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Apr 21, 2021

If that sounds like an odd idea, you may not be up on one of the hottest new trends in apparel retail. The company has announced the launch of Refurbished , a program that takes sneakers returned by customers within 60 days of purchase and inspects and cleans them up for resale at a lower price to the brand’s loyalists. “I think the main driving force behind Nike’s refurbishment program is to bolster their green and environmental credentials,” wrote Neil Saunders , managing director at GlobalData, in an online discussion on RetailWire last week. “They want to be seen to do their part to minimize waste. There is also a degree to which this allows them to have a small resale program which, if successful, they could expand. There is a lot of consumer interest in resale and secondhand, so Nike is sensible to test this area more.” Photo by Justin Sullivan/Getty Images Getty Images Nike is initially making Refurbished shoes available in 15 of its stores with plans to expand to more locations this year and beyond. Oher experts on the RetailWire BrainTrust agreed with Mr. Saunders that the move was primarily about environmental positioning. “The footwear space has a foundational sustainability problem, just as fast fashion does. Many of the shoes that are made today cannot be easily taken apart and recycled sustainably,” wrote Yogesh Kulkarni , CEO of Antuit.ai. “Also, sustainability is important enough that many consumers have started to take notice and brands have to address it head on. On the other hand, the second hand market is growing rapidly for apparel and footwear given the ease of use of digital platforms. Nike is bold enough to address it head on.” MORE FOR YOU The market for secondhand sneakers has grown significantly in recent years, with the high end, in particular, taking off. Pre-owned Nikes are highly prized in the market. Sneakerheads spend hundreds and even thousands of dollars to purchase some of the brand’s iconic models. A recent article on Six Figure Sneakerhead listed specific Nike shoes as 11 of the top 12 highest priced sneakers in the current resale market. Nike puts returned sneakers into three categories, depending on their condition: “like new” shoes worn only “for a day or two,” “gently worn,” and “cosmetically flawed.” Items in this last designation could have some defect as a result of an error in the manufacturing process, or perhaps a smudge by the previous owner. In all cases, Nike inspects returned sneakers and refurbishes them as close to brand new as possible before giving them their condition designation and sending them off to one of the brand’s stores for purchase. Pricing for each item is based on the model and its relative condition. Shoe boxes include messaging telling shoppers what conditions the shoes are in. Each of the refurbished models is covered by Nike’s 60-day wear test. Customers can return the sneakers at any point during that time if the shoes do not meet their requirements. Some on RetailWire’s BrainTrust noted that the concept is in keeping with developments in other areas of apparel. “Gently used items are a bit of trend, as evidenced by the growth of The Real Real, ThredUp (now partnered with Gap ), and Poshmark,” wrote Dan Frechtling , president of G2 LLC. The brand is promoting the new service as not just a less expensive means for loyalists to buy sneakers, but also as part of its Nike Zero program to achieve its zero carbon and waste goals. Returned sneakers not included in the Refurbished program are either donated to Nike’s community partners or recycled for use in other products. In this way, experts like Venky Ramesh , AVP of consumer products, retail and distribution at Capgemini, see the service as bringing together a couple of different contemporary trends. “Nike could have sold refurbished sneakers long ago, but they probably did not in the fear of impacting their branding,” wrote Mr. Ramesh. “But now, with consumers placing a premium on purpose-driven organizations and the Gen-Z/Millennials’ love for used products, the timing is right for Nike to make money from returned products while upping their image further.” Nike was recently named as the most valuable apparel brand in the world for the seventh consecutive year by Brand Finance . But for at least one expert on the RetailWire BrainTrust, moves like this could threaten that designation. “Although there is a resale sneaker market, attaching the official brand to it seems like either a greedy or desperate move,” wrote consultant Ken Lonyai . “They want to be an aspirational brand that is moving away from third-party retailers, yet here they go creating a low-end retailer-style discount rack.” …  Read More George Anderson has over 20-years executive level experience in retail, business-to-business and consumer marketing communications.Mr. Anderson is recognized for expertise in the areas of consumer trend analysis/marketing, retailing, e-commerce and new media. His experience includes work with top consumer goods companies from around the world including Anheuser-Busch, Coca-Cola, Eastman Kodak, Kimberly-Clark, Nabisco, M&M/Mars, Procter & Gamble and Unilever to name a few.Previously, Mr. Anderson served as president and creative director of the IdeaBeat Creative division of IdeaBeat.com. His duties included creating Online Profit Guides and Company Spotlights recognized as "Best of the Net" by About.com for a blue-chip list of consumer goods manufacturers and technology companies.In addition to IdeaBeat Creative, Mr. Anderson also served as editorial director and columnist for MarketingBeat.com; a consumer trends and marketing content site developed for executives of retailing and CPG companies as well as affiliated industry suppliers. He also wrote the popular weekly StreetBeat column on retailers and the stock market that appeared on IdeaBeat.com.Before joining IdeaBeat, Mr. Anderson created a successful sales and marketing communications and custom publishing company called Not Your Average Agency.Mr. Anderson's experience includes eight years with Progressive Grocer Associates/Maclean Hunter Media, where he held a variety of marketing services and sales management roles. His assignments included work in the company's four divisions including Progressive Grocer, Frozen Food Age, Retail Technology, and Retail Insights (Supermarket Insights and Convenience Store Insights video division. )George has client side experience as well, having directed the marketing and store merchandising activities of United Security Supply Company, a wholesaler and retailer of electronic security products with annual sales of $100 million. Included in his responsibilities were P&L management of 50 company-owned stores including vendor negotiations, space and sku management, store merchandising and all company sales promotion, advertising and stakeholder communications. Read Less