Welcome to the the Ivey HBA Retail Marketing Management blog. Retail marketing is an exciting, dynamic, important, and very visible aspect of the overall field of marketing. Throughout the year, students will be posting comments regarding contemporary retailing issues. Although this is intended to be used by Bus 4411 students, industry marketing professionals are also invited to join in if they like.

Wednesday, February 11, 2009

Streetwear clothing...high price + poor convenience + limited stock = BIG MONEY

I thought I would share the complexities I have been dealing recently with while trying to operate a clothing line in a niche segment of the fashion industry called Streetwear.

Wikipedia defines it as, “Street wear is a distinctive style of fashion not to be confused with hip hop fashion. Its roots are in skateboarding and the "skatewear" of the 1980s. It was later adopted as an urban fashion in Japan before growing to an international business. An important element to the style is vintage or vintage-style sneakers.”

For the most part I would have to agree with this definition. The Streetwear industry is a hard one to define to ‘outsiders’ as it is an amalgamation of vintage, skate, preppy, and hip-hop style. Aside from the troubles defining the style, it is just as difficult to describe to others exactly how and why Streetwear continues to grow and have an impact on the fashion industry as a whole.

For those who do not follow the Streetwear industry closely you might not notice its impact on the overall fashion industry, but it’s easy for us die-hards to spot the impacts everywhere. Styles and prints originating in Streetwear brands are constantly being copied by major clothing brands that sell in mainstream stores and even high-fashion brands like Louis Vuitton and Gucci are getting in on the action by collaborating with celebrities like Kanye West to form their own lines that are Streetwear inspired.

What makes retailing in the Streetwear industry so difficult is the complexity of its RVP. It is driven by high price, small selection, and being hard to find.

Part of the value in Streetwear is the exclusivity of the clothing. The clothing brands

that are most popular do not flood the market with their clothes. They are very selective in the shops/boutiques they sell in. These shops need to fit a certain image, carry certain other brands, have a certain clientele, and be run by the right people to get an account. Consumers thrive off this exclusivity and brands can easily be swept into the ‘un-cool’ pile if they ‘sell-out’ and sell at mainstream merchandisers like the Boathouses or Athletes Worlds of the world. To put it in perspective London only has one Streetwear shop – Echelon, which only opened 1 ½ yrs ago, and even Toronto only has 6 or 7 shops.

Not only are there very few Streetwear shops, even in the biggest cities, the few there are have a tiny selection of stock. You would be lucky if you walked into a shop and saw more than two racks of clothing and ten styles of shoes. Even with this small stock, consumers are very loyal to their shops visiting their favourite shops weekly to check up on the few new pieces that may have come in.

Further complicating these shops, which are far and few between and have a tiny amount of stock, is the price. Prices for these products, which ‘outsiders’ would probably thing look like nothing more than a tee or sweater you could buy at Walmart, are sold at a very high premium. Consumers are more than willing to pay this premium, and I believe it goes hand in hand with the exclusivity factor of Streetwear. A basic tee runs from $40-$70, and basic sweater runs from $80-$200. Being on the supplier side of the industry now, I now more than ever see just how much a premium these brands are charging for their clothes. Tees that cost no more than $5 to produce are being sold for as high as $70…now those are high margins.

The one thing I think that attracts people to the industry is the experience that it offers. Consumers very much feel apart of a certain group that are wearing the expensive exclusive clothes from the rare shops that only a handful of people know about. Often consumers get attached to their shop and develop a strong loyalty to it and the few workers that run the shop. Those who wear Streetwear can spot others from a mile away who dress like they do, as well as those who don’t.

More and more, Streetwear is making its way into the mainstream market. Those who are loyal followers are dreading the day that Streetwear is mainstream and sold in malls everywhere, but it is going to happen whether they like it or not. What I have noticed in the last few years is that the Streetwear itself is changing, as its very own products become mainstream. As certain styles become mass produced by ‘un-cool’ brands, the Streetwear industry moves in a different direction to disassociate themselves with those brands.

Streewear is difficult industry to shop in, and even more difficult to retail or produce in. I am finding myself producing clothes for people who do not want clothes that are popular yet not too popular and trying to sell to a small handful of stores that want to sell clothes that are popular, but not mainstream. I have to find a sweet-spot to make my line just popular enough to gain some traction in the market, but not so big of a splash that people would consider it mainstream.

To see my line you can check out at www.classicandpark.com


Dennis Choi said...
This comment has been removed by the author.
Dennis Choi said...

Streetwear has already become a mainstream in Korea & Japan as well.

Japanese have created a unique style. It overcomes their figure(shorter legs, longer waist.)

They have created some famous domestic brands and holds some seperate lines from famous steadyselling streetwears like supreme and stussy

I really enjoyed reading one of my keen interests. Maybe later we can share some views on streetwear.