Supreme-acy

“No offense, but if you don’t know about Supreme, maybe it’s because you’re not supposed to”

as quoted by the New York Times and unlike other high street fashion brands who aspire to make large profits, expand and gain popularity, Supreme is one that contains none of these motives to make a name. Supreme has a different perspective and follows the road not taken, unlike any other apparel company, to achieve growth. The secret behind the $1 billion brand being able to sell out everything from a plain white t-shirt with a logo to any accessory, ranging from just $42 to $300, is scarcity. The commodity theory explains that scarcity increases the value of anything that can be possessed. But unlike other brands, Supreme uses it in a way that’s not traditional. Supreme’s products are scarce but affordable, in turn, the brand loses out on profits, but gains hype.

The brand makes use of a very useful yet risky strategy to market and make a name for itself, and is perhaps dominating the strategy. Although Supreme is not a luxury brand, it is more than often counted amongst the same league as that of luxury apparel brands like Chanel and Louis Vuitton.

Supreme drops only two collections in a year. Products from each collection is released weekly, every Thursday. The products are revealed online before the launch, creating hype before the release. Once a product is launched and goes out of stock, it is generally not restocked, making it more exclusive and inculcating value into it. High demand is responded with limited supply, creating affordable exclusivity and increasing the value of the product for the buyer. This whole process is termed as hype branding, according to ​Cheddar, an online video journal channel. The demand for the products can be met by the supplies, but Supreme chooses not to do so, which has led to the upcoming of a secondary market where the products are sold by resellers at prices as much as 5–8 times the original retail price.

An article on ​Medium,​ an online journal (well, I’m sure you know what it is), states that Supreme could have easily generated a large revenue by increasing either its inventory or prices, instead it smartly opted for the ‘exclusivity approach’, and this has worked amazingly for Supreme. With its product’s pricing as high as 1200% more than the retail price on the secondary resale market, Supreme has achieved the brand momentum and hype that any other streetwear brand could ever dream of.

The strategy of less is more has been successful for the brand in terms of enhancing the value of their commodities and that of the brand itself. The brand has avoided being a sellout, which resulted in Supreme branded clothing to always being sold out. The products are claimed to be extremely photogenic and who doesn’t want to look great and aesthetically pleasing on their Instagram, right? With celebrities and models showing off their Supreme clothing, the brand further makes the products more desirable amongst the masses, and eventually makes the products of even higher value.

Another great strategy from its arsenal is the collaborations with elite brands like Louis Vuitton and Nike. These partnerships increase the value of the brand and help it grow and become more valuable. The impressive strategy of Supreme has led to more expensive elite brands follow the same route of launching more limited-edition lines of products, with similar objectives.

The strategy followed by Supreme can be fairly risky as the cost of buying inputs in less quantity is high, thus large margins are to be made in order to make profits. The limited supply model creates a sense of urgency amongst the consumers and thus makes more people demand more. Owning Supreme merchandise is about feeling like people belong to a special capable group of individuals who own Supreme, amongst the rest. As long as Supreme is able to induce this sense of urgency amongst the people, this strategy is bound to work in favor of the brand.

To keep the consumers attracted to this hype, Supreme needs to be able to release new lines of products consistently, so the hype sustains alongside with the demand. The strategy of marketing goods based on limited supplies can be misleading in the sense that the company is losing profits and would require the brand to make product lines that are fresh and up to date with ongoing trends in order to sustain itself. Failure to accomplish this means the designs are not in trend and would not be able to gather hype around its name, thus it will not create the hype. The brand is less known to the world, increasing its online presence could be nothing but beneficial for the brand, would help further boom it’s demand in the market. The brand only has twelve stores throughout the globe, with five being in Japan, it’s presence in countries like China could further expand its market.

Regardless of the risks, the brand continues to excel and grow through ways that are not traditional. Targeting buyers using the hype branding technique has perhaps been a golden idea for the brand, even though James Jabbia, the founder of Supreme, says that they produce only as much as the production allows them to and that they are not trying to become a “hard to get brand”. The brand has received recognition at the highest levels and has been at power with other giants of the industry who make larger profits with large numbers of stores around the globe and spend millions on technology, unlike Supreme. Limiting supplies also results in nonexisting inventories which means that the brand will not be stressing over selling out their products at cheaper prices via sales or price slashes, maintaining it’s prestige. Supreme has been working with this strategy since its inception in 1994. The hype and demand are built up over the years, which means they stuck to their business model of never re-stocking and hot-selling products for 25 years, as said by MSNBC’s journalist, Thomas Roberts. What established as a skateboard store, has now elevated to one of the most elite high street fashion brands in the world, and is often named alongside brands like Calvin Klein, Off-White, Louis Vuitton, Gucci, etc. Supreme sells out every released product from skateboards to t-shirts and

accessories. Famous publications like GQ and Complex have consecutively awarded Supreme as the brand of the year. All the success is based on a recipe that works perfectly in the favor of Supreme, boiling down to four essential ingredients; scarcity, authenticity, identity, and perception.