This blog revolves around the brand that redefined streetwear and party created the ‘DROP CULTURE’. No we are not talking about RIPNDIP (although you should check them out) we are talking about the iconic red and white Supreme. We will also be unfolding the unconventional strategy that led a streetwear brand to a billion dollar valuation and a cult fan following.

The origin story of Supreme begins In the early 1990s with James Jebbia a man who was a burgeoning fashionista in New York City’s underground scene, who worked his way up the ranks at Parachute and opened the proto-streetwear stores Union NYC and Stussy — the latter with surfer and surf-wear pioneer Shawn Stussy. However when Stussy left the retail game, Jebbia was looking for his next big move and found it in a storefront on Lafayette Street.

Supreme opened in 1994 with a staff of edgy, anti-commercial kids with an attitude.They started off as a skateboard store in New York City. A skateboard store, perhaps the most successful skateboard store in the history of the world, owned by a man who didn’t skate and didn’t care much for the sport. They were confident, fearless, opinionated, and unapologetically authentic — traits that carried into the overall energy in and around the store. It was intimidating, yet intriguing — and ultimately the workings of Supreme’s cult-like appeal. A brand that doesn’t classify anything as limited, but only releases short runs and never re-releases a product. A fashion icon that swears it’s not a fashion brand. Supreme is an intriguing, tangled web of contradiction.

What has led to Supreme’s ascent and dominance in the clothing market?

Well It can be traced back to a carefully crafted strategy that has capitalized on
○ The Art of limited supply
○ Unique approach towards customers
○ Collaborations to increase brand hype
○ Leveraging Resale and social media growth to provide free marketing

The art of limited supply

Supreme has mastered the art of limited supply. Since its inception, Supreme has always maintained a small inventory, and never released a ton of pieces. It doesn’t sell in large retail stores, hence keeping its availability limited. This maintained a sense of authenticity , while driving up desirability and demand. At this point, any other brand would’ve charged more premium prices and raked in the cash. However, here’s the strategy that differentiates Supreme from the herd. Instead of charging a premium price for their highly desirable products, they kept them relatively cheap and affordable. This might seem like a bad strategy as it leaves money on the table that could have easily gone into Supreme’s pockets however, Supreme was able to convert that foregone revenue into significant hype that led to more brand equity. With more brand equity comes more demand which drives up resale prices, thereby creating more hype. It’s all interconnected and Supreme has mastered it.

Supreme Store

Collaborations to increase the brand hype

Collaborations with the right partner can create brand awareness, increase brand momentum and hype for both the parties. In the early days of Supreme’s existence, its Founder noticed something interesting. Customers that shopped in his store in Soho in New York were often wearing designer clothing along with Supreme clothing. Then Jebbia realized that customers liked shopping high-low by pairing clothing from Supreme with brands such as Louis Vuitton. As a result over the years, Supreme has collaborated with many parties including Nike,Rolex, Playboy, Japanese Red Cross Society, MTA etc. Their greatest brand collaboration however was between Supreme and Louis Vuitton in 2017. This increased the existing hype around Supreme and at the same time helped Louis Vuitton to target a different customer segment.

Leveraging Resale and social media growth to provide free marketing

Resale clothing is one of the fastest growing segments of the apparel market with the number of second-hand buyers estimated to increase by 40% by 2022. Many of the customers that race to get their hands on a Supreme drop often resell their merchandise online for as much as ten times the original retail price. Items selling at such a high premium only adds to the cachet of the brand. Then once someone buys Supreme on the resale market often the person who was once a buyer becomes a reseller generating an even higher markup for the merchandise. This fuels an ongoing cycle in the resale market that makes the brand even more exclusive and popular. Social media is a key enabler for the resale market as social media makes it easier to market exclusive merchandise. In the past if someone had an exclusive pair of sneakers, only the owner’s friends and acquaintances knew about it. Now the latest Supreme collaboration can easily be seen on Kendall Jenner and by over 100 million of her Instagram followers.

Even if the Supreme logo and the inexplicable craze for it are parodied in memes (The language of the youth), it enhances the curiosity about the brand in a light-hearted and non-invasive way. Marketing ultimately is the process of the cultural transmission of ideas. Honestly speaking when a brand becomes a meme you know its a huge brand. The brand concept is propagated every time someone patiently waits in line for the rare Supreme drop, every time someone hunts for the best deal in the secondary market after speculating about the price they have to pay on an online forum, and every time an item is posted on social media. Larger companies like Nike and Adidas have made note of Supreme's appeal among the youth and, in several instances, have tried to emulate the drop culture. A good example would be Kanye West’s Yeezy drops which we talked about in our last blog. Yet in the eyes of the urban youth, none of these brands have attained the same level of authenticity and desirability that Supreme has.

Supreme Kanye

P.s. Does the Supreme leader wear Supreme?

Special thanks to Soham Kulkarni for his amazing article on medium which served as the basis for a huge chunk of this blog!

Additional links and sources

How Supreme went from a small NYC skateboard shop to a $1 billion global phenomenon

The next billion-dollar streetwear brand

The hype machine: Streetwear and the business of scarcity