I’ve been thinking about the brand and the ostentatious father for some time now, but only decided to write an article after Ball announced his company would not only enter the shoe industry, but launch its first shoe ever—the ZO2—at an exclusive luxury price point.
Conventional wisdom suggests that Ball is ridiculous for asking consumers to pay $500 for a pair of basketball shoes, let alone shoes coming from an unestablished brand, with an unestablished professional (Ball’s son, Lonzo) as its beating heart.
(Perhaps Ball believes Lonzo will live up to the hype, and become the NBA’s next young superstar thereby justifying the exorbitant price for the shoe?)
But for the sake of argument, let me try to validate the price point Ball and his brand have set for the ZO2.
Like most branded products, brand equity is a key determinant of price point for a new product entering the market.
(To be clear, I define brand equity as the premium (max dollars) a customer is willing to pay for a branded product based on the perceived benefits received. For example, the difference in cost between a top-tier Nike running shoe, and a similar running shoe produced by a lesser known brand represents Nike’s brand equity in the running shoe market.)
Brand equity can be derived from physical benefits of a brand’s products (like higher functionality or craftsmanship) or it can be tied to non-physical benefits (social elevation, economic distinction, etc.).
When you assume the average pair of new Nike or Adidas basketball shoes costs around $100, it becomes readily apparent Big Baller Brand feels there’s approximately $400 of brand equity (benefit) to be derived from purchasing the ZO2 shoes.
But is there, really?
I’d like to take a closer look...
While I have yet to physically touch them, photos of the ZO2s suggest there is no functional benefit, as compared to the top-tier basketball shoes from major brands. Yes, the shoes are probably well-made, but from a pure performance standpoint, nothing about the ZO2s seems truly different as compared to a pair of Jordan’s or D Rose’s. So, I have to conclude Ball’s brand equity isn’t based on functionality.
Maybe the equity is based on some economic benefit?
Ball might argue the shoe could become a rare collector’s item based on the exclusive price point and possibility of Lonzo becoming an NBA superstar (hey—it worked for the Jordan brand). In this narrative, the shoes appreciate over time, and a $500 investment today becomes a lot more valuable down the road. Unfortunately, this justification for brand equity is too heavily based on speculation and uncertainty to be considered plausible.
Emotional benefit could validate some of the brand equity—the sneaker market is certainly populated with consumers willing to pay $500 to feel like they’re joining an exclusive club. And there are certainly huge Lonzo Ball fans out there, willing to pay $500 to enjoy an emotional uplift derived from supporting their favorite basketball player. But, by and large, the sneaker market caters to younger consumers (25 and below) who generally lack the disposable income to pay $500 for a pair of shoes. The few that do have the money are going to be few and far between.
So, essentially this segment—the segment most likely to pay for emotional benefit—is largely priced out. (To be fair, there could be affluent adults with high disposable income, and an affinity for basketball shoes…but how many of these consumers are out there? Not nearly enough is my guess.)
There could be social benefits justifying the brands assumed equity, but these benefits are very tricky. A brand’s voice, positioning, personality, political stance—these are just a few of the factors that determine a brand’s social benefit.
What does Big Baller Brand represent?
The answer to that question determines the brand’s ultimate social benefit to the consumer. In some circles, Big Baller Brand might be perceived as cool and exclusive, in others circles it may not. For this reason, it’s exceptionally hard to claim social benefits justify BBB’s brand equity—particularly considering the brand itself is still in the nascent stage.
Based on the above, emotional benefit seems to be the most promising justification for brand equity here. But will it be enough benefit to actually convince customers to drop half a grand on a pair of basketball shoes? That’s a question I hope to answer in the coming weeks as I try to research who the Big Baller Brand consumers are, what they value, and how they define themselves.