LONDON — Are today’s consumers ready to start paying for luxury fashion items they haven’t selected themselves — or even seen before?
The answer might be a resounding “No” for many, but not for Generation Z shoppers with a soft spot for streetwear and YouTube.
That explains why, when the London-based start-up Heat unveiled its first set of mystery boxes last year, it sold more than 1,000 within 20 minutes of going live. The boxes, priced between 300 pounds and 500 pounds, offered items by some of the most in-demand streetwear brands.
The company’s audience for that first set of boxes was 94 percent Gen Z males, who’d caught wind of Heat’s launch while watching their favorite YouTube stars unbox their own Heat goodies on video. These included items such as Palm Angels track pants, Off-White tees and Vetements caps.
“The trend had already been picking up on YouTube because it provided great content. You could buy a box and end up with ten times the value [in products]. The only real reason it wasn’t huge was because there was no guaranteed value when you bought these boxes out of a platform like eBay,” said the company’s managing director Joe Wilkinson, who founded Heat with a group of friends who had worked across the fashion industry.
Their aim was to add a new level of professionalism to the mystery box game: Through Heat, customers are guaranteed authenticity and products with a value higher than the total cost of the box.
From the brands’ perspective, Heat was an appealing outlet for surplus stock. By partnering with Heat on the boxes, they don’t have to discount the stock, or find other ways to shift it.
“A lot of brands don’t want to put their excess stock on sale or dispose of it in landfill. They need a new way of getting rid of the stock that protects the brand values,” added Wilkinson. He said the company began by sourcing product directly from department stores, but soon brands with similar surplus stock issues came calling.
Now Heat is working with more and more brands directly, and expanding its scope beyond the streetwear niche to men’s and women’s contemporary fashion.
The COVID-19 outbreak, and all the financial and social implications it brought, has only served to fuel demand, with Heat now having sold more than 10,000 boxes since March.
“We were worried that with the COVID-19 nobody would want to buy a mystery box and spend their money at this time, but it just went crazy. People were looking for that at-home shopping experience, since they couldn’t go to the stores,” said Wilkinson, pointing to the company’s commitment to turning its mystery boxes into full-blown experiences, with every detail down to the scent a box is sprayed with being considered.
Amid the lockdown chaos, the boxes became popular outside the male streetwear niche and extended to the contemporary and luxury sector, across men’s and women’s categories.
That’s why Wilkinson and Heat’s buying director, Mario Maher, spearheaded a re-brand this summer, with a wider range of men’s and women’s contemporary fashion boxes featuring products from Loewe, Jacquemus, JW Anderson, Casablanca and Haider Ackermann.
“Everybody wanted boxes as long as there was something in there that suited their style,” said Wilkinson, adding that new features are in the works. Customers will soon be able to build personalized style profiles to ensure the products they receive are in line with their preferences.
The Heat audience has since diversified to a 65 to 35 percent male-to-female ratio, with women buying boxes for themselves and as gifts.
The company evolved from its initial focus of sourcing previous seasons’ stock that would otherwise have been discounted or discarded to working with brands to launch products via its mystery boxes.
“It’s really turned into a customer acquisition and marketing tool for brands. They now come to us and say that they want to get new season products into the boxes. Because so many influencers are opening the boxes on their Instagram Stories, people are seeing the products and want to go out and buy them at full retail price,” said Wilkinson.
This way of working with new and old season products allows Heat to offer added value to its customers and keep them coming back for more, while brands get to experiment with a different way of selling and talking to the sought-after Gen Z and Millennial consumers.
“Brands have been coming to us through referrals, say, from their wholesale directors, so we’ve seen organic growth. We are aware we are a new chapter for these brands,” said Maher, adding that it’s only a matter of time until more brands, including the big luxury names, come around to this way of selling and communicating with the customer.
“I think very soon we’ll be working with the really big names,” added Wilkinson.
The next stage for the company is to collaborate with brands on exclusive product that will only be available in the boxes. A series of luxury designer collaborations is already in the works, while tie-ins with influencers, who can collaborate with Heat to curate boxes, are another focus.
“We’re really trying to get people at the forefront of not just fashion but other industries as well,” said Wilkinson, name-checking the likes of the model, actor and producer Luka Sabbat and the DJ and designer Peggy Gou.
The thrill of the surprise of the mystery box — and the engaging content opportunities it presents — has been naturally drawing influencers to Heat since Day One, without the company having to run the kind of paid-for campaigns that online audiences are growing increasingly wary of.
The influencer buzz has also led Heat’s own account to amass more than 600,000 followers within 12 months.
To keep up with this momentum, a children’s category is also in the works, as well as a subscription service that will be more focused on providing a series of monthly basics from Heat clients’ favorite labels.
“The idea is that you can log in and buy for everyone in the family,” added Wilkinson.