StockX CEO: Footwear is seeing 'triple-digit growth' on the luxury resale market

The value of luxury resale markets is expected to grow exponentially in the coming years. Currently, back-to-school shopping and collaborations between brands or artists are the core trends encouraging consumers to fill up their online check-out cart. StockX CEO Scott Cutler sits down with Yahoo Finance Live to discuss the consumer-cultural trends that are driving growth in resale markets as part of the weekly series "Retail Evolution: The New Era."

"We're a platform that's powered by the people, and we use that power to harness effectively our lens of what current culture represents," Cutler says, adding: "New Balance, which narrowly missed the top five among fastest growing, but it is the only sneaker that ranks both in the top ten in terms of fastest growing but also the top ten best-selling sneaker brands on StockX."

Cutler uses footwear sales as an example to illustrate the dynamic between pricing and value that resonates with consumers, and how StockX could leverage generative AI models to optimize its platform and sales data.

This post was written by Luke Carberry Mogan.

Video Transcript

- Second-hand luxury retail has exploded in the last few years.


The global market is expected to grow to a value of about $39 billion this year according to data from Statista.

One of the companies at the forefront of the resale game, you guessed it, StockX.

And joining us now to share the big trends that he's seeing is Scott Cutler, StockX CEO.

Scott, always a pleasure to speak with you and get some of the insights around this part of the seller's economy here.

So what are some of the trends that are really jumping out to you at this point in time?

SCOTT CUTLER: Well, we recently released a report we call Big Facts, and it's brands making moves.

Despite the tough macro environment that a lot of the consumers are facing today, there are many brands that are showing growth year on year and across categories, sneakers, shoes, apparel, accessories, collectibles, again that are breaking through and inspiring this next generation of consumers.

And this report highlights 25 brands that are making this ranking of the fastest growing brands on our platform.

- And Scott, I want to ask you, though, about so we've been having conversations about a more choosy consumer.

And even when you think about your luxury reseller, there's still higher costs there when you compare to say, just buying I guess a non-name brand bag or even you see some of the department stores doing some of this resale business as well.

What are you gearing up for when you take into account pricing heading into the back half of this year?

SCOTT CUTLER: So as a marketplace and as a marketplace that reflects real time with data and transparency, what consumers both supply and demand looks like, prices on our market are moving dynamically.

And I think particularly in a market like this where there is a shift from the consumer to value-conscious purchases, there's still brands that are able to inspire that consumer.

And they're using things like collaborations to be able to drive that consumer, which still wants to express their passion, their interest, and their personalization in what they wear.

And so on our marketplace, not only do we reflect the changing value of the prices, but also a reflection of those brands that are breaking through with consumers in this market.

- Yeah, I see several sneakers in that back wall that I've missed on a few of the apps that show not go mentioned here, at least for the time being.

And that's kind of pushed me over to StockX in the past and many of the other platforms that are really moving this business forward here.

So now, we think about this kind of environment where going in back-to-school season, what part of that kind of shopper mindset does StockX see come its way when you've got a student that's trying to just look hot look fresh on the college campus or perhaps some kid that's in K through 12 and parents want to help him pony up for one of the old Jordan concords or something like that?

To the extent that back-to-school shows up in StockX numbers, is there any data that you've seen to suggest that you're also welcoming in that consumer?

SCOTT CUTLER: Well, we're a platform that's powered by the people, and we use that power to harness effectively our lens of what current culture represents.

And a couple of things that I would highlight as people are going back to school and parents or kids are shopping for the newest trends, I think what we're seeing is a shift.

And this is why we highlight these new brands.

Brands like On, HOKA, Salomon, New Balance, are showing tremendous growth among this new generation of consumers.

They're leveraging these collaborations with really interesting brands to inspire that consumer.

And we expect these trends to continue through Q4.

And sneakers is another example.

New Balance which narrowly missed the top five among fastest growing, but it is the only sneaker that ranks both in the top 10 in terms of fastest growing but also the top 10 best-selling sneaker brands on StockX.

And so this is a reflection of the shift in the consumer.

But also I think a trend that we would probably see in the ramp that we've already seen in back-to-school shopping but also sets a tone for what possibly could be the top-selling, top-growing brands going into already talking about it, the Q4 holiday season.

- And Scott, I want to ask you outside of sneakers, I'm not a sneaker head personally, so what trends are you seeing in terms of footwear there outside of sneakers?

SCOTT CUTLER: Yeah, if you're not into the core sneakers, there's still things for you.

Again, fastest-growing UGGs, Birkenstocks, Crocs have been in the rotation.

UGGs for example, has been the number one fastest-growing in shoes, Birkenstocks number two.

Both have seen triple digit growth in 2023.

Birkenstock, for example, boosted by a collaboration with Fear of God.

And UGG saw also a really strong growth.

I think if you look out into other areas, I'll take collaborations in other things.

McDonald's coming up with a new collaboration with Palace on back of a collaboration with Cactus Plant Flea Market on back of what they did with Travis Scott and Cactus Jack.

Again, brands trying to find that pocket of where they can inspire consumer and actually create products that are really interesting for this next generation.

- We got to hustle to our finish and we want to squeeze a few topics in.

First and foremost here, the trade down or at least how customers might engage differently during times of discretionary spending downturn, it looks different on a platform like StockX.

It could come in the form of perhaps a longer listed time on the platform or perhaps looking at the actual price that somebody else paid in relative or in relation to what the sale before that.

And so there's a lot of last sale data as well that you and your own background and how the company has been able to move forward over the years has integrated into that experience.

All that said, what does that data telling you about where the consumer is actually either pushing back on price or more cost-conscious?

SCOTT CUTLER: Well, as a platform, we've always believed in transparent pricing and dynamic pricing.

And that dynamic pricing is absolutely a reflection of two things.

One, supply in the marketplace.

So going back to econ 101, when there's more supply, prices come down or when there's less demand, prices come down.

And I think we're seeing both macro trends play out.

And so you see that reflected in the price of many of the products that have traded on our platform for a longer period of time.

But again, you see pockets where the demand is really high relative to supply.

And in those places, you see in the resale market prices spike where there is that high level of consumer demand.

So StockX represents both sides of that argument.

And I think generally speaking, I would still say it's a tough macro environment.

But again, we use this report to highlight those brands that are able to break through and find that pocket of high demand to inspire that customer.

- And then Scott, while we have as well, there's been a lot of talk on the street about what this IPO markets, what this environment is right now.

How does that look for StockX?

Do you kind of look at the companies that are coming forward and making their debuts and say, you know what?

This seems like a good time.

This seems like an environment that we'd feel comfortable entering into.

SCOTT CUTLER: Yeah, it's still a tough macro environment for the capital markets and for StockX.

We remain laser focused on investment in our platform, investment in our network to improve the customer experience, and expanding our platform internationally as well as the brands and categories that we're focused on.

So we're focused on the things that we can control, which is really, how is it that we can drive growth on the platform overall?

- And Scott, I want to ask you, speaking of just a tough environment, how do you keep customers from going to say The RealReal, or eBay or Poshmark to find that specialty sneaker?

SCOTT CUTLER: For us, since the very beginning, what we've been focused on is really not only having a platform that reflects current culture, but also a trusted platform within current culture.

And so verification as an example, has been a key part of our value proposition.

We're a marketplace, so we stand in the middle of the seller and the buyer to verify every product that's sold on the platform.

And we have a long history of rejecting a lot of products that don't meet that verification standard.

In fact, over $400 million worth of products since 2016 that have not met our standards, and that leads to an experience overall that's a trusted experience.

And where we don't get it right, we also have a buyer promise that backs up that statement and that promise to consumers, and we'll make it right in the event that we don't do it right.

And so it's the combination of those things that distinguishes StockX from other e-commerce platforms.

- You said so when you don't get it right.

So let's say I'm looking at a pair of Nike, Dunk Low-- sorry, again, I'm not a sneaker head.

But let's say I get this pair and I'm like, this is not what was represented.

What are my options?

Can I return it?

What's my option there if I don't like it?

SCOTT CUTLER: Yes, you can return it.

We have a buyer promise and a guarantee that if you, for example, received a product that you didn't think was represented correctly or that we didn't do that opportunity right, you can actually contact StockX.

We have chat, we're rolling out phone.

And you can contact stock and return that product in the event that we didn't deliver on that buyer promise.

So you've got the guarantee of us doing the work to make sure that you get that right product.

And then the fact that you don't feel that the promise has been lived up to, that you have the opportunity to get your money back.

And so you're protected in either scenario.

- Scott, we've had a lot of conversation, and people are probably tired of hearing in some senses, about generative AI.

But I think about the processes and the operations that StockX has and the verification of the seller and the product itself.

All of these things combined, is there a play where generative AI or any type of artificial intelligence can be leveraged within StockX and that thus protects some of the margins, especially as you do think about what a potential IPO or at least introduction to investors in the street and what they would be demanding in those margins, what they would expect in the future?

SCOTT CUTLER: Whether it be machine learning or AI, it's powered by immense data sets.

And StockX as a platform is powered by data and real time data and historical data that we made transparent and visible on the platform.

So we leverage that data for everything from personalization of the experience as well as to making sure that we can stay in front of the game of verification.

We use that new generative AI in things like customer service and code development.

And so we're really excited about how those trends can power a better customer experience, a more responsive customer experience in the platform itself.

But again, it powered by an incredible data set that we have of current culture, of products that are trading on the platform to, again, make our process, service, and promise better for the customer over time.

- Scott, if those Jordan concords behind you your size 11 and 1/2, I'm just saying, feel free to drop them in the mail.

I'll shoot you up.

SCOTT CUTLER: Got them for you.

- Not cool.

That's so messed up.

OK, Scott, we're going to have to leave it there.

I mean, I guess I have to become a sneaker head now.

Scott Cutler, thank you so much.

StockX CEO, we appreciate it.