StockX seeing surge in demand for Jordan 11s, Playstation 5s, Yeezy hoodies, Tesla cybertruck toys

StockX chief Economist Jesse Einhorn joins Yahoo Finance Live to discuss holiday trends on the popular current culture secondary marketplace and what that says about the U.S. consumer

Video Transcript

JULIE HYMAN: Well, secondary market sales have been a big and rising trend even before the pandemic, and things, like many things, sort of accelerated amidst the pandemic.

Let's bring in Jesse Einhorn. He is StockX chief economist. Of course, that's a secondary market. Initially primarily known for sneakers but now has expanded to a number of other items as well.

And, Jesse, I want to ask you about holiday spending on StockX because, you know kin of the old-school, traditional way of thinking is you wouldn't buy something either that somebody else had owned-- although in many cases, the stuff on StockX is pretty pristine, right, and people have bought it to resell it. But what kind of holiday trends are you guys seeing?

JESSE EINHORN: Yeah, so everything that trades on StockX, right, is in dead stock condition. It's in 100% mint, brand-new condition. So that's the first thing.

But the trend we're seeing were, you know, a lot of trends that we already expected. For instance, we're seeing a huge surge of demand around the Jordan 11 Cool Grey that released about a week ago. It is an iconic colorway of a very rare Jordan silhouette. For people like me who grew up in the '90s watching Jordan play, it just hits that sweet spot of nostalgia and price point, and it's been a massive hit on StockX. It's just one of the best sellers we've seen in a very, very short amount of time.

We're also seeing collaborations-- out of the box collaborations from brands like Yeezy and The Gap score really big. There's a line of hoodies that Kanye West did with The Gap that are some of the top traded apparel items on the site.

We've got collectible toys like the Tesla Hot Wheels collectible, which is like a smaller version of the Cybertruck. That's selling really well. Again, kind of a nostalgia play for people who want to go back and play with Hot Wheels but also want an updated look on that toy.

So those are some of the trends we're seeing. Again, nothing super unexpected. These are all products that were selling really well before the holiday season, and now they're just selling better than ever.

BRIAN SOZZI: Jesse, this stuff ain't cheap. What's your read on the health of the US consumer?

JESSE EINHORN: Yeah, I mean, you know, obviously there's been a ton of concern about supply chain. There's been concern about inflation. And in both of those cases, I think secondary markets provide an interesting release valve and an alternative to traditional retail shopping. They aren't as vulnerable to the same kind of pressures and disruptions that we've seen in traditional retail, right?

So when you've got a secondary marketplace that's powered by buyers and sellers, you know, in 200 countries around the world and tens of thousands of them all negotiating at once, you know, it really allows for a much more efficient market pricing consumer experience.

And so I think what you're seeing with the pandemic and all of these disruptive forces that a lot of people are exploring e-commerce and, more specifically, secondary markets as a way to do their holiday shopping and buy the things that they want.

JULIE HYMAN: And, Jesse, you were talking about the sort of efficient marketplace here, but I imagine sometimes that efficiency can still push prices higher, right, if there's enough demand and not enough supply. So are you guys seeing the same kinds of inflation trends in a secondary market as we are seeing in primary markets of all kinds?

JESSE EINHORN: I mean, absolutely. At the end of the day, right, we're dependent upon products that have to come from the primary market, that have to come at retail. But at the secondary level, right, when you have thousands of buyers and sellers undergoing what is essentially a negotiation every single day, right-- you know, that's what bidding and that's what people on StockX do, right? It's essentially like tens of thousands of little negotiations that take place every single day around every single product.

And what that means is that even though the prices may be, you know, a bit higher than retail, they are the efficient market price, right? And people that buy on StockX can buy with confidence knowing that the price they're paying is at least the market price, and that's, in some ways, much more efficient than a single retailer determining what the price is, right? It's much more-- it's much harder to game the system. It's much less vulnerable to certain inflationary pressures.

And so, yes, some of the products are quite expensive, but I think what buyers really care about is just knowing that they're paying a fair price, and that's what you get on a secondary market like ours.

JULIE HYMAN: I mean, I guess what I'm asking is has the fair price gone up from a year ago? I mean, I know it's hard because you're not necessarily selling all of the same product, right, but as far as you can tell, the apples-to-apples comparison you can make from now versus a year ago or two years ago, particularly, have you seen prices in general go up?

JESSE EINHORN: You know, not noticeably, not on StockX. And if you look at, say, the Jordan 11 release that I spoke of earlier, that comes out every year. There's a big Jordan 11 or at least it's almost always the biggest release of the year. It's almost always one of the top-five sneakers that sell on StockX each year, and the price of that sneaker this year is right around what we've seen in terms of historical trends.

And so, yes, there are some products that are a little more expensive. I think there are some products are a little less expensive. The PlayStation and the Xbox, two really popular products on StockX, are actually like a little bit lower in price right now because there have been a number of restocks on the primary market. You know, it could be that we just haven't seen that inflationary pressure trickle up or trickle down, depending on how you want to think about it, to the secondary market. But right now, prices are right about what you'd expect given historical trends.

BRIAN SOZZI: Jesse, what are some of the biggest trends you see on tap for next year?

JESSE EINHORN: Yeah, I think we're going to see a lot more of these kind of collaborations that I spoke of earlier when I talked about Kanye West teaming up with The Gap. There's a lot of big legacy brands like The Gap, like Hot Wheels, you know, brands that have been around for decades but want to reach this next-gen Gen X consumer-- Gen Z consumers, rather-- Gen X as well, I suppose.

And they're doing that by partnering with these of the moment artists like Kanye West, Cardi B in the case of Reebok. In the case of Hot Wheels, it's Tesla. You know, these are brands that are newer and fresher and have more appeal to a younger audience. So I think you're going to see more of these partnerships between legacy heritage brands and these new artists and new brands, and that's going to fuel a lot of the excitement and demand on the secondary market.

JULIE HYMAN: There's also a shoe purchase today that caught our eye. I don't know if you had a chance to see it, Jesse, but Crocs is buying a company called Hey Dude, which I hadn't even thought of. Frankly, I think the shoes look, like, sort of orthopedic, but I guess that fits in with the Crocs. I don't know. How have things like Crocs been doing on the platform and the sort of, quote, unquote, ugly-shoe trend, if you will?

JESSE EINHORN: Yeah, you know, beauty is in the eye of the beholder, so I don't want to-- you know, I don't want to be casting aspersions on Crocs, but certainly they've had a reputation for being somewhat ugly. They're one of the most shockingly impressive success stories we've seen on StockX over the last couple of years. It was a brand that was completely off our radar two, three years ago. It's now one of the six or seven most popular brands on StockX.

Crocs has partnered with-- you know, has done a lot of the collaborations that I was speaking of just in the last answer. They partnered with Post Malone, with Chinatown Market, with the Grateful Dead, Luke Combs, a ton of really, you know, exciting and different artists. And they put out these products that people want and that trade for much higher-- you know, much higher quantities on the secondary market than anything we'd seen in the past.

And this is driving a lot of excitement on the primary market as well. So if you look at Crocs, you know, normal Crocs that sell, not these limited-edition collabs, they're selling in much, much higher quantities, and the company is doing really, really well. And that kind of shows the virtuous interdependence between primary and secondary market, right? These limited-edition hype collabs help fuel excitement around a brand, and that allows the brand to thrive in all of its releases, not just its limited, more hyped releases.

And so Crocs is pursuing that and executing that strategy just brilliantly. I think that's going to be something we're going to see in the next year is more brands like Crocs kind of follow that same model because it's worked out so well for them.

JULIE HYMAN: It has indeed. I know Brian Sozzi is a big fan of the story from a stock perspective because we have seen that stock perform quite well.

Jesse, thanks so much, and happy holidays. Jesse Einhorn is StockX's chief economist. Appreciate it.