Supreme Streetwear and the Business of Selling the Intangible. What Drives Value?

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Consumer attention has become the most sought after item of our times. In a noise-dense environment, such as ours, the skill of generating attention has become a valuable art form. The advanced attention artists palette includes the creation of what’s commonly known as “hype”. A more subtle term to name it is building ‘halo’.

Hype is special in that it has a multiplier effect. There is not only the hype itself, there is also the hype about the hype. Such as for example the hype around the question as to whether the streetwear brand Supreme can maintain its ‘hype’.

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Of course, there is a backstory. Supreme the streetwear brand which has been synonymous for ‘cool’ - according to its CEO and the media - has recently been acquired by VF corporation, a publicly listed holding company of several lifestyle and workwear brands. Prior to that, Supreme was owned by a private equity fund.

And of course, neither a publicly listing nor private equity ownership serve well to create an instant perception of ‘cool’. Which is sufficient to trigger a public debate around the sustainability of this ‘cool’ under new ownership.

To understand as to whether Supreme will stay ‘cool’ under new ownership, we need to understand why Supreme has been perceived as ‘cool’ in the first place. We need to understand what it really is that they are selling. What business are they in?

What Business is Supreme really in?

So what is it that Supreme is actually selling? What is the real value proposition that drives the value of the product?

Obviously they are selling clothes. Yet, in today’s world, clothes luckily have become a commodity. Still, people line up in queues at Supreme. And even more so, the function of clothing alone does not justify the price of € 499,- for a pair of corduroy pants.

Some say, Supreme sells “cool”. A study by the  University of Arizona examines why shoppers perceive a brand as cool. They identify 10 traits, such as “originality, authenticity, rebelliousness, energy, and aesthetic appeal”. Sometimes, it’s called autonomy or “independent and uncompromising attitude” as a Quartz article states.

The problem is, consumer motivations are complex, and a bunch of adjectives are insufficient to explain what really makes a brand attractive.

After all, Chuck Norris movies were launched to be ‘cool’, too. Yet, not his movies but Chuck Norris jokes have become a global movement. In contrast to this you will hardly find  Chuck Norris movies on your Netflix recommendation list. Thanks to these jokes, people possibly love Chuck Norris more than before, turning him into an even stronger brand. However this barely is the type of ‘cool’ that the original movie producers had in mind. This illustrates that consumers cannot simply put into pre-determined buckets.

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But here’s the real problem with these traits such as ‘authenticity’: they take the perspective of the company that is selling. This perspective doesn’t help us understand consumer motivation and decisions. People rarely say “today I’m going to go out and buy myself a bit of rebelliousness.”

These traits are features, but none of them focus on what the customer really needs, none of them describes a specific human need and a value proposition that addresses this need.

Then what’s at offer that justifies the value of € 499,- for these corduroy pants?

Let’s split this question into two parts.

First we’ll see what kind of value the company offers to customers.

Then we will see how that value is signified. The mark up of € 400,- that the pants cost more than the regular pair for € 99,- pants is an intangible value. This is something that you cannot measure, put on a weight, or provide an ISO certification for. Because of this the signification and implementation of that value becomes crucial. That’s why we will look at the tactics that Supreme applies to manifest this value in the hearts of consumers. We’ll see how they sell the intangible