Streetwear Impact Report - JL
Josh Luber on Mastering Supply and Demand
This interview is part of the Streetwear Impact Report. The report includes data analyzed through two key research methods: a consumer-facing survey and an industry-facing survey. Full description of the methodology behind the report can be found in the Introduction.
Josh Luber is the CEO and Co-founder of digital sneaker and streetwear marketplace, StockX. Read our other Streetwear Impact Report lead interviews with Hiroshi Fujiwara , Daniel Arsham and Alexandre Arnault .
How would you define streetwear?
Josh Luber: Bobby Hundreds has a quote that's often used to describe streetwear that says something like, "Sales, distribution, and image are what constitutes a brand of streetwear." I suppose there's some truth to that, just tactically the method of how we're delivering certain products. I think it's relevant for how people describe it to us, to StockX, in that we're not a streetwear brand. However, we sell many and we're a marketplace and now the largest marketplace in the world for perhaps the most famous streetwear brand of all time, Supreme. For certain streetwear products, StockX is the distribution platform.
There used to be this idea that streetwear was scarce but low quality. That was what made it, just the scarcity and the low supply and the very local nature of it was what made it valuable. Just when basically every brand these days is trying to figure out the balance in the supply and demand continuum of where to play in the scarcity equation.
My view on the whole thing is that it's a very personal expression of whatever that designer wants to create. I think the long-tail of creative expression within clothing is a fun thing. That is only a newer thing because the manufacture of clothing is not a simple thing for everyone to do. But it's become easier.
How has streetwear changed? Where do you see it now?
I think it's become a more ubiquitous term to reference anything that's not a traditional brand. It’s everywhere you're dealing with that scarcity concept of supply and demand, and all of it ultimately is some desire to express yourself in what you're wearing and to wear something that is uniquely chosen for you. I think streetwear is just a different place in that continuum in supply and demand and ultimately price. High fashion is just because of what it is, usually associated with the very historic design houses and high price points. But is that line clearly very blurred? Certainly it's very blurred on the price point.
It's no longer necessary to be a low price point or low quality for streetwear. That's the key to that. Streetwear now can be as high quality and high price point as the fashion houses. That line is completely blurred as the customer is completely blurred. Ultimately, those products are satisfying the same thing: which is a unique expression of that person of what they want to wear. Streetwear and high fashion both accomplish the same thing; that expression that you don't get if it's a blue T-shirt from the Gap.
How would you describe StockX and its impact on streetwear? How has StockX contributed to the growth of streetwear?
StockX is supply and demand. We don't sell anything and we don't require people to pay a certain price or create artificial constraints of who can sell or who can buy. What is does is create transparency in the market.
Initially, it gave buyers as much information as sellers had. Sellers used to be the only ones that had real full knowledge of the supply that was in the market and what people were actually paying for everything. It's also about access.
On StockX, the consumer is going to actually see all the data and every sale that's ever happened, every bid, and every app, and everything else. So there's full transparency into what the market thinks of that price and product. It allows that idea of that true expression of yourself. That's just the demand piece of it. The supply piece of it we’re not a part of but what we're doing is giving transparency into the market demand and the market supply. That should hopefully give people greater access and more fair opportunity to buy those products.
Where does the demand for streetwear products come from? Is this only due to the transparency or is it also additional factors?
Demand is a function of so many factors. The brands do everything they possibly can to create demand for their products in terms of the design and who is associated with it and how it's distributed. But the supply decision is actually part of that. So you get this somewhat circular function where you have a very true supply and demand curve but then because something is limited, it also creates demand on top of that. You get this sort of exponential demand increase when it happens.
As soon as supply is greater than demand, that product's not scarce anymore. So it's not cool to a certain group who wants that totally unique self-expression. They don't want to possibly wear something that any person off the street can just walk in and buy. That cool 17-year-old kid doesn't want to wear the same shoes that my mother wears.
In practice it's not an exact science. Nobody knows exactly what demand is mathematically. Everybody knows what supply is. Supply is however many widgets they're going to create, how many hoodies or T-shirts they're going to create. But demand is a projection. StockX is actually true demand. It is tied to someone's PayPal or their credit card. Which means a seller can actually sell a product to that buyer without the buyer taking any other action.
How important are collaborations for brands in creating hype behind products?
This is a huge part of sneakers and streetwear and now high fashion. What's interesting is it's kind of like pizza. Everybody loves pizza but man, there is amazing pizza and there's horrible pizza and there's everything in between.
Customers see through the collaboration for a check or collaboration just because there should be collaborations because everyone's doing it. Just because something is a collaboration and just because something is limited doesn't mean that it's going to be in high demand. When there's not a reason for it, either a creative reason or a narrative and a storytelling reason, customers see through that pretty easily.
It totally makes sense when you're trying to build an authentic brand. For the fashion houses, this is a relatively new thing, particularly for doing collaborations with streetwear brands. These brands have histories of over a hundred years in some cases, of being true to their own brand. So when they do a collaboration, it's a really big deal.
Thinking about the target audience of streetwear and in particular the people on your platform, is there a typical streetwear customer? Is it a different kind of animal, sellers versus buyers?
Sellers are usually some form of small business; people that have been doing this. They're actively involved in trying to figure out how to acquire the product and what the business is around it. The best part about StockX at this point is, the buyers are starting to become a lot more universal. It used to be exactly who you think it is, which is 14 to 24 young urban male in the culture, lives it, breathes it. But it has very quickly become a lot more.
StockX is all about access. So therefore, all of the sudden it could be anyone that is buying and selling. We have this saying, "Streetwear is for everyone." Streetwear is not about this brand or that brand. It's about a more authentic expression of what you want to do; what you want to wear. Nobody owns that.
Do you think that at some point, those people who started this streetwear trend and that love the scarcity of it, are now trying to find a new market moving away due to the fact that it's become more mainstream? Or is it actually a good thing because now you get the masses and more reach regarding the fact that you have true believers?
I think it's great. Access is a good thing. At the end of the day, just because someone has access to something doesn't necessarily mean that they will or they won't wear it. It's about the personal expression of what they want to do.
The fact that they have access, in a lot of cases, going sort of back to Bobby's statement, it is just the distribution of it that make it hard and makes it challenging. That was just a function of logistics. First of all there used to not be the internet. And it was limited distribution. The only time and place you could get it was at the store or somewhere else.
Okay, just a hypothetical question, scarcity was mentioned a lot, people want to be unique. Couldn't you argue that providing access, providing transparency is a risk for a streetwear movement? Or, making it desirable?
What creates the scarcity is ultimately a brand decision. That supply exists. It's just about access. Because the internet has been around for a while, it's really just a function of how hard someone would have to work to get something. Or, the position we put them in of not knowing what a fair price is or not knowing what's real.
That's kind of almost like the underlying rule of what products can go on StockX. It's things that have finite supply. Finite supply could be five or five million. Either way, it's not a one-of-a-kind item. It's not something we think of as infinite supply like say, cereal. They will make as many Cheerios as people will buy. Then providing access to it, which can only be a good thing.
Where do you think the growth is? Is it in geographies, is this demographic segments, are there further categories? Is there something you could foresee as coming after streetwear?
Obviously we'll continue to go into other categories; whether that's collectibles or wine, or cars, or diamonds. But specifically with regard to what we're talking about and streetwear, one hundred percent what we'll see is the long tail become longer; and more single streetwear brands, single designers being able to create whatever it is, one collection or one piece or one season and be able to sell on StockX.
We make that acceptable. If you have a brand and you have a product that fits into that dynamic where it's finite supply, then it makes sense to be able to sell on StockX. We don't artificially constrain the products that go on StockX. It is almost always a function of what our customers ask for. As those streetwear designers, it becomes easier for them to create products and gain awareness through many of the other channels that are great. Like for Instagram, sort of just for mass awareness. We'll continue to add them, absolutely.
Sneakers are this thing where first of all, it's a pure supply and demand market. But it's also art. There's nostalgia tied to people's favorite sports teams, tied to their favorite athletes. It's a design thing. It just hits on so many things.
Even if you're not in the same category, almost everybody has some association with sneakers at some point; whether it's just for performance or for fashion or comfort or whatever it is. It just touches so many people in so many different ways. That's a really big part of the growth of the whole thing.
This interview has been edited and condensed for clarity.