Lifecycle Adjustments: From Sustaining the Position to Remapping the Position.

Of course, knowing how Supreme’s brand has been built, we have to wonder, can it be sustained?

The answer depends how we frame the question.

Are we talking about maintaining the original brand values or are we taking about maintaining Supreme’s profits?

Both may actually be independent from each other. Let’s see why:

Despite all the ‘hype’ that media has created around the acquisition, Supreme had already changed its focus and positioning well before the acquisition. It hasn’t been the original Supreme for quite a while now. Yet it still has been successful.

Ok, that contradicts what business schools have been teaching for ages, right?

Yes, it does. Here is what’s happening: streetwear Youtuber Reggie Casual made the crucial point: “the brand is no longer a community but a commodity for up-and-coming would-be streetwear enthusiasts. It's almost like we're entering a whole new chapter let alone a book of Supreme.”

What he is saying is essentially that Supreme has entered a new market. The mainstream market.

Supreme

Over its lifetime, any businesses will target markets in different stages of maturity. Along this journey, the success factors that the business requires will change.

If we don’t want to compare apples with oranges, then we have to make the distinction between these different markets. Along the lifecycle of the business we need to view each market as a separate market with different customer needs and different success factors.

This comes back to what I wrote earlier about Tesla vs automotive OEM’s. Tesla is not operating in the traditional automotive market any more, it has created a new market with new success factors. In this new market, success is less about automotive engineering, but more about software, connected systems and design.

There is nothing surprising here, this is a normal evolutionary process. Many big brands started as subculture brands. Then they got adapted by mainstream consumers, often making them unattractive for the initial subculture group.

This Subculture to Mainstream Cycle is happening across verticals.

How does this cycle come about and why is it so repetitive?

The cycle is driven by different needs of different ‘customer’ types. For subcultures, freedom, autonomy and authenticity have priority. For the mainstream customer, the need for safety has a higher priority.
This manifests itself in monoculture of Starbucks coffee shops versus unique neighbourhood coffee shops. It manifests itself in similar-looking stock photos of happy people on corporate websites in contrast to the visuals of art magazines like Kaleidoscope.
I have written about the conflict between security and freedom in my Programme on Constant Redefinition, diving into Abraham Maslow’s thoughts on the battle between our defensive forces and growth trends. For those who are curious to dive deeper I will provide a reference at the end.

Where is Streetwear?

Now that we have explored the different market states, back to Streetwear. Where does it stand? Streetwear itself has become a mature market, and the acquisition of Supreme is just a reflection of that process.
Streetwear has moved closer to fashion. Brands like Off-White, which are positioned in between streetwear and fashion as well as collaborations between streetwear brands and fashion brands illustrate this trend.
This new market is bigger. The profit expectations of the owners will have factored in the bigger potential of this mainstream market.

As Reggie Casual points out, this new focus may lead to “more stores easier acquisition, less limited editions more stock, a move to third-party sellers”. VF has done that with other brands it owns.

In other words, the brand will move from scarcity to wider distribution.

Distribution vs exclusivity. How many customers can you serve?

Now people are crying foul, saying that Supreme will lose it’s brand value once it is distributed widely.

People tend to think wide distribution automatically leads to brand dilution. Yet this is not the case.

A brand, which already is established as a cultural icon can widen its distribution without losing its edge. It actually needs to do this if it wants to reach wider audiences at those locations that these audiences frequent. If you want to sell a significant number of high value art books, then you cannot just rely on art book stores. Not all the people who make up your potential audience will visit these stores regularly. To reach a broader market, you need additional distribution channels, such as Amazon. To sell Moleskine notebooks to all your potential customers, you similarly need to move beyond stationary stores.

When widening distribution, the brand will ensure that the brand’s identity is maintained through the positioning and display in the store. Iconic brands usually have their own flagship corner within the store. The access to the flagship store has just moved from the street level to the shop level.

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In addition, as we have explored, the scarcity has moved from the brand to the product. That means a brand, which is widely distributed still can have exclusive limited edition products. Art books have always been sold that way. While offering a wide edition, they are offering an upfront, high value limited edition. This serves the purpose of price targeting, but it also lifts up the perceived value of the brand. Simply put, the Mercedes A-Class will benefit from the halo that the S-Class and Maybach generate.

Brand dilution starts when the brand distributes through retailers which are known to be category killers, killing value through pricing.

If you see a fake Rolex on a street market, your perception of the brand’s value might actually increase. But if you see the real Rolex discounted on Amazon’s Black Friday sale, your perception of value will change. Then hen you start to assimilate it with commodities.

State of Supreme / Where is Supreme in the cycle?

Supreme is well advanced along that cycle. It had already lost its core audience a long time ago. As Reggie Casual states, “it's lost its cool factor a while ago and has entered into mainstream status symbol”

Supreme had extended beyond the street community, leveraging its initial street credibility. When they started collaborating with Louis Vuitton it might have become obvious that this is no more the typical skater whom they are targeting.

One might even argue that Supreme has been an oxymoron from the beginning. Selling goods, mostly to young boys for top dollar has never really reflected Barbara Kruger’s anti-consumerist and often feminist message. At least that’s what artist, Leah McSweeney must have felt, who went full-circle by borrowing Supreme’s logo to make a feminist and anti-consumerist statement again. Imagine her surprise when the autonomy-loving Supreme then tried to sue her for copying their logo, which again they copied, excuse me paid homage to Barbara Kruger. Before it gets too confusing, let’s move on.

So Supreme has been a successful mainstream streetwear brand for a while. Whether Supreme succeeds or fails will depend most likely on how long the streetwear trend remains in the mainstream market, and that is something that isn’t easy to tell.

But however streetwear will develop, the lessons on selling intangible goods that it provides us with will remain.

As we have seen, the tools of selling the intangible need fine tuning, like a good jazz quartet.

FURTHER READING

On Subcultures

Magnum: Documenting Style and Subcultures

  • Here you will find “An exploration of how societies are shaped by their subcultures, with a curation of images from the Magnum archive by Ekow Eshun ”

Clarintelligence: ‘Disruption’ talk fails to disrupt the old ways of doing things? Talk about ‘New Markets’ instead

  • My Article about Tesla versus traditional automotive companies

Clarintelligence: Roadblocks to Adaption

  • this dives the conflict between security and freedom and into Abraham Maslow’s thoughts on the battle between our defensive forces and growth trends.

Geoffrey Moore: Crossing the Chasm

  • Geoffrey Moore has described how businesses move from early adopters into the mainstream and how each customer group has different needs.

Artist Steve Cutts, points out the downfalls of overconsumption:

Harper's Bazar: The Death of a Once Great City - The fall of New York and the urban crisis of affluence