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The Business of Building Hype

Two men building hype on a blue couch.

This talk was originally presented at Commerce+ in 2019 in New York. In this series, we've pulled together relevant talks from our past events in Sydney, London, and New York City.

What is Commerce+

For the last two years, Shopify Plus has hosted Commerce+, a global thought leadership conference that brought together industry leaders to share their knowledge and best practices in the ever-evolving world of commerce.

During this talk, Babba Rivera, CEO of By Babba, chats with Nick Annacone, COO of Kith, and Nate Brown, Creative Director at Studio Institute about the business of building hype and how they create stand-out brand experiences.

This transcript has been edited for clarity.

Rivera: I’m here with Nick the COO of Kith, a lifestyle brand for men, women, and kids. They have five brick-and-mortar flagship stores, which were all designed to push the boundaries for what's possible when it comes to consumer experiences. And I also have Nate here. He is the creative director behind some of the world's coolest designs out there in hip hop, fashion, and consumer goods. He has worked with some big names including Beyoncé, Kanye West, Jay Z, and some really cool brands like Kith and Nike. He's also the founder of his own full-service creative studio called Studio Institute, which he’s been running since 2014. 

Let’s start with the basics: the word “hype”. What does hype mean to each of you and would you say that there is a marker to know when or if you have achieved hype status?

Annacone: I think for us it's just about bringing energy or anticipation to something and I think hype can be used in multiple ways, but for us it's our business. We have all of these retail establishments, activations, and fashion shows, and for us to drive people to our site and engage people, we need a bit of hype to do it. But the [metrics] we use most [are on] social media.

Brown: Hype is a funny word and I don't know if I'm the right person for it. We don't use that word as an indicator of a project that we might be working on. Are we telling a story and is there a purpose in that story that we're telling? Also, are we able to think about certain things outside of the norm and ultimately bring delight and wonder and joy into someone's experience? 

I think the ingredient that can develop the hype component is really about limitations or limiting something or using influencers or celebrities in a way where access is achieved at certain points. 

I think if you were to define [hype] in a sense of how we work on it, it's a project that just does really, really well. 

Rivera: Yeah, cool. And speaking of products that do very well, both of you have worked a lot on collaborations and I think maybe collaboration is becoming a bit of an overused term in the industry. Could you tell us a little bit of how you frame your partnerships and what is it that you look for when you're looking to partner with a brand? 

Annacone: We've been very successful in this area and I think the reason why is because when we pick our partners, we either have a genuine appreciation for the brand, the person, or we see some sort of brand synergy. I think that the reason that it's just gotten diluted is because it's just slapped names beside each other these days, and there may or may not be a genuine story behind it. 

What we do very well is we can tell a story. A lot of our stuff is derived from Ronnie, the founder of Kith, from the nostalgia of the '90s and our creative team. We look back at brands like Nautica, Tommy Hilfiger, and Polo in its heyday, and we look at these brands like they are legacy brands. They've withstood the test of time. 

That's what we look to partner with because that's where we see ourselves going—being around for 50 years. That's obviously the goal. 

But I really think that telling a genuine story and not just throwing names together is what makes things successful. You can't tell a story without having a genuine appreciation for somebody or why something works and why it meshes.

Rivera: Yeah. Nate do you have anything to add there?

Brown: Yeah. I think the way that we partner with brands is obviously very different from the way that you partner with brands being a product company and we're on the agency experiential side of things, but we look at it very similarly. Through our vetting process, we ask ourselves, “Is the product authentic to the founders? Does it tell a meaningful story? Is it something that the world needs? Is it adding more waste to the environment? Are there considerations and intentions put towards why this thing might exist in the world?”

For us to do the best job that we can do, it has to come from a place of truth and that truth has to come from an incredible founder that believes in a product and that knows that they can succeed or has a strong inkling that there's a success there. When we come in, we’re just adding value on top of that. So I think there's probably a lot of similarities to how Kith looks at collaborators and how we look at our brand partners and people that we might work with within the studio.

Rivera: Sounds like it keeps coming back to authenticity.

Annacone: Yeah, absolutely. I mean, customers are smart. They see when something is just thrown together and they see when things have a genuine meaning and have a real synergy.

Rivera: Nick, in an interview with Women's Wear Daily, Ronnie said that the shopping experience shouldn't just be someone walking in for a product and walking out. What should that experience be? And what do you guys deliver for Kith?

Image from Business of Fashion

Annacone: The way that we've always viewed it is exactly like that. And it's funny: When we first opened up the New York store, it's a three-story building. We had Kith treats, which I'll get into later. But we had a mini gallery with Daniel Arsham. We had an activation space with footwear for both men and women. It's very compartmentalized and there's a lot of different things that you can do. 

In the first week, we had a line outside of the store for—I don't know—halfway down the block. And I'm like, “Yo, we should let more people in.” And Ronnie’s like, “No.” And I'm like, “Okay, can we talk about this?”

Rivera: Why?

Annacone: And I'm like, “But these guys, you know, a lot of people are coming from all over the world and like they're not getting this experience.” And he just looks at me and he goes, “I'd rather have them have no experience than a s—-y one.” 

That's what it is and that really resonated with me because he's like, “I'd rather them not get it this time and get a great one when they come back.” He doesn't want people leaving there feeling like they didn't get to understand what Kith does. 

Image from Kith

And I think Kith treats is the perfect example of it because half the time people walk into the store and they're like, “Yo, where's the ice cream?”

Annacone: And I'm like, “Okay great, it's on the second floor.” But having this cross-pollination of that customer, because then they get ice cream and they're like, “Oh great, they actually have shoes. Maybe I want a pair of these, these are cool.” Being able to jump from thing to thing, it's sort of sensory overload at Kith, which is what we want. We want people to be like, “Now, this was my favorite part. This is my favorite part.” And for me, it's anxiety-inducing walking in there because I want things to go faster and I'm just looking around thinking about things that I can fix. 

Rivera: You're the ops guy.

Annacone: Yeah, I'm the ops guy. But that's also why Ronnie and I worked so well because he says something like that and I'm like, “I get it. You're right.” You want to leave people wanting more and you don't want to leave them with a bad taste in their mouth.

Rivera: When you create and design experiences, is it all about like human touch and connection, or do you set more traditional business goals behind experiences as well?

Brown: That's a really great question. I feel like I'm the creative that creatives hate when I answer this question. First of all, if it's a brand partner versus an artist partner, I think the goals automatically are different. In the context of this conversation, if we're working with a brand partner, absolutely. We sit down and we say, “What is it that we are trying to measure against success here?” 

Creating something in a vacuum purely for emotional recall to me is sort of a job wasted. It's all going to come down to storytelling, and if this story will do the best job of telling a product story from the brand's perspective. So we approach it goal-oriented first, it doesn't necessarily mean that we're trying to automatically apply success metrics to it, but we do look at it from the lens of, “How can this communicate?” “What is the brand trying to [say] in a really effective way?,” and then we [apply all] the fun… awesome, creative things that we can to make it as sensory as possible and emotive as possible.

Rivera: What are some common goals there that brands normally come to you with?

Brown: [Within our studio, if] it's a big brand, it's generally to maintain a level of relevancy or reclaim a level of relevancy. If it's a new brand, it's generally to just build brand awareness. And that could mean growing social [or] it could mean driving website sales. [If] it's a brand that has a brick and mortar, [it] can mean driving physical retail. Or it could just be just trying to get people to understand and have the brand on people's tongues. So I think the goal is even within industry leaders and younger brands that are starting out are also very different.

Rivera: Nick, you were talking about the experience of your retail store. How does Kith continue to create an emotional experience for consumers?

Annacone: We always think about it from an experience perspective first. Obviously we're running a business and there has to be some sort of revenue… that's obviously what the ultimate goal is. But we always think about it from that perspective. I think even talking about fashion shows, which Nate has been involved in the past, and the trips that we do, the activations, all of it is around product, but it's intended to be an experience first. 

Image from Kith

And if you look at our stores, I keep going back to retail, we carved out a third of our space on the footwear floor, as footwear is a huge piece of our business for just an activation space. It's not shoppable, it's just there. So people can go in and see Tommy Hilfiger, for example, when we have all of these nautical pieces in a sailboat in our activation space.

Rivera: Nate, your studio designs a lot of experiences for brands. For a brand that is just starting to think about their own brand experience and ambience, where should they start? And do you normally have a checklist of things that they should have covered before they come to you?

Brown: There's not so much a checklist, it's just intention setting, like what is it that we're trying to do? I think that “experiential” is a very interesting word because the definition is quite ambiguous. What we find is that a lot of times the expectation around experiential in the context of a younger, [smaller] brand that might not have as much width or visibility in the marketplace, is automatically: “Let's do a pop-up shop.” We've done a lot of pop-up shops and what I think a younger brand can get some learnings from is that experiential can happen at any point along the consumer's journey with you as a brand.

Rivera: Cool. You're both very collaborative with the arts industry. Blending business and artists is such a collaborative process, but there are also many ways that it can go wrong. What is the key, in your opinion, to making it successful?

Annacone: It's collaboration and understanding. Even for the design of our stores, I'll always get [new ideas]. I'm like, “All right, that's awesome, but we need a cash wrap somewhere.” It's finding that balance of making sure that things are beautiful and also functional. I think that's on my side: I hate when people that are in operations, and I say it a lot jokingly, say, “I'm not creative,” and I just feel like in general, if you're solving problems, you're creative. You have to use your creative thinking to come up with, “Okay, we have a hurdle here. How do we get over it?” And I think on our side it's always a little bit of a tug of war. It comes down to the people and understanding that the common goal needs to be beautiful, [but it] also needs to be functional. Let's take this artistic vision and actually make it happen. 

Rivera: Yeah. Nick?

Brown: I love this question. I think that they're not exclusive [of one another]. 

Rivera: Business and art.

Brown: Yeah, we somehow automatically separate them. And the most successful artists are businessmen and women and the most successful brands are some of the most creative in the world. The key tip for us to making it successful is that at no point in the process do we separate the two. They're always next to each other.

It doesn't dampen or hinder the creative process that’s being had on a specific project. But the creative process doesn't dampen or hinder the financial or economic goals of what that product might be. If it's a pop star, they think about it very much from a business perspective. So you have to at that scale. We just don't look at them as exclusive from each other. We look at them as just married throughout the whole process.

Rivera: As one.

Brown: Yeah, as one.

Rivera: When you're doing something limited to create scarcity, how do you decide when you're going too small or too big?

Annacone: From a product perspective, I feel like it's tough because we want things to be scarce to a degree, but you also don't want to not sell to 99% of human beings that actually want the product. We tear off the product at times where we have our collaborative things that tend to be more limited. And then we also have our fall and winter capsules, and spring and summer are intended to live longer. So I think finding that balance and really understanding what the intention of a capsule or a release is and predetermining that, that's the only way you can.

We really want to get a range of these “limited releases” and also have this stuff that people can come in and buy. So one thing that we've done is we've created an in-store only program so that when somebody comes from Denmark, they can go into the store and buy something Kith. That's what they're there for. So understanding that balance and figuring that out was really important to us actually.

Rivera: How do you balance growth financial goals versus brand experience and how do you define a successful year? Big questions.

Annacone: We do projections in the beginning of the year as a company, but it's always derived from the experience—that's always the goal. And figuring out where along the years we can have these spikes of business and maintaining this level of cash or whatever it may be. But for us, success is growing. And we've been fortunate enough that we've been scaling at such a fast pace, which [is] going to normalize at some point. But we've been very, very resilient. You see certain brands especially in fashion right now, it's not the easiest place to be. I commend everybody that has a fashion brand because it's not an easy business. It's actually very, very challenging. 

Brown: Again, I don't know if it needs to be a versus. I think that brand experience needs to be part of your growth as a brand. To me, brand experience drives financial success and growth.

This article originally appeared in the Shopify Plus blog and has been published here with permission.

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