“I’m Kan, the Louis Vuitton don,
Bought my mom a purse now she Louis Vuitton mom”
In the world of luxury, buyers pay huge premiums to join exclusive tribes and share in the art of a brand. An artistically crafted handbag from Hermes can sell for $10,000 while that set of basic materials presented in a different form at TJ Maxx could only command $300. For upper echelon brands like Louis Vuitton, Hermes, and Gucci, this brand positioning took decades – or even centuries - to build; however, in the last five years, something radical happened. Newly-born brands from the United States, Yeezy and Off-White, have penetrated this extremely exclusive world of luxury fashion.
How did this happen so quickly? The story starts about 15 years ago when Kanye West had just finished conquering the world of hip-hop. He began dipping his toes into fashion design and later paired up with Kim Kardashian. His first attempt began in 2005 with Pastelle Clothing but was cancelled four years later. In subsequent attempts, Kanye would collaborate on shoes with Nike, Louis Vuitton, Bape, and Adidas. The collaboration with Adidas to createYeezy Boosts would finally be the launching point for Yeezy, his new clothing line in started in 2015.
image source: https://stockx.com/adidas-yeezy-boost-350-v2-beluga-2-0
West was one of the earliest fashion designers to design clothing that is made for Instagram; he, along with Kim and the rest of the Kardashians, would showcase unreleased sneakers on Instagram.
This audience of nearly 300M allowed West to capture user feedback on his designs while also creating hype for his brand. For the first few years, he produced Yeezy 350 Boosts in such extremely limited-runs to ensure that demand greatly outstripped supply. The first run of Yeezy Zebras, the Yeebras, sold for over $1,000 in the secondary markets even though its retail price was only $220. Now four seasons later, Yeezy is already on a $1 billion dollar run rate and has taken the entire sneaker industry by storm. (The author of this article has a small collection of Yeezy 350s.)
image source: https://www.gq.com/story/virgil-abloh-cover-story-spring-2019
During this time and behind the scenes with West, there was a budding architect-turned-fashion designer of Ghanaian origin named Virgil Abloh. Abloh’s interest in fashion began in college at the Illinois Institute of Technology. After interning at Fendi with Kanye West in 2009, Abloh launched a retail store called RSVP Gallery and created “an artistic experimental company” called Pyrex Vision that lasted from 2012 – 2013. Because of that great friendship formed at Fendi, Abloh also led the artistic design of West and Jay-Z’s music album, Watch the Throne, in 2011.
After Pyrex Vision, Abloh made another attempt at fashion under the label Off-White. Abloh’s distinct meta-social commentary with the liberal use of quotation marks, zip-ties, and barricade tape caught the attention of many designers and influencers. The first Off-White store opened in Tokyo, and the brand’s success led Abloh to many future collaborations with big names such as Nike and IKEA.
Leveraging West’s network, Abloh cleverly used the influence of celebrities onInstagram to launch his Off-White x Air Jordan release in 2017. Mega celebrities like A$AP Rocky, Drake, and Naomi Campbell would show off their custom-made and extremely rare sneakers that were sold out before they even hit the shelves. The
eye-catching designs with their signature “Inside Out” printing cemented Abloh as an influential fashion designer -- but more importantly, these designs also stood out on Instagram. Because of the extreme hype and very limited production, Off-White Air Jordan 1s continue to be one of the most in-demand and expensive sneakers on the market to this day -- outperforming the S&P 500 since their release.
As a result of this savvy marketing, Off-White has seen a meteoric rise to the top of the fashion charts. In October 2018, it landed the #1 position on the global luxury index, de-throning Louis Vuitton. This new shift in luxury fashion was so disruptive that LVMH hired Virgil Abloh as the head of global men’s fashion. Abloh also became the first black person to head a major fashion house.
West and Abloh’s progressive tactics are now being copied by other savvy entrepreneurs. Rihanna recently launched a beauty line with LVHM called Fenty that applies this new business plan to cosmetics. The brand earned $72 million in its first four weeks and is on track to become a billion dollar businessby the end of this year. Everything – from the message of inclusivity, all the way down the packaging – was carefully planned to work in tandem with social media platforms and be as aesthetically pleasing as possible.
image source: http://lifeandtimes.com/unboxed
So, what can other brands do to fortify their positions? What cannew brands do to succeed in this new era of social media??
Design for Instagram
Design products with consideration to selfie posts that make use of mirrors and potentially flash,and test drive the designs in Instagram posts. Partner directly with top influencers as they are the best way to speak to your target demographic. Design the brand with the influencers already in mind as potential customers.
Watch for what other brands are doing to ride the wave of what’s trending to stay relevant. Utilize Instagram Stories as well to show off behind-the-scenes footage at the design studio or backstage at a fashion show. Your demographic will love feeling like they are right there with you.
Limit Production and use Drops
A core axis of luxury purchasing is feeling as though you’re one of the lucky few who own this product. By limiting production of choice products, the brands can create exclusivity within exclusivity. This creates status stratification within each brand that rewards their most loyal followers. To capture the entire value creation opportunity, brands can mass produce slightly less exclusive versions of similar products but with variations or in different color ways.
Create Hype
Get the products on influencers and listen to the audience reception. Design risks can be reduced by gauging audience feedback early. By educating the influencers on the exclusivity of the product, there can be an aligned interest to show it off. Consider sharing equity to align interests further.
Show your influencers or high-caliber clients wearing your product before it’s even on the shelves. Again, consumers will take their word for it. If Drake is rocking your shoes every day and posting them on Instagram, you know past launch date thousands of people will be doing the same.
What have you noticed about brands that use social media versus brands that don’t? Do you believe brands have to use Instagram in order to achieve success? Let us know your thoughts in the comments.
About Ankur
Ankur is the Head of VC and Startup Partnerships for Google. He is the Managing Director of Brighton Angels with investments in 25+ companies including Wealthfront, Philz Coffee, MemSQL, Carta, Periscope Data, Lever, Chewse, and dozens of others. He is a sneakerhead.