StockX CEO Scott Cutler joins Yahoo Finance Live to discuss which products on the marketplace have the hottest demand, dynamic pricing, and consumer spending during Black Friday and Cyber Monday.
BRAD SMITH: More shoppers are turning to the secondary market this holiday season with StockX over 500,000 searches for top brands like Jordan 4's and Nike Dunks. Joining us for more on what to expect this Cyber Monday, we've got StockX CEO Scott Cutler.
Scott, great to have you here with on-- with us on this momentous occasion, I'm sure, in terms of the site traffic and the volume that you typically see. What are some of the top searches that are coming through here on this Cyber Monday?
SCOTT CUTLER: Well, we kicked off Black Friday with a spin to win challenge giving our customers the opportunity to win unique prizes, such as apparel for the year, sneakers for a year. And Black Friday was up on a year-over-year basis, despite the fact that it was a challenging and continues to be a challenging consumer environment.
I think for us, the top sellers continue to be in the category of sneakers-- Nike brand, Jordan. But we also saw a lot of cross-category shopping this year across accessories, apparel, electronics, which was really exciting to see.
BRIAN SOZZI: Scott, how widespread is the discounting on the site, if any?
SCOTT CUTLER: Well, we're a marketplace. And so that marketplace, we connect sellers and buyers. Our promotional activity is more aligned to trying to drive sellers to sell more and create a better pricing opportunity for our buyers. And so since we're not in the process of selling our own inventory, it's coming from sellers, we want to create the right incentives for sellers around the world to reach our buyers, which come from over 200 countries and territories around the world.
JULIE HYMAN: Hey, Scott, it's Julie here. So I guess I'll ask this question a different way. What's happening with pricing on your platform? I see the numbers in your report. And it looks like most of those are the number of sales of this shoes, if I'm reading it correctly, versus the pricing. What is happening with pricing? Are you seeing any kind of decrease in the year-over-year rate of price?
You know, we-- obviously, as we're looking at inflation broadly, it's not about prices going down. It's about prices going up at a lower rate. What are you seeing on your platform?
SCOTT CUTLER: So as a real time marketplace, price always reflects supply and demand. And so dynamically across the portfolio, prices change and they change by the minute. Certainly, for those products that see the highest demand, you see the highest price appreciation certainly relative to retail. I think this year for the more value conscious consumer, you're seeing a lot more purchases or transactions.
You know, particularly like in the sneaker category, one of our top sellers would be the Nike Air Force 1 white-white, which would be a lower price point opportunity. I think in other categories consumers are able to find below retail pricing opportunities.
I'd say across the board, again, prices are very dynamic. But for the value conscious consumer or the hype piece consumer, they have the opportunity to make choices around pricing, particularly because it's so dynamic on our site.
JULIE HYMAN: Well, OK, so what choices are they making, Scott? I mean, surely you must have-- you know, I understand what you're saying about price dynamics. But surely you have some insight into, oh, there's more demand for the lower priced sneakers right now versus the higher. Or even the in-demand sneakers are not topping out as high as they were before. What kind of signals are you seeing?
SCOTT CUTLER: Well, the holiday releases are always a big driver of traffic. And Jordan has a tradition of releasing in-demand colorways just in time for the holidays. This year one of the styles that created the most buzz and actually the highest price premiums was the Jordan 1 Chicago Lost & Found, a classic colorway. It was a top five throughout the weekend.
The number one seller was also a Nike product. It was the Panda Dunk, which has held the number one spot throughout the weekend. But it was also the women sizes and the grade school sizes that really saw traffic.
But we had some surprises, Crocs this year. Maybe you were into the clog Sasquatch Croc. This was just released this month. It was a top 25 item. New Balance ranked as top five brand overall on Black Friday, which was really great to see, a classic colorway in the 550 silhouette was a top seller.
And then even in apparel, we saw shoes, which has been a new category for us, Uggs boots and slippers, really being again a top seller going into Black Friday. But really we saw a surge over the weekend as well.
BRAD SMITH: I am not in the cozy Sasquatch camp or demographic here, Scott, but what I am interested in and was interested in was that Jordan 1 launch, the Lost & Found, which there was a lot of controversy around it because some of the sneakers were found to have mold on it. Was that the case at StockX, for some of the partnerships that you've had with Nike over the years as well? You've been able to have access to some of that inventory to sell through to your site.
Were you seeing any of those complaints either emerge on the platform? And what do you have to do to rectify some of those issues as well?
SCOTT CUTLER: Well, we have a comprehensive approach to make sure that the products that are being received by the buyers, we verify those products. And we go through a rigorous process of verification to review all sorts of different conditions.
So for example, we examine whether or not it's the right size, it's the right product, if there's any manufacturing defect. In this case, if there was anything wrong with the sneaker, we would stop that product from ever getting to the buyer-- any signs of previous wear or, in fact, if the item is fake.
This last year, we rejected more than 300,000 transactions from getting to the buyer. Products worth more than $100 million in value. And so that's our way to ensure that, that buyer is getting exactly the product that they want through our verification process.
BRAD SMITH: Scott, just lastly while we have you. Over the last several weeks here, we've had some controversy within the broader kind of sneaker touching landscape, especially when you think back to kind of Adidas and Yeezy and then even Balenciaga in their latest ad campaign coming under fire for that. StockX is a platform that kind of sits at the intersection of some of that inventory that does get resold as well.
And you know, I wonder if there are any substantive changes that in those instances, StockX decides to make better material to either how those products are listed on the platform? Or just how they are sold through? Or any changes in the customer and purchase intent that you're seeing on the platform, when these issues do arise?
SCOTT CUTLER: StockX has zero tolerance for anti-Semitism, racism, hate, or discrimination of any time-- of any kind. And while StockX has a wide range of products that are inspired by creators, artists, athletes, their views, their actions, their beliefs are not always a reflection of our own.
But also as a resale platform, products that are being sold on our platform or from individual sellers, not the actual brand or not the actual athlete. And so we don't have any corporate partnerships nor direct financial ties to those that have been caught in the controversy.
But that being said, I think consumer preferences are always reflected on the site. And so you'll see demand, again, grow or wane in products that, quite frankly, are no longer popular.
JULIE HYMAN: Scott, good to see you. Scott Cutler, CEO of StockX, thanks.