From big legacy brands to upcoming startups, all want to decode the needs of their future customers – the Gen Z. This generation is digital native, well connected and always on trend. Their appetite for newness, social sharing and video content is satiated by a new shopping model.
UNBOXING MYSTERY BOXES
LVMH, one of fashion’s most powerful player, has recently invested in a UK based Mystery Box start-up – HEAT. HEAT curates boxes with high value fashion products with a guaranteed minimum resale value. Items belong to luxury staples like Saint Laurent ; streetwear labels like Palm Angels and Off-White; and emerging brands like London-based menswear, Bianca Saunders.
If a customer likes the products, they keep it. Else, they can resale it while potentially making a profit. Now, this is too good to be true. Someone can earn money by buying a mystery box for themselves!!
What is the catch?
For the buyer, there is no catch. However, for the business partners of HEAT there is a huge potential. HEAT is positioning its unique offer as a powerful customer-acquisition tool. They have already persuaded over 60 labels to partner with them.
In order to grow, HEAT has focused on targeting a young trend-conscious consumer base. Julie Bercovy, head of LVMH Ventures mentioned “The loyalty and enthusiasm of the Heat community demonstrates the relevance of this approach,”. It has built a following of 630,000 on Instagram and 112,000 on TikTok. Thanks to viral unboxing videos and word of mouth.
“[Mystery boxes] are part of a broader phenomenon that we’re seeing. It’s a collapsing together of retail, commerce and entertainment,” said retail and consumer behaviour analyst Doug Stephens. It is an attractive method for discount-averse luxury labels to dilute their inventory. And an exciting way for consumers to experience luxury pieces from new labels.
What do you think of these boxes? Will you ever try one?
Do you think this model will grow in future? Or will it just fade away like a short lived trend?
By Shibika Mitra