Supreme Business Analysis

1 January 2017

Is it possible for a small skateboard shop on Lafayette St. in New York City to become a large, iconic clothing brand and take over the street-wear scene? For the boys over at Supreme it is possible, and it has been done. James Jebbia, the founder and owner of Supreme, opened the doors of his little skate shop in downtown Manhattan in April 1994. The shop attracted the rebellious skaters and artists of New York but never exploded the way James wanted it to.

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He decided to establish his own brand within the store with the original red box logo, by printing it onto t-shirts and sweaters. Supreme boomed into the must have street wear clothing. James attracted artists to paint designs for the brand and every rapper wanted to be seen in his t-shirts. As the years went on and the brand started to grow, many different articles of clothing and accessories were added to Supreme’s inventory. Button-up shirts, work pants, rain coats, backpacks, hats, and other articles of clothing that weren’t normally sold by a skate shop were seen coming out of Supreme.

Since that boom, there has been no other clothing brand that comes close to Supreme when charisma and exclusivity are mentioned. Supreme will now and forever be known for its “I don’t give a crap” attitude, quality, and authenticity. The one thing Supreme is mostly known for is its product. James and the guys at Supreme have always strived to bring their customers top quality products that can’t be found anywhere else. They’ve changed the image of a skate shop into a high end clothing boutique.

Skate shops are known to sell skateboards, punk clothing, and other accessories such as pads and sunglasses. This isn’t found in any of the Supreme boutiques. Their inventory includes button up shirts, trench coats, cardigans, work pants, traveling bags, professionally screen-printed t-shirts, hats, scarves, gloves, and many other articles of clothing that are rarely found in any kind of store. James made sure that his brand held on to its skateboarding roots by selling skateboard Nicholas 2 decks but he has changed the image of a skate shop.

Not only are their products unique, the quality is extraordinary. This includes, corduroy shirts, finely stitched jackets, 100 percent wool scarves, leather hats, and to top it off, James made sure that every piece of his clothing is made and assembled in North America. Supreme has taken over the hat business with its iconic camp hat. This simple hat that resembles what the Korean army would wear in the early 1900s is the most desirable hat in the clothing scene. Every month or so, James will come out with a new style of camp hat and they are gone in the blink of an eye.

Supreme takes pride in its one of kind, exclusive clothing, and these qualities are the barrier between it and other street-wear clothing brands. Many critics and clothing enthusiasts may say that Supreme’s biggest weakness is its price. High quality and exclusivity call for extremely high prices that many people can’t afford. Their shirts range from ninety dollars to one hundred and fifty dollars which is highly more expensive than one of their competitors such as Stussy that will sell their shirts for sixty dollars. Jackets and other fine coats will range from two hundred dollars all the way to three hundred and fifty dollars.

These extremely high prices push their customers away from buying their clothing which leaves them to go the cheaper route by buying their competitor’s clothing. When it comes to t-shirts, the prices are more reasonable and they resemble their competitor’s. For example, the average price of a t-shirt coming from any street-wear brand is thirty two dollars before tax. Every one of Supreme’s screen printed t-shirts are priced at thirty dollars while Diamond Supply Co. ’s shirts are thirty four dollars. The average person finds it to be a bonus when the most desirable t-shirts are cheaper than everyone else’s.

As I mentioned before, Supreme’s camp hats are one of a kind. Because of this, the hats are set at a higher price starting Nicholas 3 at fifty dollars. Their competitor’s hats will cost anywhere from thirty two dollars too forty dollars. Again, many critics find this as a weakness yet enthusiasts are willing to pay a high premium just to get a seven letter word on their head. Supreme’s method of promoting their business is the easiest, cheapest, and smartest way: word of mouth. There are no commercials, advertisements, or any form of mass media promotion.

Everything is heard and seen through the grapevine. James will set up photo shoots where the model, which the majority of the time is a well-known model or a famous rapper, where’s the iconic box logo t-shirt. People see this and instantly want what their favorite rapper or model is wearing. The lust and desire builds inside these people and they eventually give in and do whatever they can to get their hands on Supreme clothing. The person who is now a loyal customer of Supreme will show it to his or her friend and the cycle starts right over again. The lust spreads like a wildfire.

It goes to the extreme when people line up outside of the store two days before their new items drop. Besides showing up on every rappers chest, something else drives the customer’s lust: exclusivity. People want something the most when they can’t have it. Almost everything on Supreme’s website sells out in one day and they will never be made again. This drives people to constantly stay updated with their website and inventory. Free promotion and customer drive is an area that James highly excelled in. Supreme’s last line of business is the place that they make available for their customers to buy their products.

Supreme has seven boutiques worldwide which include the original store in New York, one in Los Angeles, London, Nagoya, Osaka, Fukuoka, and two in Tokyo. The availability is a lot higher in regions of Asia but this is beneficial. With only two boutiques in the Nicholas 4 United States, the drive for their products increases. This ties into the exclusivity of Supreme. People in the United States will go well out of their way to get something from Supreme. The lust peaks, especially when the only other place to get their products, the website, is inaccessible.

The biggest problem with their website is that their products run out very quickly but fortunately, they aren’t updated with the inventory of the stores, only the warehouses. The products found in the stores stay there and are never touched by internet orders. This is the premium of traveling to one of their physical destinations because the items that are sold out on the internet can be found in their boutiques. What sets Supreme away from its competitors is its exclusivity of availability. For example, brands such as The Hundreds and Stussy will sell their products to other vendors for them to sell to customers.

Supreme only sells their clothes through their own store. Many critics say that it’s a mistake financially to only sell through your store but it was a wise business choice by James. The exclusivity makes Supreme’s clothing stand out and makes it more desirable. If customers truly want your items, give them no other choice then to come to you. This is working perfectly fine because people all around the world are going well out of their way to become part of the Supreme team. On a side note, Supreme’s charisma and goal needs to be mentioned. People that are familiar with street-wear brands know what everyone is wearing.

They know the brand of their shirt, hat, shoes, and even socks. But when someone walks into the room with the Supreme logo on their chest, the whole place goes quiet. Supreme clothing causes a natural reaction for people to double take on what they saw. It forces people to accept the fact that the person that just walked in the room is ten times better dressed than he or she is. It then gives them the desire to either hop into a car, rush down to the Supreme boutique, and buy everything they can afford, or, Nicholas 5 find the nearest computer and watch their bank account dwindle down into dust.

This effect of jealously, that eventually turns into lust, is the ultimate goal of Supreme as a business. The charisma and lust came naturally through people wearing the clothes and being part of an exclusive group of well-dressed human beings. One suggestion I would give to James about changing Supreme would be to make up your mind on the image of the brand. It’s established itself as a high end clothing boutique but still hangs on to its skateboarding roots. James always manages to mention that they are a skateboard shop before anything. Skateboard shops don’t sell three hundred dollar trench coats.

It’s a wonderful addition and sets them apart from anyone else by a mile but he should establish the identity as a high end boutique that caters to the skate and street culture of the world. Even though Supreme has a vice grip on the majority of street-wear connoisseurs, the brand would attract many different demographics if it established an identity. Whether it’s a multi-million dollar rapper or an average skateboarder living in his or her parent’s home, Supreme is intended and available for everyone. Supreme will continue to provide high quality clothing and accessories while also setting the bar of the ultimate street-wear brand.

James managed to grow a small skate shop into a large and successful business. He has manipulated the marketing mix and has executed his wise decisions to make the most successful street-wear clothing brand to ever come out of New York. The supreme goal is for everyone in the world to become a part of the Supreme Team, and it would be of no surprise if that came to reality.

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