Armed with fresh funding, sneaker marketplace Kicks Crew aims to help more mom and pop sneaker shops launch a digital presence.
Kick’s Crew lists, ships, and authenticates products through these retail partners in what it calls a “business-to-business-to-consumer” model, similar to Farfetch. For any particular shoe, shoppers will see products being sold by individual brick-and-mortar retailers unbeknownst to the customer. The model, explained co-founder and COO Ross Adrian Yip, helps retailers quickly grow their customer base online while minimizing inventory risk for Kicks Crew itself.
Prior to 2020, Kicks Crew sold products from five multi-store retailers. But as brick-and-mortar sneaker stores continue to face a drop in footfall and product clearance, many turned to Kick’s crew to launch their digital presence. Now the retailer sells from 20 multi-store retailers. And after raising a $6 million Series A round led by Gobi Partners in March, Kicks Crew is hoping to take a bigger stake in sneaker sales.
Kicks Crew was founded in 2008 as an online footwear retailer with its own product range and switched to its business-to-business-to-consumer model in 2018. Yip said Kicks Crew offers retailers an easy way to try online sales without having to build the service in-house and expand to a global audience. The company’s gross merchandise value increased fifteenfold in 2021 from 2020, and its traffic has increased more than fivefold since January.
Kicks Crew recruits retailers by taking on the complications of e-commerce for them. Kicks Crew handles all dealer integration itself and all online customer logistics. Kick’s crew declined to name specific retailers, citing partnership agreement structures, but said it currently lists about 40,000 SKUs on its website.
“[We] enable them to sell online to reach a wider audience,” Yip said. Sellers control their product, Yip added, and only ship it to Kick’s crew after it’s sold.
Kicks Crew integrates retailers’ stock levels into its online system. If a sale is made, the retailer will be notified and product responsibility and ownership will pass to Kicks Crew. After a retailer ships the product to Kicks Crew, the platform takes care of all other product processes like shipping to the customer, returns and any issues related to cross-border trade like currency changes or global tariffs. Yip declined to share exactly what percentage of product sales Kicks Crew takes in, but said it varies by shoe and style.
Yip explained that many sneaker retailers are able to quickly sell out hero products (such as a Nike Air Force One or Reebok Club C) but are sometimes left with surplus products of more unique styles or colorways. As sneaker brands like Nike begin to shift from retail distribution to direct-to-consumer sales, smaller retail partners often have little bargaining power to return unsold product to the brands.
“We find that up to 70% of our retailers’ products have problems in transit,” Yip said. “You have a lot of stuff flying off the shelf, and the rest kind of has to go through a sell-off cycle… They’re going to start selling stuff to wholesalers or retailers, and the discount is high.”
Yip said most of Kicks Crew’s retail partners are chains, typically with more than a dozen brick-and-mortar stores. The majority of Kicks Crew partners are located in Asia.
“Typical qualities we look for in retailers are a willingness to understand that the landscape is changing [towards online]’ Yip said. “Ideally, working with one larger partner is better than working with 50 smaller ones.”
Neil Saunders, managing director of GlobalData, explained via email that Kicks Crew’s distribution model could help retailers “expand their audience”.
“The cost of acquiring customers is extremely high and rising, so having a presence through a site like Kicks Crew can be a useful way to grow existing sales,” said Saunders. “It can also be an effective way to read a more localized brand to a global audience.”
“For certain very hot-selling products, revenue might be a bit lower, which helps us attract traffic,” Yip said. “For products that are a bit more difficult to sell, it will be higher, or if we know we’re one of the only places where the product can be sold, it will be even higher.”
For consumers, Kicks Crew hopes to offer more products in more sizes by bringing together products from around the world. For example, while many of Kicks Crew’s retailers are located in Asia, most of the platform’s customers are based in the United States
“Platforms that market and sell other brands are in a unique position to be very consumer-centric,” said Katherine Black, partner in Kearney’s consumer practice. “You’re not tied to a specific style, price, or aesthetic, but can see where different customers are going and offer products that meet that need.”
Consumers have to pay extra for this access – shipping enough from $10 to $70 — but Kick’s crew aims to get the products to customers within two to nine business days.
Kick’s crew also bakes a guarantee of authenticity into the platform. Retailers are required to ship products to Kicks Crew facilities rather than directly to consumers, and the Kicks Crew team inspects products for quality and authenticity.
After Yip secured the $6 million funding in March this year, Yip said the platform will invest in additional global authentication and shipping facilities. Kicks Crew is currently opening or planning to open additional facilities in Tokyo, Korea and New Jersey.
Saunders explained that an online aggregation model like Kicks Crew’s works well in categories like sneaker and luxury spaces.
“Both sneakers and luxury are global categories and both have good margins and high prices, making them suitable for selling online despite the costs involved,” Saunders said.
Black added, “Any product category that has strong consumer demand and can generate strong interest and loyalty beyond transactional shopping can work for this model.”