In context of our GERMAN ISSUE, we talked to Daniel Benz, one of the country’s smartest sneaker sellers, about backslapping, competition and firstly being confronted with a limitedly growing sneakers market.
“I can still tell you today what shoes each of my classmates from elementary school was wearing!” Daniel Benz' penchant for trainers has been with him long before "sneakers" was a word in the official German dictionary. After majoring in sports (with a focus on economics), the idea for his store Asphaltgold was more of a coincidence because he wanted to take over the rest of a lease agreement for a small shop in downtown Darmstadt from an acquaintance. In November of 2008, Benz opened his sneaker store and only two months later his online shop went live. Placing orders, working the shop floor, packing parcels–Benz did all of it as a one-man-show in his first three years and only then did he bring help on board. From then on the business developed very rapidly–with more employees joining the store and then renting its first external warehouse. Today Asphaltgold has 70 employees, sends sneakers all over the world and generates annual sales in the eight-digit range, 90% of which is through e-commerce. Last year he also opened a second physical retail shop: At Asphaltgold Club (AGC) Benz and his team now also primarily sell clothing–also in the quiet city of Darmstadt.
When did you notice that your business was really taking off?
Never, actually. Of course I am proud of my team and sometimes I sit on my sofa and think to myself: ‘Wow, I’ve got a nice home and it’s because of the business,’ but with so much on my to-do list to take care of and so many ideas in my head and trying to be innovative, there were actually never any moments when we backslapped ourselves. That really is a shame, too! But I am in fact quite aware of our fortunate situation and know that I have the best job in the world.
Does it ever happen to you that you get up in the morning and are simply sick and tired of anything related to sneakers?
No, can’t say that. Of course there are times when I myself say: I am not very happy with that product just now and then there are times when I have reached the saturation point with something and don't see enough innovation. But that I get up in the morning and think sneakers turn me off, that has never happened before.
I [...] know that I have the best job in the world.
What do you feel you have done right? What is your biggest strength?
I think that what needs to be mentioned first, even ahead of my passion for sneakers, is that I am very well aware of how people function, what each person needs in order to be happy and who has what talent and where I should place various people near me. Our team has expanded organically and there were almost never any bad moves or disappointments. We’ve now got over 70 people and even today the personal rapport with each employee is there–even if it is not quite as close as it was in 2012-13, when there were ten people on the team. The worst thing I can imagine happening is to lose this familiar vibe at some point.
Do you find it hard to step away from the business from time to time?
I never took a holiday for the first six years. Three years ago I took my first weekend trip and last year I took nine days of vacation, and now I’ve just returned from my vacation. You really need to learn to let other aspects back into your life. That is not very easy and that can probably only be appreciated by other freelance professionals. Sure the saying is that you work to live and not live to work, but it would be dishonest to say that in my case my work and private life are not interwoven and hard to separate.
How do you manage to decompress, then–just book a holiday and force yourself to unwind?
In the meantime, I’ve established a good personnel structure around myself, which allows me to leave with a clear conscience. Two years ago, I still had the feeling that I had to make every decision myself and that colleagues were expecting that of me. But by now we are actually a very solid and relatively square enterprise which has firmly established structures. I know that, no matter what it's about, there is always somebody in the company who can make the decision. While on vacation for nine days, I didn’t get a single phone call and I only gave my OK on Whatsapp for a collaboration coming up in 2018 that had to be approved within two days, but that was it.
To just clear your mind, that is something I’ve always been pretty good at, just stepping away was my difficulty–I simply did not delegate anything. But I think I’m now moving in the right direction with that.
[...] it would be dishonest to say that in my case my work and private life are not interwoven and hard to separate.
Nearly 700,000 Facebook fans, almost 400,000 Instagram followers–Asphaltgold is one of the best social media performers in German retail, together with the major fashion industry players. How do you account for that?
We were fast out of the starting blocks. I set up our Facebook account right after I opened the store, and we were also on Instagram at a very early stage. I don’t think we ever overwhelmed our customers with the quantity of our posts, but rather tried to keep the quality high. For instance, we were the first in Germany to take on-feet pictures of our shoes. And of course at one point we then also decided to invest money. Also, sneakers are a very rewarding product: you can’t sell a trip with a photograph. But a pair of sneakers has an aesthetic appeal which is absorbed within milliseconds.
[There is currently an eight-person content team at Asphaltgold responsible for creating its own photo material for the Facebook, Instagram, Pinterest and Snapchat social media channels. Each month a five-digit amount is invested in digital marketing.]
After years of unlimited growth–what's the state of the sneaker retail trade like today?
For the first time, we find ourselves in a situation in which there is not only unlimited expansion in all areas of the sneaker market. I’m sure that there will be a bit of a shake-up over the next few months. One store or another which might have joined the market later may run into some problems and it will become a kind of “survival of the fittest.” I consider ourselves structurally well positioned along with five, six or seven other stores in Germany. These days, also the big online shops manage to market the topic of sneakers very well, meaning all players have to look for their niche.
What exactly do you see as that niche for Asphaltgold?
I feel that we know how to do customer service very well. We speak the language of our customers and know what they expect from us in terms of aesthetics as well as service. They notice that people working with us are passionate about the product and very closely involved in it. Our aassortment of sneakers and streetwear is very limited in terms of scope. That is why we can get involved in it deeper than bigger shops with many more product categories. Plus, I feel that we are quite innovative–such as with our Fitting Room app–and that is paying off.
For the first time, we find ourselves in a situation in which there is not only unlimited expansion in all areas of the sneaker market. I’m sure that there will be a bit of a shake-up over the next few months.
How did this, shall we say, “tense” market situation come about?
It is a luxury problem. The sneaker market has quite simply exploded. The target group got bigger and bigger and of course the brands responded to it. Earlier you had a highlight silhouette like the Nike Air Max 1 in two or three colors in the collection. Due to the extreme demand, the collections have been pumped up to the extreme and suddenly there were ten times more SKUs than before and of course every brand wanted their share of the pie. This caused the concepts to grow, the number of colors to increase, new innovations to be added etc. At one point you also noticed that the brands were trying to achieve greater efficiency with materials and production here and there, but customers were still willing to buy it. Ultimately there were five releases every weekend and it was always working out well.
For big players, it was more about distributing than actual selling because they were simply unable to meet the demand on the market anymore. A time came when releases got a little inflationary. While the hype phases between 2011 and 2014 arose as a relatively organic process, last seasons' hypes were planned in advance with blatant marketing machinery behind every focus silhouette. Sometimes the campaigns were so closely timed that the products had an even shorter lifecycle than before. And if you get the feeling that customers are already tired of a product after only six weeks, then purchasing product and clearing stock becomes difficult.
At one point you also noticed that the brands were trying to achieve greater efficiency with materials and production here and there, but customers were still willing to buy it.
How do you get out of that situation?
You simply have to make sure you have a clear focus–as a retailer and as a brand. Mark Parker, the CEO of Nike, recently announced that he will supply 25% fewer SKUs to the market across the board at Nike. That is radical, but I feel it is the right approach. It’s better to do less and do it right!
What are customers looking for?
When we first started our business, it was actually always about celebrating styles from the '80s and '90s. We’ve now long left that behind us. Customers want innovation, they want to see new things. And they are looking for something individual–that is why there are currently tendencies where high fashion and sneaker culture are merging. There are now also 14-year-olds who no longer see any individuality in a Jordan and choose to buy Balenciaga sneakers–they offer a certain amount of exclusivity already due to their price. The big players notice this, of course. Maybe a more selective approach simply needs to be taken again, not only when it comes to innovations but also to sales and distribution.
Do small brands also have a chance to get in the game?
Over the past couple seasons huge campaigns were run to generally show customers what they need. This free orientation wasn't really there for a longer period of time. That means that for brands, which do not have huge marketing budgets, it is a challenge to get noticed–this leads to new and interesting things. There is less effort going into trying to imitate successful products (which never really worked out well anyway). Instead, as a brand you really have to give some thought to how to connect with customers.
Are you concerned that the sneaker market hit a serious slump?
I see no end to the sneaker market at all, but you should not overdo things too much. There is a reorientation taking place. Of course there are customers here and there who are now turning to leather shoes, but we are not noticing this yet. I think it’s completely normal for people to start liking other things again if a topic was being talked about a lot. That is good for our market, too, and I don't view it critically.
What do you think is an area where you could push harder?
I think that where we could become stronger is emphasizing our personality, such as through Instagram stories. We can reveal even more about ourselves and perhaps tap into even more new channels that way. With the influencer movement, customers do not just want products explained to them by brands but also by a personality. We have this skill, so why shouldn’t we emphasize this competence even more strongly?
We could also step things up more in how we combine e-commerce with social media, and who knows, maybe in physical retail, too.
Does that mean there will be even more stores opening?
Never say never! I see far more potential in brick-and-mortar sneaker retail than in other areas. Sneakers are a product which works really well in conventional shops and you can simply explain performance topics there way better.
I've never tried to force things. If somebody were to come up to me and say: “Hey, Dani, let’s open a store in Tokyo”–why not? But there should always be a starting point. Once there is a bit of momentum, I am always prepared to really get it going. But I can say with certainty: I will never leave Darmstadt.
Where do you picture yourself being in 20 years?
Please stop asking me such difficult questions! [deliberates] As you can see, I never think about that. What I can definitely see happening is to get involved in the creative process more, be it in apparel or shoes.
A condensed version of this interview appeared in our GERMAN ISSUE. Find out more about its stars and shapers in the print magazine or check the digital magazine here.