StockX CEO Scott Culter join Yahoo Finance Live to discuss holiday shopping trends and the companies latest $275M fundraising round.
- You know you're doing something right when you successfully raise $275 million. That values your fast-growing company at almost $3 billion. Let's bring in somebody who is doing it right. That would be Scott Cutler. He is StockX CEO. Most people might talk about shoes when they bring someone like you in, but that's just-- congratulations. That's really a fantastic number that you've hit there. How do you stop it?
SCOTT CUTLER: Well, thanks, first of all. It's been a journey for us as a brand and as a marketplace. And I think this funding just represents the tremendous growth that we've experienced as a company as we're delivering this experience to a next-generation consumer that's seeking these very difficult to find, hard to sought after consumer products. And we are the platform of choice for these sets of consumers. So we're really excited about the opportunity that we have in front of us.
- So I'll [INAUDIBLE] bring in Richie Wade--
- --congratulations again. I wanted to ask about the secondary market, because we see Nike coming off just a great second quarter. Do you still think Nike and Jordan brand are going to continue to be king during this holiday season on the secondary market?
SCOTT CUTLER: So what's exciting in the world of brands today, driven by collaborations and unique drops, is that brands are exciting the customers. Nike is a great example of a brand that's been going digital, going direct to consumer. That trend of releasing products, scarce products, out into the marketplace plays into the resale marketplace.
It's why Wall Street expects that the sneaker resale market to be a $30 billion market opportunity by 2030. And it's the great brands in the world-- Nike, Adidas, and others-- that are releasing these products, again, at high demand for consumers. So we're very bullish on brands and brands releasing scarce product out into the market.
- Scott, you talk about Adidas, as well, and we all know about Nike. What are some of the up-and-coming brands that you're seeing that are really popping on the secondary market? Because us sneaker heads, we always want to know what's the next trend coming so we can stock up on them early.
SCOTT CUTLER: So when you think about brands, I'd say the biggest trend is collaborations. If you look at the top two Air Jordan products, that was the Jordan 5 off-white, the Jordan 4 off-white sale. Those are the top-selling Nike products, and they're also collaborations. Travis Scott is a brand now, but also as a collaboration across Nike, McDonald's, even in the game consoles market is an example of how a brand and collaboration can extend across product categories.
And for us as a platform, we're obviously a platform beyond just sneakers, and so we provide that opportunity to gain access to apparel. Some of the hottest selling products this holiday season has been electronics, as the new Xbox and Playstation consoles have been ripping on the platform, selling nearly one a minute. And that's been a trend, again, that you're seeing now across multiple verticals.
- You know, Scott, it's Julia La Roche. I have a question, and I think you might have an interesting perspective here. And this is not related to StockX, but I think it could be. We saw this phenomenon recently of a YouTube influencer, Mr. Beast, opened up these restaurants that just went totally viral. So I guess my question is, how do you think about the influencer side of things and kind of marrying that with commerce, e-commerce in this kind of moment? Where do you think that trend might be going, and how you all might tap into that?
SCOTT CUTLER: Well, the fastest-growing segment of these consumers is the next-generation consumer. We would define that as millennial or a Gen Z consumer. Gen Z is age 8 to 23. What they see out there is they're inspired by the artists, the musicians, the athletes. They see what's on their feeds or what they're wearing, and they're inspired to purchase. And the challenge is most of those items are generally not available from the brand or not available from retail.
And so that next-generation consumer is going towards items that are scarce that able to express their own identity. And then-- and that's really what they want. So they're moving away from items like fast fashion and going into brands that have a way to represent who they are. These brands are also creating, as I've said before, scarce items that drive this scarcity model in the market.
And so that next-gen consumer has an expectation that they see it, they're inspired by what they see out there in social networks and in gaming, and they want access to the product. The challenge is, in most traditional models, you just can't get it. And so you'll come to StockX principally as a place where you can find that item that you can't find anywhere else.
- Scott, on the marketing side, what is StockX doing to show customers that you guys are just much more than sneakers?
SCOTT CUTLER: So we have customers in over 200 countries and territories around the world. And for us to be able to deliver that experience to the customers, we've been expanding our authentication centers around the world. We've expanded by about 50%, launching three new authentication centers in just the recent months that allows us to deliver a real consistent brand experience, StockX brand experience to our customers.
And so when we think about marketing, we're really trying to attract that next-generation consumer who's inspired by these items of current culture, and that those items are now across multiple categories. And so when we're marketing and we're creating personalized marketing programs towards and targeted towards that consumer, we're really looking at the things that, for us, started in sneakers, and then we launched into adjacencies such as apparel and watches and handbags and the streetwear.
And then we found we had a great opportunity in collectibles, and recently, in Q4, it's been all about electronics. And so we're finding those seams where the next-generation consumer has an appetite for other categories, and it's our opportunity to personalize the site experience to market to the needs of those customers in an ever-expanding set of demand across multiple categories.
- Scott, you brought up the different areas that you have expanded into. I'm actually looking as I'm talking to you at watches. I'm curious, do you have a sense of what the next big thing will be, or will it always be primarily sneakers?
SCOTT CUTLER: Well, when you look at our business, a majority of our business today is sneakers, but some of our rapidly growing new categories are in the things that we just introduced in the last year. In collectibles, we started with toys, and now in trading cards, which has been growing rapidly. Electronics as a category, again, one of our fastest growing adjacent categories to the sneaker market.
And what's interesting is I think people always associate StockX with sneakers, but 31% of Gen Z identifies as a sneaker head, but this particular Gen Z consumer has appetite across multiple categories. And it's those categories that we see a tremendous effort for us to strategically expand into.
- Scott Cutler is StockX CEO. Reggie Wade is a journalist here at Yahoo Finance. Both of you, thank you for joining.