Will Scarce, a High-End Streetwear Mystery Box, Save Brands From Nordstrom Rack?

Although “Mystery boxes” haven’t garnered the best reputation within the fashion and streetwear space, these boxes, which offer a random assortment of clothing for a set price, have recently popped up everywhere. You can find many of these mystery boxes, supposedly filled with “hyped” items, on Instagram or platforms like eBay. But some seller reviews on Grailed are bad—these boxes could potentially be desperate scams by shoddy resellers with nothing good to actually sell you. There are also legitimate looking websites such as Hybe that offer mystery boxes. Hybe’s version is like a digital slot machine, where buyers purchase and open digital mystery boxes, priced from $2-$378, with a click of a button in hopes of winning something like a Supreme x Louis Vuitton bag. But platforms similar to Hybe have been widely dismissed as scams that don’t actually award “winners.” Lastly, there are monthly subscription mystery boxes from Threadbeast and Stitch Fix, but their offerings aren’t hype, trendy, or coveted. But Jacob Metzger and Yossi Shetrit are trying to elevate and legitimize the mystery box experience with Scarce.

Scarce is the first mystery box designed for those who follow high-end streetwear and fashion. Metzger, who co-founded Grailed, and Shetrit, Scarce’s Brand Director, wanted to figure out a new way to help luxury brands move excessive inventory, which doubled this year due to COVID-19 store closures. Scarce provides an alternative for brands and retailers with excessive stock who are relying too heavily on discounts, stressing their warehouses by saving overstocked products for 2021, and creating unnecessary waste by destroying overstock. By merchandising their products through Scarce, Metzger says these clothing labels maintain their brand equity by not selling their garments to retailers like Nordstrom Rack or Saks Off Fifth. With Scarce, the consumer gets a box filled with random items from desirable brands like Off-White and Rick Owens at a fraction of its true retail cost.

The first Scarce drop only consists of 130 boxes that customers can purchase for $398, $698, and $2,000—the first tier of $398 boxes have sold out within the first day of launch. Today, to supply the demand, Scarce is now dropping a limited assortment of $150 mystery boxes with brands like Vlone, Antisocial Social Club, Takashi Murakami X Complexcon merch, and more. We spoke to Metzger and Shetrit to learn more about how they source product for Scarce mystery boxes, how brands benefit from it, what items are included in each box, and what to expect from future drops.

How did you come up with the idea for Scarce?
Jacob Metzger: Yossi and I have been working with this guy, who is a long time veteran of the garment industry in New York. He’s basically picked up a number of sources for overstocked and excess inventory from all over the place. Retailers, factories, and brands in New York and Europe. So, he’s been moving this stuff in various ways and it’s been a little bit low key. Yossi and I really wanted to kind of modernize his operation by being able to move more of this excess inventory in different ways. Through different distribution channels, we can help reduce waste in the industry, give people more access to some of this amazing clothing from past seasons and current seasons at a greater value, and celebrate old stock in a way that hasn’t really been done in the past.

You’ve obviously seen this done in places like Century 21 or these deep discount, big box, retailers. But that whole landscape is changing with the closing of all these businesses due to the global situation. In this time period, we’re just trying to find new ways to celebrate this inventory, move it, and make the entire industry a little bit less wasteful. Scarce is kind of our first foray into that arena, aside from the way that this guy moves inventory already.

Eventually, we want to build a platform similar to YOOX, but just a bit more curated and more content-focused, to really highlight and celebrate the pieces that we have. They’re incredible pieces from past seasons that have been overlooked or overbought by certain stores. For us, it’s a chance to reclaim these items and get them back in the world. And similar to what we were doing at Grailed, it gives new life to some of this clothing that was overlooked.

Yossi Shetrit: It’s all brand new clothing and some of them are from current seasons. The whole idea is just to bring new life to them and get consumers excited about pieces they missed and re-merchandise it in a way where it’s still fresh and new. It’s a great value and you’re getting more than what you pay for it. There’s some pieces in there you could even resell so you’re definitely going to see the value within each box.

Did you guys have this idea for a long time?
JM: Scarce itself has been in the works for three or four months now. But I’ve been brainstorming with Yossi and this contact of mine for six to eight months on how we wanted to repackage some of this merchandise. He’s getting massive amounts of it, right? With all of the retail and brands that are struggling, there’s just a glut of inventory. We don’t want to see that get thrown away. Don’t get me wrong, he’s doing up to a million dollars of purchasing of these goods. So he’s buying massive quantities. So some of it’s good and some of it’s not so good. We want to take the best of it and repackage it.

What brands will Scarce offer? What kind of products can I expect if I buy one of these mystery boxes?
JM:
The brands are going to differentiate by the tiers of the boxes. So the bread and butter box is this $398 box that’s going to have brands like Off-White, Palm Angels, Heron Preston, A-Cold-Wall*, Comme des Garcons PLAY, and other staple streetwear brands.

YS: We may introduce one Amiri piece if we want just to throw it in there. But in our second tier box at $698, that’s where we would have Rick Owens, Dior, Moncler, Amiri.

JM: The $698 boxes are going to be more designer-focused and include luxury streetwear while the $398 box will include Off-White and brands at that level. We’re also going to have like a $2,000 wardrobe box with a mix of everything. This would be a chance for you to really fill out your entire wardrobe. Eventually, we’re going to have a less expensive box that’ll be more streetwear focused.

So what’s the estimated retail value of each box?
YS: The $398 box is going to have a retail value of $700-$900. The $698 box will have a retail value of $1,100. And the $2,000 Wardrobe box, where you basically get a full outfit, would be like a $4,000 retail value. We’re limiting how many boxes we’re selling so we can have a great curation in each box. We are selling 100 $398 boxes, 25 $698 boxes, and five $2,000 boxes.

We’re also going to release a Women’s $398 streetwear box, which is going to include the same brands as the first tier, which is like Off-White, Heron Preston, Casablanca, Rhude, and others.

How do brands benefit from working from Scarce?
JM: Brands just want to move items discreetly, right? I think what they really prioritize is making sure they maintain their brand equity. They don’t want to be seen as a discounter or see themselves on sale. And I think our primary motivation for us when we work with brands is to protect that for these guys. We don’t want to be putting their stuff on the shelves of Century 21 because that is not what their motivation is for getting rid of old stock. That being said, they still have a need to move this stuff, clear space in their warehouses, and earn some money for the overstock that they have. It’s a symbiotic relationship with brands in the sense that they need to move this stuff, get some money for their goods, and we want to move this stuff as well for them while still maintaining the discretion of this brand equity for them. So that’s the deal they want.

On top of that, the motivation we have is to be sustainable. I think that the fashion industry being the second most wasteful industry in the world apart from the energy industry, is something that’s on top of our mind for a lot of these guys. But how can they move that stuff while maintaining this aura of a luxury company? It’s through companies like ours because we’re not openly chatting about each item and what discount rate we’re giving them. We’re not talking about the brands specifically. We’re just giving people some overarching options. And so it’s really us getting rid of stuff quietly, but in a way that celebrates the pieces and gives people an amazing value. Because everybody wants a taste of luxury streetwear goods they can’t afford themselves.

YS: We’re giving consumers a way to get excited again about these things. And the fact that it’s merchandising with other brands, brings more value to it. I think we’re also exposing these companies to a new demographic, our customers. It gives this clothing a new life and it makes it exciting too. It can also be something that’s given to a friend for the holidays or events like that. So it’s just a new way to shop.

Do you guys have a target consumer for this box?
JM: It’s a multi-targeted approach. We do want to go after the younger folks who are in their late teens, early 20s who have not been able to experience brands like Off-White due to prohibitive retail prices. We want to make sure we get boxes to those guys who can really get a chance to experience multiple pieces for the price of one piece at retail. But, at the same time, we also want to attract savvier folks who have been into streetwear and fashion for a long time but are a bit more budget conscious and still love these brands. They want to get that Mona Lisa or Caravaggio hoodie from Off-White or Rhude track pants, but are a little more conscious about what they’re buying.

And resellers are also going to purchase them as well, right, because you’re going to get three or four pieces in a box. Maybe you want to keep two and resell the others to cut the cost of the box. There’re options for everyone here.

COVID-19 really impacted this concept you came up with, right?
JM: A hundred percent. It really came down to the fact that a lot of these companies basically have excess inventory since people aren’t shopping retail as much. So these brands still need to make money. They still need to move this inventory. But they just haven’t been able to due to the troubles. We don’t want to be seen as taking advantage of opportunities like this. But, at the same time, when needs arise, it’s up to people to come up with creative ways to address some of those things. That’s what it came down to for us. These brands don’t want to go to the Nordstrom Racks and the Saks Fifth Avenue to get rid of their inventory in bulk because of COVID. So it gives us an opportunity to bring something new to the table and a new solution..

You don’t have to buy a subscription or anything to participate in this, right?
YS:
We’re going more into a drop model. The first drop you can get is this week on Dec.17th. From there, every couple weeks we’re going to be doing more drops that are limited. So when we do get new assortment and new product we’re able to take the best of what we got, re-merchandise it into a box, and do new drops. So there’s not a subscription where every month you’re going to get one. But there will be a drop every couple weeks where you have an opportunity to be able to purchase these incredible boxes at a great value.

JM: To that point, we’re constantly getting new merchandise and it’s incredible stuff. I’m seeing some of the line sheets and our suppliers have thousands of units of really amazing pieces. And so we’re excited to bring those to our audience.

What types of items can I expect? Will it consist of a T-shirt and socks or something? Or is it completely random?
JM:
At the end of the day, people just want dope pieces and they want a good assortment. No one wants to get a box with just three random T-shirts. That’s why we’re only releasing a limited number of boxes. We’re really working hard to merchandise these things in a way that people are going to be really excited. So in a $398 box, you should expect to get a good assortment of tops, maybe some bottoms, and accessories. We have a wide variety of pieces. So we’re really going to try and make sure people are getting that variety.

YS: On top of that, when the shop is live, we’re also allowing the consumers to actually choose one of their favorite brands. So let’s say they choose their favorite brand as Off-White, we’re more inclined to put an Off-White piece into that box for them. If they chose Palm Angels, we’re more inclined to give them a Palm Angels piece. So it’s going to be a little bit more curated to each customer in that sense.

JM: There’s going to be sizing as well. So we want to make sure that people are getting the right size and some selection of something they’re going to be super excited about.

So you can set your personal preferences to that extent, choosing what brand and what size and stuff like that?
JM: Right, so it’s not going to be an entire mystery. We don’t want someone to get a bunch Off-White when he wants Rick Owens. We don’t want some hypebeast to end up with a bunch of drapey stuff that they’re not going to wear. So that’s really the motivation for us, to get people something they’re really going to enjoy.

Can you return or resell items even directly through this platform like Scarce or not?
JM:
We’re going to let people return as long as, obviously, all the pieces are still there. So we’ll have a return policy. People can return goods if they want. But we are definitely encouraging people should that return window run out to definitely try and use platforms like Grailed to sell any items that they’re not happy with. But, obviously, we want to accommodate that. So we will be offering returns, for sure.

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