The fervor for Nike sneakers was hugely instrumental in driving the phenomenon of sneaker reselling and collecting in the 1990s, but for decades, the athletic giant has had a policy to not acknowledge its presence in resale. That changed on Monday, with the brand announcing its first-ever in-house resale program, Nike Refurbished.
The program will see Nike taking back pre-owned sneakers from customers, inspecting and grading them for quality (like-new, gently worn or cosmetically flawed) and selling them at reduced prices. Nike is aiming to provide the program at 15 Nike stores throughout the U.S. by the end of the month and more by the end of the year.
Nike is consistently among the top two selling brands on multiple sneaker resale platforms, including StockX, Goat and Stadium Goods. And while those platforms will still be the ideal place to find the rarest, limited-edition sneaker drops, Nike offering its own in-house resale could bite into some of the sales of more mass-market shoes. And, with Nike’s considerable pedigree in the sneaker world, it could be the beginning of the brand taking a much more direct interest in the resale market.
A Nike representative wasn’t available to comment on this story.
Nike Refurbished will only be focused on sneakers at first, with equal emphasis on men’s and women’s footwear. It will potentially provide “new opportunities to discover a cross-category lineup of performance and lifestyle product” in the future, a Nike rep said.
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One small wrinkle is that there doesn’t seem to be any incentive for customers to return their goods to Nike. Most brands that have some sort of circular takeback program (which are growing in popularity) offer a $5 gift card, loyalty points or some other tangible incentive for returning goods. A representative from Nike wasn’t able to confirm if an incentive would be added to the program in the future. The program is intended for well-worn product that might otherwise go to a landfill, which wouldn’t be sellable on a platform like StockX, which requires all product to be in mint condition to sell. Nike is positioning Refurbished as part of its sustainability plans, alongside Nike Grind, which repurposes used sneakers into other rubber goods with partners like Lyft.
Incentives can be a powerful way to gain interest in a circular program. Eileen Fisher offers a $5 credit for every piece sent in, which the brand’s director of Renew Cynthia Power said helped it bring in more than 19,000 pieces in March. Without an incentive, Nike customers with better quality product will no doubt turn to selling it via a platform like Grailed, which takes only a 9% cut of the resale price, rather than returning it to Nike.
Resale has become an increasingly important part of the global fashion world, and the pandemic helped boost resale sales grow 25 times faster in 2020 than in 2019. Other brands have taken an interest in hosting resale programs internally, as well, but almost always, those in-house resale programs are actually outsourced to a third-party company that handles the logistics. Trove which powers the resale program of Levi’s and Patagonia, for example. The reason, according to Trove CEO Andy Ruben, is that resale is an expensive model to run without investing in the infrastructure to handle thousands of individual SKUs.
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“Nike’s move is just the latest signal that resale represents a sea change in how consumers want to shop today,” Ruben said. “Consumers love both the shopping experience and the value they get with resale. Strong brands know they need to own their secondary market, and I expect many more of them will follow Nike’s lead in the coming months and years.”
Ruben estimates that establishing a robust resale program without a third-party partner could cost up to $50 million. Nike is a rare exception, in that it can afford to create a program like this entirely in-house. Its most recent earnings report in March saw the brand’s revenue rise to nearly $10.5 billion, nearly half a billion more than the same quarter ending in March last year.
