How Kicks Crew sells sneakers online by working with retailers

Armed with new funding, sneaker marketplace Kicks Crew aims to help more mom-and-pop sneaker stores launch a digital presence.

Kicks Crew lists, ships and authenticates products from these retail partners in what it calls a “business-to-business to consumer” model, similar to Farfetch. For a given shoe, shoppers will see products that are, unbeknownst to the customer, being sold by individual retailers. The model, co-founder and COO Ross Adrian Yip explained, helps retail partners quickly expand their online customer base 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 decrease in foot traffic and declining product sales, many have turned to Kicks 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 slice of sneaker sales.

Kicks Crew was founded in 2008 as an online shoe retailer with its own product offering and pivoted to its business-to-consumer model in 2018. Yip said Kicks Crew gives retailers an easy way to try out sales online without having to build the service in-house, as well as to expand to a global audience. The company’s gross merchandise value has increased fifteenfold in 2021 compared to 2020, and its traffic has increased more than fivefold year-to-date since January.

Kicks Crew recruits retailers by taking care of the complications of e-commerce for them. Kicks Crew handles all retailer onboarding itself and handles all online customer logistics. Kicks Crew declined to share specific retailer names, citing partnership deal structures, but said it currently lists about 40,000 SKUs on its site.

“[We] enable them to sell online to reach a wider audience,” Yip said. Sellers control their product, Yip added, only shipping it to Kicks Crew once sold.

Kicks Crew integrates retailers’ in-store inventory into its online system. When a sale is made, the retailer is notified and responsibility and ownership of the product passes to Kicks Crew. Once a retailer ships the product to Kicks Crew, the platform will handle all other product processes like shipping to the customer, returns, and any cross-border trade issues like currency changes or global rates. Yip declined to share exactly what percentage Kicks Crew makes from product sales, but said it varies by shoe and style.

Yip explained that many sneaker retailers are able to sell out flagship products quickly (like a Nike Air Force One or a Reebok Club C, for example) but sometimes end up with excess product of more unique styles or colorways. As sneaker brands like Nike begin to move away from retail distribution toward direct-to-consumer sales, smaller partner retailers often have little bargaining power to return any unsold product to brands.

“We’re seeing up to 70% of our retailers’ products struggle to move,” Yip said. “You have a fair amount of product that flies away, and the rest you kind of have to go through a sales cycle… They’ll start selling product to wholesalers or retailers, and the discount is big.”

Yip said most of Kicks Crew’s retail partners are chains, usually with more than a dozen physical stores. The majority of Kicks Crew partners are in Asia.

“The typical qualities we look for in retailers are a willingness to understand that the landscape is changing [towards online]“, Yip said. “Ideally, it is better to work with one larger partner than to work with 50 smaller partners.”

Neil Saunders, chief executive of GlobalData, explained via email that Kicks Crew’s distribution model could help retailers “expand the audience”.

“Customer acquisition costs are extremely high and rising, so exposure through a site like Kicks Crew can be a helpful way to increase existing sales,” Saunders said. “It can also be an effective way for a more localized brand to read a global audience.”

“For some products that are selling very well, the take might be a little lower, it helps us attract traffic,” Yip said. “For products that are a bit harder to sell, it will be higher or if we know we are one of the only places to sell the particular product, 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. While many Kicks Crew retailers are in Asia, for example, most of the platform’s customers are in the United States.

“Platforms that market and sell other brands are in a unique position to be very consumer-centric,” said Katherine Black, consumer practice partner at Kearney. “They’re not beholden to any particular style, price or aesthetic, but can see where different customers are moving and provide products that meet that need.”

Consumers must pay extra for this access – shipping ranges from $10 to $70 – but Kicks Crew aims to deliver products to customers within two to nine business days.

Kicks Crew also builds an authenticity guarantee into the platform. Retailers must send products to Kicks Crew facilities rather than to consumers directly, and the Kicks Crew team verifies products for quality and authenticity.

After receiving the $6 million in funding last March, Yip said the platform would invest in additional global authentication and shipping facilities. Currently, Kicks Crew is opening or planning to open additional facilities in Tokyo, Korea and New Jersey.

Saunders explained that the online aggregation model like Kicks Crew’s works well in categories like the sneaker and luxury spaces.

“Sneaker and luxury are global categories and both have good margins and high prices, making them suitable for online sales despite the costs involved,” Saunders said.

Black added, “Any product category that has a strong following and can generate strong interest and loyalty beyond transactional purchases can work for this model.”

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