: Hikmet Sugoer

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I don’t want to feel like the grumpy old man of sneaker culture, but there are many things I would like to share with the world. It seems like the so-called ‘game’ has changed. When we were young, we were travelling around the world to hunt for sneakers that no one else had – and I’m not talking digitally. I remember fans camped out on the street for days in the hope of obtaining their desired product. Where are kids getting their shoes now, is it all online? The only camping that I hear ‘heads’ are doing is in front of the computer. And what about the distribution? Are adidas and Nike serving a passionate niche audience anymore?

I know I am asking a lot of rhetorical questions, and there aren’t any easy answers. I started my journey in the sneaker world 15 years ago with a small store, Solebox. At the time there was probably only a dozen similar shops in the world and all of them were independent. And I mean independent! We flew around the globe buying loads of deadstock products that weren’t available in our region. After years of doing things this way, we eventually started working directly with the big brands. This was much easier for us, because these companies realised that they had to provide us with special product. They weren’t even out to make money at that stage – they understood that a brand needs to provide for that in-the-know audience in order to stay desirable. We all worked closely together to raise demand for special products, and it helped the image of both the big players and the independents. It was a win-win relationship.

Over time, more and more people wanted to cater to (and make money off) a niche audience. Everyone wanted a piece of the action, but the small fragment of total demand had been divided too many times already. Like most of the stores back then, I was loyal to the brands. Unfortunately, in some cases, this loyalty was only one-sided. Let’s put it this way, say the brands are the ‘players’ and all the stores are ‘side chicks’. As soon as there was a new side chick in town, you were out. New stores would pop up and generate a lot of buzz, but they would vanish as fast as they appeared. It was a daily struggle to stay on top of the hype cycle.

Some store owners will remember how companies led them to be strategically dependent on their brand. You might focus more and more on one supplier because you thought it was a balanced and loyal relationship – but it wasn´t. By the time those individuals realised this it was too late – the brand had all the power. They couldn’t break out of the relationship because their entire business was built on it. What had initially appeared to be a great concept for both sides became a living nightmare, as a store would become entirely reliant on the hand that fed them. I was one of the first to shout, ‘Free love!’ I threw off the restrictive handcuffs of brand-exclusivity, and got a balanced share of product in my store. Remember, it’s always better to be a player than a side chick – and I’d learnt from the best.

Gradually, other stores started to change their models and call the shots. These former-independents started to acquire support in the form of investors, or they became part of larger chains. They began to navigate the business world – where being big means that you have power. But was all this good for sneaker culture? How can you possibly take a boutique store and suddenly decide to run it like a chain? If you try and operate a small store like a franchise you risk losing the individual signature that makes it special in the first place. Personally, I didn’t think that it was sustainable – but most people weren’t working with the long-term in mind.

"What had initially appeared to be a great concept for both sides became a living nightmare, as a store would become entirely reliant on the hand that fed them."

Let me try and explain the market that we occupy as independent retailers. There’s a structure to it that’s sort of like a pyramid. You launch your product at the top – with the tastemaker niche audience – so it can trickle down to the wider market. This product category shouldn’t be overrun as it becomes more popular, it needs to stay limited. These days, it seems like the inline product that doesn’t make it to the boutiques is more desirable and harder to find. It’s like a pyramid that’s been turned upside down – it makes no sense. That’s the thing about the minority – not everyone can be a part of it. The underground needs to stay underground, or else you have a problem.

So when is it appropriate for a small store to expand? I think it’s when they’ve done their homework and learnt how the business works. That’s the point when your passion becomes your profession. Once you’re self-sustainable and not totally devoted to a brand, you can demand a little more ‘get’ for what you’re giving. Of course, this sort of arrangement can cause problems for the big names. Especially when the naive stores of yesterday aren’t so easy to control anymore. When you’re a company with shareholders, control and calculated risk are very important. So, the brand decides to take the power back and feed the customer directly, bypassing the independents in the process. After all, there’s better margins and no power struggles to worry about.

Where does this leave the smaller stores now? Niche stores need to reinvent themselves – again. On their own it’s a David and Goliath battle that they can’t win. Getting a supporter with big money or joining a chain to form a ‘gang’ was a good strategic move at the time, as it ushered in a new era of sneaker retail. But it’s left us with a paradox – stores are now competing with the very brands that they’re stocking. It makes no sense.

Somewhere along the way the passion for serving the niche audience got lost, both by the brands and the stores. Where do we go from here? It’s hard to say – but we have to think long-term. Remember, if we tackle this marathon at the speed of a sprint, we’re guaranteed to lose. Think about it!

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