Big fashion brands can learn a lot from upstarts

For Louis Vuitton the recent collaboration with US-based streetwear brand Supreme to produce a one-off range of goods must have been bittersweet.

On the sweet side the tie-up, which saw the two sell through pop-up stores in London, Beijing, Tokyo, Paris, Sydney, LA and Seoul, created a massive demand for the collection.

Thousands of customers queued for hours to get their hands on the limited amount of products produced by the unusual combination of a cult New York City streetwear brand and one owned by an enormous global luxury goods conglomerate

Such was the desire for the items – that cost up to £3,000-plus – that many were immediately placed on eBay for up to five-times the original purchase price. This last point is the bitter aspect for Louis Vuitton. Whereas it has traditionally controlled pricing and distribution, the era of brands in charge of all the levers is coming to an end.

Third-party sellers have emerged in growing numbers online and it has been causing a headache for the big brands. In the past they have been able to control the environment in which their goods are sold. In contrast, brands like Supreme thrive in this freewheeling new world as they make a limited run of goods and intentionally contribute to the creation of a vibrant secondary market where their goods are sold at massively inflated prices.

The big brands have often found their products sold more cheaply in the secondary re-sale market, which is not exactly good news when they are initially trying to sell these goods at high prices in prime location stores around the world.

Adding to the bitter element for Louis Vuitton is the fact that most of the younger shoppers who bought the collaborative LV/Supreme products did so because of the streetwear brand’s involvement rather than because of the big brand.

There are clearly lots of learnings for Louis Vuitton from this collaboration – more than for Supreme I’d suggest. The fashion world is being turned on its head by younger consumers and the equally youthful brands that now appeal to them and the big brands are going to have to work very hard to remain relevant.

Glynn Davis, editor of Retail Insider

K3 Retail deliver multi-channel solutions that enable retailers to create joined up shopping experiences for their customers whether they choose to buy on-line, direct, in-store or via mobile. It has over 20 years’ experience delivering award winning solutions, to more than 175 internationally recognised retail brands.