Eddy Lu, GOAT CEO & Co-Founder joins Yahoo Finance Live to share how the sneaker economy is vastly growing and what consumers should expect from Cyber Monday sales and the holiday shopping season.
ZACK GUZMAN: It's been record after record when we think about e-commerce shopping here in this pandemic in 2020, a lot of question marks around what that's done for Black Friday demand as well as Cyber Monday demand. So let's check in on that with the founder of the sneaker-focused and Andreessen Horowitz-backed online shop GOAT, the co-founder here and CEO Eddy Lu joins us here alongside Yahoo Finance's Reggie Wade here too.
And Eddy, you have 30 million global members here on the platform, more than 600,000 sellers on GOAT. And we've been talking about how e-commerce has been historically record-setting here, very strong on a tear, even before we got to Black Friday and Cyber Monday here. So what have you seen this shopping season and how strong demand's been on your platform?
EDDY LU: Hey, Zack. Definitely happy Cyber Monday to you as well. I mean, Black Friday really kick starts our holiday season. And this year has been no different in terms of the size and how big it's been as consumers shift more online. I mean, our Black Friday-- every single year, the GOAT Black Friday is the event, the sneaker event of the holiday season. This year was no different.
It started in 2015 when we launched the Black Friday promotion that put us on the map and crashed our server. So every single year, we try to make it bigger and better. And this year, eight days of hosted trivia to give thanks to the community-- we had hosts such as Saweetie, Kyle Kuzma, A$AP Nast. And we gave away prizes, tens of thousands of prizes from GOAT credit all the way to a Ferrari Testarossa. So I hope you enter it and earn some prizes.
But what we saw was 2 billion tickets entered into our raffle. That's B, billion with a B. And we've seen that the online-- the consumer is stronger than ever. And they're just excited to get special and unique gifts and presents such as sneakers and sneakers apparel.
REGGIE WADE: Eddy, Reggie Wade here. Unfortunately, I didn't win the Ferrari. But I wanted to know-- everyone talks about Yeezys, the Jordans. Those are usually the top sellers of the holiday season. I want to know what are some of your sleeper picks. What are some of the shoes that the mainstream consumer really doesn't pay attention but a lot of sneaker heads are flocking to go to try to get?
EDDY LU: You know, collaborations are an increasingly important part of the sneaker ecosystem. You have Travis Scott, for example, collaborating on his Dunks. You have even Ben & Jerry with the Chunky Dunky Dunks. And then you have sacai with the Nike Waffle trainers. So I really think collaborations are big. And some of that Dunks I've mentioned-- I've been increasingly wearing Dunks throughout this year. And I've seen a lot more people wearing Dunks.
But like you mentioned, this year is definitely the year of the Jordan. You have the documentary that really boosts sales. I mean, 76% increase week over week in Jordan sales when the documentary aired. And then have the holiday season with Jordans. You have the Jordan Fire Reds that launched on Saturday. And of course, Jordan-- every single year launches a new Jordan 11. This year is no different. And it's actually the 25th anniversary of the Jordan 11. So they have a special 25th anniversary Jordan 11 sneaker this year.
- Eddy, no question there's a lot of sellers out there who are looking to maybe get a little extra cash, especially in a year like this year. What does the demand look like on the sales side right now?
EDDY LU: What's great about a marketplace like GOAT is that we really service both sellers and buyers really well. And on the seller side, what we've seen is that because the sneaker economy has grown so big-- I mean, in 2015, we were estimated at a billion-dollar total addressable market for the sneaker economy. But because GOAT's really leveled the playing field, the sneaker economy has grown to $10 billion and to $30 billion over the next few years. That's really helped out sellers in getting liquidity for their sneakers. And as the market grows, our seller base increases. And they get a lot more liquidity through GOAT.
REGGIE WADE: Eddy, in 2018, GOAT Group-- you guys merged with Flight Club to have that brick-and-mortar retail experience. How is that going amid the pandemic? And are you looking to expand the number of Flight Clubs in different cities once we get to the other side of this?
EDDY LU: Of course retail right now is a little challenged. And our Flight Club stores are still closed. But what we see is that destination retail is still so important. I mean, you walk into a Flight Club. It's a completely different experience than walking into a traditional sneaker retailer. You actually see the iconic shoes, thousands of shoes in our grail walls and our grail cases that you would never see at a traditional sneaker store.
Because a sneaker store might have 200 shoes on the wall, and it's only this year styles, rather than-- you know, you see the 1985 Jordans. You see the Yeezy samples. You see a bunch of sneakers, and it's become a sneaker Mecca. And we do think destination retail is here to stay. So we will expand Flight Club in terms of the retail side of things.
But even online, now that Flight Club stores are closed, we've seen a dramatic shift in terms of web sales on Flight Club. And sales have increased over 100% on Flight Club year over year alone.
ZACK GUZMAN: Eddy, one other question here that I had just because we have heard reports-- you look at a few of the channel checks. And you think about how Black Friday has been BMO Capital Markets said that there were fewer discounts, which could be a boost to profits. You're talking about a lot of the creative things that you guys have been doing on GOAT to get people excited to shop there. Have you seen less of a need to maybe cut prices here just because of the demand on shopping online, the way that that's gone? What is your, I guess, take on what we're hearing from them?
EDDY LU: Well, for us, Black Friday isn't really a transactional day for us. Of course, we do a lot of volume that day. But, like I mentioned earlier, Zack, it's about giving thanks to the community. So we want to give value to our customers. And it wasn't a, hey, let's discount less because of certain factors, external factors. For us, it's, we want to say thanks to our community and educate our community as we lead with a point of view on fashion, culture, and style.
So for us, it's less of a transaction, more of a celebration. And that's why we gave away a Supreme drum set, a Ferrari Testarossa, and $100,000 in GOAT credit. So our discounts and our values and our deals have stayed the same throughout this.
- Eddy Lu, CEO and co-founder of GOAT. It's good to talk to you. Appreciate your time today.
EDDY LU: Thanks so much.