Saturated with major establishments like Barneys and Bergdorf Goodman, Santino LoConte saw a void in New York’s retail landscape for highly curated streetwear stores with a fresh voice. He set out to innovate a technology integrated retail concept called Reign, which he launched in late 2017 in partnership with Samsung C&T Fashion Group, a parent company of tech giant, Samsung, which focuses on global fashion industry investments.
Encompassing 150 square meters of retail space and a private courtyard, Reign is outfitted with Samsung’s latest tablets and touchscreens. “It was a no-brainer partnering with Samsung Fashion Group,” says LoConte. “As a readily available platform with extensive experience working with leading fashion brands, they are a great resource as opposed to going to a bank and financing our own inventory,” he adds.
Samsung's involvement is primarily back-end focused including general logistics, the importation of goods, warehousing, and drop shipping for online orders. “They do it all for us so it releases financial pressure on the business,” explains LoConte. On the consumer end of the spectrum, Reign's Samsung-powered in-store app provides brand and product information and acts as a styling tool, featuring exclusive store-produced content like lookbooks and editorial imagery.
Ayako Homma, beauty and fashion consultant at market research firm, Euromonitor, suggests implementing omnichannel strategies into the physical store model is now essential to engage consumers: “As digital and physical begin to merge, retailers should incorporate new technologies in-store to elevate the shopping experience and make it more convenient."
Reign's product selection is curated to museum standard, resulting in a solid minimal aesthetic. “This allows our items to stand out and consumers seem to gravitate towards our tablets and visually engaging app content as soon as they enter,” says LoConte. He believes the simplicity of having an app means consumers get to know the brands more intimately. “I definitely think consumers are willing to spend more if they interact with the technology because it’s an easy way for them to connect with the brands and products they are touching, feeling and trying on.”
Euromonitor’s Homma suggests this is because technological advancements are changing consumers’ spending habits and thus the perception of luxury has evolved. “Luxury products were once perceived as status symbols, indicating success and wealth,” she explains. “However, modern luxury consumers place less importance on exclusivity, prioritising personalised relationships and connected experiences with luxury brands instead,” she adds.
The store's brand mix ranges from established names like Alexander Wang, Acne Studios and Issey Miyake Men, to up-and-coming designers like Astrid Andersen, Juun. J, and Public School. LoConte suggests there is a higher response for emerging brands, with one of their biggest sell-throughs being Berlin-based publication-turned-fashion-label, 032c. “We’re seeing a much higher return on investment from working with smaller, niche designers, which are not over distributed or anchored in department stores too heavily.”
He outlines other recent successful collaborations like Italian casual wear brand, Napajiri, and emerging designer Martine Rose. In the first week of launch, the collection, featuring items upwards of USD$1,000, had over 60 pieces fly out of Reign’s doors. A limited edition sneaker collaboration between Adidas and Alexander Wang sold out in mere minutes. “I think our consumers now expect these smaller brands from us,” he states. “For them, it’s more about the discovery of under-the-radar brands and anticipating fresh collaborations.”
“I definitely think consumers are willing to spend more if they interact with the technology because it’s an easy way for them to connect with the brands and products”
Reign’s unique retail strategy fosters a strong community, particularly with the launch of Releases, a platform dedicated to limited release sneakers. Using an online registration format, customers sign up for a desired sneaker release and Reign's backend systems will allocate stock at random. Products then require in-store pickup and purchase.
“We realised our limited edition sneakers would fetch better with their own platform, rather than mixing in with the rest of our brands,” explains LoConte. “It’s a system that creates excitement and keeps consumers coming back for new releases.” For the first edition, a reissue of the Adidas Yeezy Boost 700 Wave Runner secured a staggering 23,000 signups within the initial 48 hours. LoConte mentions that not only has the platform generated huge intrigue, it’s helped them convert potential leads into long-term purchasing customers.
Benjamin Schneider, a research associate at Euromonitor, points out that this ‘drop-culture’ retail method – an exclusive release of products that are here today, gone tommorrow — is nothing new, but it continues to remain successful for luxury streetwear brands. “Adidas recently launched an app called Confirmed, which enables users to reserve time slots to purchase exclusive sneakers,” he says, adding, “this allows them to skip store lines and guarantee a pair on release days.” Schneider also references a partnership between lifestyle news site, Highsnobiety, and Barneys New York, which launched a two-day in-store event called the Drop, in October 2017. It featured over 30 exclusive streetwear capsule collections, and due to its success, they launched a second event in Los Angeles in June 2018.
Can a retailer who relies heavily on digitising physical experiences capitalise on it online? “Although we launched our e-commerce platform the same day as our store, the business currently functions at 70 percent in-store and 30 percent online,” LoConte admits. He discloses that Reign's e-commerce transactions are more frequent, with an average retail ticket of USD$300, but in-store purchases sit much higher at USD$800. He suggests that higher-priced, seasonal-based items fair better in-store because they have longer lead times and longer shelf lives, whilst products with instant hype are more in-line with the rhythm of the internet.
Homma proposes that whilst digital connectivity can help gain exposure to a wider audience, it can also alter the structure of competition and the conduct of business. “Generation X and baby boomers remain key demographics for luxury brands and retailers, as they represent large shares in high net worth individuals.” She adds that digital commerce could pose a challenge for these target markets as they may not be as digitally active as younger generations, in terms of browsing and purchasing luxury goods online.
Building a community is at the core of Reign's ethos; a place to connect with streetwear and sneaker enthusiasts, especially through regular brand and product launch events complete with DJs, cocktails and barbecues in the courtyard. Further down the line, LoConte aims to continue working on exclusive collaborative projects and building an online presence. “It’s important, for at least the next three years, to lay claim to New York and build our connections within the local community here,” he says.