STREETWEAR GROWTH STEPS

Five ways how fashion brands can win in this growing market

Streetwear is one of the most striking retail and fashion trends to have emerged in recent years,
involving the production, promotion, sale and resale of casual fashion – mainly footwear, T-shirts and
other items – in ways that bypass traditional retail channels. Customers are often rallied via social media
to be the first to buy products that are only available directly from the brand, either in-store or online.
The anticipation of a time-limited chance to buy, helps create a tight-knit and almost cult-like
relationship between streetwear brands and their consumers. This has helped propel streetwear from
being an eye-catching fashion phenomenon that drew its inspiration from the counter-cultures of the
1980s and 1990s – including graffiti, hip-hop, skate and surf – into a multi-billion dollar retail market. We
estimate the size of the global streetwear market at $185 billion by sales1 , making it by some estimates
about 10 percent2 of the entire global apparel and footwear market. Streetwear’s impact – both on
retail culture and the numbers involved – has caught the attention of some of the most iconic,
established brands in the retail and luxury goods sectors and fashion industry generally. Streetwear
players come from various parts of the fashion industry. There are pure streetwear brands such as
Supreme and Stüssy, while sportswear names such as Nike are developing their traditional portfolio of
sports equipment into a growing streetwear portfolio of cool, hip sneakers and hoodies. In addition,
luxury brands are working to gain a significant stake in the streetwear market (see Exhibit 1, next page).
1. Estimate based on US Streetwear Market Report d

That’s in large part because it is opening up a whole new target market of younger consumers.
Streetwear’s audience is very young: mostly under 25. A second reason for the interest from established
brands is that streetwear has subverted the way fashion trends have taken off. The fashion industry has
typically operated a top-down model, with insiders acting as gatekeepers to the newest styles and
trends. Streetwear has turned this on its head. Customers have the power to determine what’s cool as
much as industry insiders. Exclusivity and desirability are conferred by scarcity and insider knowledge
rather than high prices. In short, streetwear has redefined how “cool” is made profitable. Third,
streetwear’s democratic values are increasingly shared by all consumers, for whom the opinion of peers
is an ever-more influential part of decision-making: 32 percent of respondents to PwC’s recent Global
Consumer Insights Survey (GCIS) said positive reviews on social-media influence what products they buy.
Small wonder, therefore, that fashion brands have been buying into the streetwear trend in recent
years. Among the highest profile examples are Louis Vuitton’s collaboration with leading streetwear
brand Supreme, and the luxury giant’s decision to hire Virgil Abloh, founder of streetwear brand Off-
White, as artistic director of Louis Vuitton menswear last year.

Strategy& and Hypebeast, a leading online media platform for contemporary fashion and streetwear,
recently conducted two surveys to show how fashion brands can best succeed in streetwear: one
covering more than 40,000 consumers worldwide and another involving around 700 people working in
the industry. The results showed that:
< 25 years old Streetwear consumers are young: more than 60 percent of consumers surveyed were
under 25. 84% Social media is their top source (84 percent) of influence, followed by the other young,
urban people they see around them. 65% Successful brands have strong links to the cultures out of
which streetwear grew: musicians have the most credibility among consumers in our survey (65
percent), some way ahead of social-media influencers (32 percent). 70% Streetwear’s young fans think
of themselves as being socially conscious, a trend that is spreading to all consumers: 70 percent said
social awareness and brand activism were important to them, while 29 percent of PwC’s GCIS
participants said they buy brands that promote sustainable practices. But they have money to spend on
their favorite brands: 56 percent reported spending anaverage of $100–$300 on a single item. Asian
consumers spend more, with 32 percent of Japanese respondents spending an average of $500 or more
per product. They connect directly with brands both offline and online: 53 percent are most likely to buy
streetwear products in the brand’s own store; 42 percent from its website. $100 – $300 53% 42% ≤
$40,000 They aren’t all that wealthy, either: about 70 percent of respondents reported an annual
income of

Growth expectations for streetwear are robust, even as there are some clouds gathering over the retail
industry amid fears of a global economic slowdown: as many as 76 percent of industry respondents in
our survey expected the market to continue to grow significantly over the next five years. With this
landscape in mind, we have explored how brands can play – and win – in the streetwear market. Five
factors should be borne in mind for success: authenticity; scarcity; democracy; affordability; and
seamlessly linked online and offline activity

1. Authenticity 3. Wallpaper (2019) – adidas launches first fully recycable sneakers;

https://www.wallpaper.com/fashion/adidas-first-fully-recyclable-sneaker The challenge for
most fashion labels is to stay relevant by redefining themselves every few years. Streetwear
succeeds by staying true to its origins: 62 percent of consumers in our survey said streetwear
products are always in style, surviving fashion’s traditional cycles due to their versatility. Yet to
achieve this timeless appeal, brands must live up to the very high standards set by streetwear’s
young and discerning customers – and demonstrate authenticity. A majority (70 percent) of
survey respondents said campaigning on social issues and brand activism were important to
them. Almost half (47 percent) of respondents reported they were likely to stop buying items
from a brand if it was seen as behaving inappropriately. How can brands, particularly those with
no historic links to any of the cultural influences of streetwear, offer authenticity? • Define your
brand by emphasizing your heritage, telling your story, building on what you really stand for and
investing in differentiating capabilities. Establishing an authentic brand purpose is a crucial way
to reach audiences in a crowded digital field: “If you can use technology to gain entry, and then
tell a story that is engaging to consumers, then there is a good chance of success,” former Saks
Fifth Avenue chief executive Stephen Sadove said in an interview for PwC’s GCIS. • Listen to your
consumers, react quickly and continually assess how new products and promotions fit with
consumers’ expectations of your brand’s image and roots. • Build relationships with true
innovators and creators in the worlds of music, art, fashion and sustainability to innovate
together. Streetwear is still very strongly linked to its cultural roots in hip-hop and graffiti.
 Musicians, industry insiders and contemporary artists were all viewed as more credible sources
than social media influencers, celebrities or athletes, according to our survey. Therefore, brands
should build meaningful links with true innovators and creators in these fields, rather than seek
superficial promotion via professional influencers (see Exhibit 2, next page). • Provide proof of
commitment to issues such as sustainability and the circular economy to show that your actions
live up to your words. Adidas, for example, brought out the first fully recyclable running shoe
earlier in 2019, saying the sneakers were “a statement of our intent to take responsibility for the
entire life of our product.”3
2. 2. Scarcity 4. The Economist 1843 magazine (2017) – The hype economy;
https://www.1843magazine.com/style/the-hype-economy While exclusivity in the luxury sector
is mostly driven by premium prices, exclusivity in streetwear is mostly driven by scarce supply.
To succeed in this market, brands must understand and master the dynamic of limited
availability, starting with the drops model. Traditionally, high fashion products or collections are
first shown to the public in runway shows; new mainstream fashion collections are often not
announced at all beyond the retailer’s regular advertising. However, streetwear introduced a
new way of bringing products to the market, known as drops. Customers queue outside the
brand’s store on the appointed day and are allowed in, in batches. Individuals may only have 15
minutes in the shop and can buy a maximum of six items.4 Brands also build demand ahead of a
drop by giving products to high-profile figures to wear. For Virgil Abloh’s “The Ten” sneaker
collection by Off-White and Nike, personalized versions were given to celebrities including
basketball star Michael Jordan, musician Drake and the model Naomi Campbell ahead of the
official release.
In an earlier innovation by Nike, in 2015 the company introduced a lottery called SNKRS that
picked at random from those who signed up for a new drop and allocated them a slot that
allowed them to purchase the shoe. By making the new product scarce, increasing its desirability
and only available from Nike directly, the company was able to have the kind of direct
communication with its customers that all fashion brands crave, both for brand awareness and
sales reasons. Done correctly, drops enable brands to build momentum and to actively steer
demand to exceed supply. Creating scarcity in this way increases the hype and demand for
certain products even further. Companies that are new to the drops model can invest in
predictive analytics to simulate demand and supply, in order to drive scarcity without risking
producing too little of a sought-after product. Scarcity also drives another unique feature of
streetwear – a booming resale market. Supreme box-logo crewnecks, originally sold for $158,
resell for a minimum of $500 in summer 2019, for example. Resale value is a key metric of a
brand’s success: the more limited the availability, the higher the demand and the resale price
tag. So how can players actively manage scarcity? • Perfect the direct-to-consumer model that
the wider fashion industry has been desperate to crack for both communication and sales.
Adopt drops because they have proven to be an effective tool to drive demand. • Understand
the dynamics of resale and how this might affect your pricing model and supply level. • Invest in
both consumer-facing and back-office technology and data analytics to predict demand and
actively steer supply.
3. Democracy The democratization of influence is a key feature of streetwear, with brands and
industry insiders taking direction directly from consumers – mostly those under 25. Streetwear’s
regular supply of new products, relative affordability, and an aesthetic based on the real world
rather than the runway also make it a perfect match for social media. In the early 2000s, before
sites such as Facebook existed, streetwear fans started online forums to discuss styles and
brands that were not covered by mainstream fashion magazines. Now, Instagram is the
dominant channel, with 96 percent of consumers in our survey using it to gather information on
streetwear (see Exhibit 3). Source: Streetwear Impact Report – percentage of records from
consumer survey EXHIBIT 3 Top sources of inspiration Social media 84.0% Digital fashion
publications 48.6% Physical stores 27.2% Print fashion publications 20.5% Forums 16.0%
Across the fashion industry, consumers are canvassing the opinions of peers via their own social-
media accounts, no longer having to rely on what brands or magazines tell them to wear.
Positive reviews on social-media influence the purchases of 32 percent of respondents to PwC’s
GCIS, and when it comes to fashion, the impact is greater: 54 percent of respondents said social-
media influences their purchase decisions. However, for fashion brands new to streetwear,
gaining acceptance from its consumer-led “in crowd” is the highest barrier to entry. Brands with
no streetwear heritage struggle to connect, no matter how stylish their product, because
consumers possess a deep appreciation for the history of the market and brands. In streetwear,
the crowd’s support determines who will succeed. So what can brands do to win them over? •
Move away from the traditional, top-down approach of telling your consumers what they should
be wearing and instead involve them in co-creation. For example, as part of a New York event
called “Off Campus” to launch Abloh and Nike’s “The Ten” collection, attendees could cut up and
customize pairs of sneakers at a pop-up store.5 • Use new and established ways to interact with
consumers – both online and offline – to ensure a constant dialogue. • Either leverage your
brand’s history to prove your right to play and win in the streetwear space (Balenciaga, for
example, has successfully grown a streetwear business from its luxury roots) – or partner with
an authentic streetwear player to gain acceptance, gradually move into the market, offer
existing customers a new type of “cool” and establish your own credibility. The first
collaboration between Supreme and Louis Vuitton in the summer of 2017 marked a turning
point for luxury fashion’s awareness of streetwear.
4. 4. Affordability Scarcity may be what gives streetwear its cachet, but it is affordability that has
turned a group of niche brands making cool T-shirts into a multi-billion dollar industry. Young
consumers with limited funds prioritize the brands they love. Just over half of consumers in our
survey reported spending $100 to $500 a month on streetwear. There are geographical
differences in spending – our data indicates that 60 percent of consumers in Japan spend more
than $300 per item, while 61 percent of consumers in Europe and North America spend $100 to
$300. Another element of affordability is versatility. Footwear drives streetwear sales, with 62
percent of consumers saying it is the product they are most likely to buy. These days sneakers
can be worn in almost all situations and with a variety of different clothes, and like the other
streetwear staples, T-shirts and hoodies, they have a far longer lifespan than other fashion items
and can be worn year-round. For brands to succeed, it is key that products are not just
perceived as affordable commodities, but as art that is loved by the owner. So how do they go
 about this? • Understand the spending patterns and geographical differences between your
customers to define pricing. • Reward your loyal target market instead of targeting those with
deep pockets. Using drops, rather than charging high prices, helps put streetwear in the hands
of people who love it. If customers perceive prices to be fair, it cements their bond with the
brand, encouraging future sales and also making it more likely they will buy direct rather than
on resale sites. • Offer versatile products including shoes, T-shirts and hoodies. There is no need
to offer a wide range of styles. A simple portfolio will help you to manage costs and increase
speed. Successful streetwear lines do not need a wide range of products, but a versatile
collection of sneakers, T-shirts and hoodies that fans want to wear for more than one fashion
season. Include a small number of “big bang” designs to grab attention, as well as those
designed to be staples.
5. 5. Seamlessly linked online and offline activity Streetwear and social media have grown up hand-
in-hand. However, a unique feature of streetwear is the mismatch between the importance of
an online presence for marketing purposes, and actually completing a purchase. Consumers
want to buy streetwear directly from the brand, preferably a physical brand store (56 percent)
or a brand’s e-commerce site (42 percent). Anything else is considered “Plan B”: only 28 percent
of survey respondents said they were likely to buy from resale sites (although the resale market
is a growing phenomenon); 32 percent from multi-brand retailers; 26 percent from multi-brand
e-commerce sites; and 13 percent via social-media sites. The desire to shop in the brand’s
bricks-and-mortar store is driven by streetwear’s model of making products available for a
limited time in certain places. It may appear to run counter to the broader trend for shopping
online; the percentage of PwC GCIS respondents who buy something online daily or weekly, rose
five percentage points year-on-year, to 31 percent in 2019, for example. However, what
successful streetwear brands offer is a seamless interaction between their offline and online
channels. Customers want to enjoy the buzz of waiting outside the brand’s flagship store for a
drop, or co-creating their own sneakers at a pop-up store. But they learn when these events are
happening by engaging online with the brand and third-party sites. If brands get the interaction
right between their online information and offline sales channels, they can cut the amount they
spend on traditional top-down marketing activities. Instead, they can focus on increasing the
number of organic followers they have as a credible streetwear player. So how can brands
ensure the seamless link? • Invest in the right front-end IT and data solutions so you not only
“broadcast” to consumers, but use data to be able to respond and stay relevant. • Drive
customer-centricity online and offline: establish personal connections online, primarily for
information, communication and inspiration and use it as a two-way bridge to experience in the
physical space. Establish personal connections offline, primarily for experience, relationship
building and purchases. Branded physical stores are the primary place to complete sales. •
Rethink your design and store approach regarding range, timing and volumes for desirability,
less mark-downs and a more sustainable concept due to minimized waste. • Rethink the way
your marketing organization operates, how you interact with target groups and other internal
functions, and how marketing budgets are spent.