Fashion’s Dupe Problem & Matthew Rhys Economy

John (0:00)

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Hanna Horvath (0:32)

In the age of dupes, how do you convince someone to pay for the real thing?

Dylan Lewis (0:35)

And should investors be saying, hands off my 401k?

Hanna Horvath (0:38)

For Friday, September 18th, in Spree Markets Daily, I'm Hanna Horvath.

Dylan Lewis (0:41)

And I'm Dylan Lewis. Let's get moving and grooving.

Hanna Horvath (0:46)

It's Friday, so we're rounding up some of the stories we wanted to spend a little bit more time on this week.

Dylan Lewis (0:50)

Yeah, I've got a story about the fight for your 401k dollars, and John's going to talk about his trip to the docks. But Hanna, you are kicking us off, and you wanted to dive into fashion.

Hanna Horvath (0:59)

Yes, because no matter how grumpy Americans are currently feeling about the economy, they are still spending on clothes. And we had New York Fashion Week wrapping up earlier this week, and we also had a stronger than expected retail sales that just posted. So I wanted to talk about the economics of fashion right now, because retail as an industry is feeling incredibly terrified around that selective consumer that we love to talk about. At the low end, you have those companies like Shien and Amazon and Tmoo that are making trends available faster and cheaper than ever. And at the very high end, you have Ultra Luxury, which is still quite resilient as the affluent customer keeps spending and are much less sensitive to price. And then there's that enormous middle. Brands that aren't cheap enough to win purely on price, but aren't selling you that $10,000 handbag. And that's the part of the market that I find really interesting, because these companies have to give you a reason to pay more than the cheaper brands. So Dylan, when you hear the term accessible luxury, what is coming to mind for you?

Dylan Lewis (1:55)

I think this conversation is gonna very quickly reveal how much of my wardrobe is thrifted.

I think it's a question of accessible to who, because I think for the average consumer, accessible luxury probably looks like more expensive than something actually needs to be. So maybe something like Koss, Lululemon, Ralph Lauren, maybe even Nike in that bucket with what we've been seeing with their sales. Basically, I think people would put that in that bucket if they are opting to pay more than they need to and doing it on purpose, because there are also more affordable options in that market.

Hanna Horvath (2:26)

Yeah, I would tend to agree with that. And I think that's where this explosion of dupes and the dupe economy is just making all of this so messy for these companies. You know, because if you love something you saw on the runway this week, there is a pretty good chance some version of it will eventually show up at Zara or Amazon for a fraction of the price. And dupes are obviously not new, but finding them has become unbelievably frictionless. You know, I can screenshot a $500 sweater, search on Google and get five cheaper alternatives within 30 seconds. So the big question here is that if the product itself can be copied, what exactly is a brand worth anymore?

Dylan Lewis (3:01)

Yeah, it's an interesting question because I think for me personally, I am huge on buy it for life whenever possible. And I like brands that really demonstrate that with their products.

For instance, I like Red Wings because the boots can be resold even after years and years of use. They can last decades for owners. Same thing with raw denim because they don't have elastane in it, which tends to break down a little bit faster. But with both of those examples, that is something I am choosing to opt into because it's an expectation of quality for me. It's not something that someone looking at me would even necessarily know that I'm wearing as a brand signal.

Hanna Horvath (3:33)

Yeah, it's interesting you bring up quality because over the past couple of years, there's been this shift where price is no longer necessarily an indicator of quality, especially in this messy middle. You can have brands that are selling things for hundreds of dollars that are polyester and not raw denim. And so it's harder and harder for the consumer to figure out what actually is good quality or not. And that's how you kind of get consumers being more choosy and selective about what they're buying. And then in some cases, just opting for dupes. And I was actually thinking about this with UGG because I own UGGs, I love my UGGs. But if you handed me an identical pair with no logo and said, these are half the price, I would probably buy them. And I think that brings us to some news that happened this month. Deckers, which owns UGG, sued Quince over its Australian Shirley Mini boot, argued it infringed on the design of UGG's Ultra Mini.