New Store FormatsOnline Strategy

Lottery Shopping: Supreme Store Review

By November 8, 2019 December 9th, 2019 No Comments
Supreme San Francisco

Supreme, a street fashion online brand known for its popularity, high prices, and black market of resold products, recently opened a new physical location in San Francisco. By disrupting the traditional fashion release model (Fall/Winter and Spring/Summer collections), Supreme is able to stay ahead of the competition and elevate its brand to foster a cult-like following. To understand how this system works, I visited the store on one of its “drop days,” when it releases a new selection of products for purchase. In order to buy anything on a release day, I had to sign up for a mailing list and receive a virtual ticket for entry into the store.

Supreme registration email
A Supreme registration email; spots are gone within minutes

History of the Brand of Brands

Supreme started as a skate shop in downtown Manhattan in 1994, and it grew to become a meeting space for local professional and amateur skateboarders. The store sponsored various events and skateboarders, becoming a cult hit. In addition to arranging its interior to accommodate a large number of customers entering with skate equipment and backpacks, Supreme sold clothing, shoes, and skateboard equipment. The brand became so popular that it eventually expanded to Los Angeles in 2004, and it opened its 12th store two weeks ago in San Francisco. Whenever the brand opens a new store, which happens every few years, the store quickly turns into a hub for the local skateboarding community. The question is, how can a brand based on skateboarding fetch such high prices for clothing?

Supreme New York Store
The original NY store, closed now after 25 years

Supreme collaborates with various fashion designers and brands, including Louis Vuitton and Lacoste. In 2017, Supreme and Louis Vuitton held a fashion show exhibiting work from their collaboration. The brand’s logo, a simple red box with “Supreme” in white letters, became a coveted status symbol in skateboarding and street fashion circles. Foreign buyers would purchase articles of clothing at markups of hundreds of dollars, especially for rare items. Supreme retains its rarity by producing a limited number of each item it sells, and then retiring them forever. Outside of clothing, Supreme sells novelty items with the brand’s logo stamped on it—items that are highly sought after by collectors. Some examples include an axe, a snow sled, boxing gloves, an air horn, a Honda dirt bike, a bike lock, and a harmonica.

In order to sell all these limited edition items, the company established a “drop” system, wherein prospective buyers would sign up online for a chance to purchase them in-store. This prevented trampling and mass confusion when these items would release. As with many designer brands, there is also an entire system of aftermarket sales available online—for a massive markup. The company has taken extreme action in order to reduce these aftermarket price increases, and this was evident when I shopped in-person at the store.

The Drop Day Visit

When I arrived, there was already a line stretching down the block in front of the store. This location only opened a few weeks ago, meaning that it still had novelty. In fact, there was an article published just this week predicting that this store will revitalize this particular shopping district. I made my way to the back of the line and made sure to follow the rules I had researched online. These rules are strictly enforced by the store and its bouncers, called “heavies,” as a means of preventing reselling and black market trades. This strict etiquette is another unique part of the shopping experience at Supreme. Some of the unofficial rules include the following:

  1. No talking to other people, in line or in the store. Communication can be misinterpreted as an attempt to strike deals and resell merchandise.
  2. No phones or pictures unless a press permit is obtained beforehand. Again, this is an effort to prevent black market sales.
  3. No selling or transferring of virtual entry tickets.
  4. Buying multiples of items is subject to strict review by store staff.

While observing these rules, I slowly made my way inside to see the different products for sale.

Supreme San Francisco Opening
The San Francisco store, opening day; Source: Complex

Once in the store, I was able to see the full selection available. The selection wasn’t a surprise to me, as Supreme releases its weekly inventory online prior to each “drop day.” Items range from $20 to well over $300, and a simple t-shirt can go for $50 in-store. Rarer items, such as store opening exclusives, sell for much higher prices online, and Supreme clothing becomes a collector’s item even before leaving the store. During my visit, employees stood throughout the store, watching carefully for any violations of the unwritten rules.

I didn’t have much time to explore the store, but I was able to purchase a hat without being kicked out of the store. People exiting were directed away from the incoming line, and I was not able to take pictures for the entirety of this shopping experience. The “drop day” event that happens weekly is shrouded in mystery, and the only time it receives in-depth media coverage is at a store opening. Having experienced this retail lottery system, I began planning my return visit to review the store during normal hours.

Fake Supreme Stores, Real Supreme Prices

Supreme’s limited releases make it difficult to buy their products outside of the U.S. and Japan, but some stores have taken this opportunity to sell an alternative. Supreme Italia, a company unrelated to the New York brand, began opening stores in Italy with products that bordered on counterfeit. Because the Supreme logo is so easily replicated, fake products are readily available on the internet. These physical stores, however, made it much easier to buy into the Supreme brand and its cult-like following.

After a successful lawsuit, Supreme New York forced Supreme Italia to close its doors and dispose of its products. These stores weren’t ready to give in to the demands entirely, though. Supreme Italia has since opened physical stores throughout Spain under the guise of “Supreme Spain,” and the largest copycat store opened in Shanghai, China earlier this year.

The products at these stores are still valued at the prices that Supreme New York charges, typically upwards of $60 for branded sweatshirts and accessories. Compared to the large markups that foreign buyers may pay for genuine items, however, this is a heavy discount.

Private Label Lessons

After years of growth, it would seem that Supreme is now able to stick their logo on any item and sell it for a premium. How can this be applied to grocery retail? For one, most grocery chains have spent many years developing their brand, and these efforts are finally paying off in the form of their private label.

Consumers have shown that they are no longer tied to national brands when it comes to food. The continual release of new private label brands, from Raley’s store brand restructuring to Target’s new Good & Gather, makes it clear that retailers are investing and providing value to customers through their brand. In many circles, being able to shop at Whole Foods (who have taken steps in reducing their Price Image through strategic investments in produce) is similar to wearing Supreme-branded clothing in public. The cult-like analogues we see in Wegmans or Trader Joe’s shoppers is evidence enough of what a brand can mean to customers.

Supreme customers interact with the brand long before they enter a store. From email lists to virtual tickets to third-party websites, these shoppers are investing their time into the Supreme brand. At GroceryShop 2019, we learned from speakers that retail consumers are already interacting with brands outside of the physical store in a variety of ways. In our Biggest Takeaways from the conference, we saw that strengthening your brand is key to reaching this new kind of customer: “With the coming of digitally-native brands and the power of influencer marketing, the near future may see consumers who may not even go to stores to acquire what they need.”

For more information on new store formats, you can read our overview of the product-less department store, Nordstrom Local, here. For more information on brands and the future of grocery retail, you can watch our latest video with Marcia Webb of Nielsen here.

David Esparza

David Esparza

Marketing Specialist at Engage3