Intro to the collector economy
How to turn brands into collections and products into collectibles
Welcome to the Sociology of Business. If you are not subscribed, join the community by subscribing below and share it with everyone you think may find it useful. You can find my book, The Business of Aspiration, on Amazon, and you can find me on Instagram and Twitter. For those new here, my previous issue featured the Sociology of Business Holiday Shopping Guide.
Collecting is the primary economic activity in aspirational markets. Aspirational markets are based less on the production of new objects and more on connecting things, experiences and places that already exist into collections.
A collection is a narrative that drives items’ desirability beyond their commercial value. Symbolic value of items in a collection is amplified through their associations with stories, histories, brands and personalities. A pair of Air Jordans that belong to Kanye’s collection are more valuable than the same pair sold by an anonymous seller on Grailed. Kanye’s sneaker collection reflects Kanye’s taste, creative identity and curatorial sensibility and this gives all the items in this collection an aura and halo of Kanye’s cultural influence.
Through cultural associations, collections accumulate social and economic capital that is used by collectors to convey their status and taste. Supreme is a collection of pretty much anything, from a t-shirt to a branded brick to Tiffany&Co heart bracelet, held together by Supreme’s urban neighborhood aesthetic shaped by the tight-knit community of skaters and DJs and hype beasts. Supreme’s story links its products to culture, removes them from their initial use and converts them into parts of a collection. This collection is self-perpetuating: Supreme various collaborations exert externalities on one another and on the Supreme universe. Once it’s part of the collection, a Supreme item accrues capital in context of its secondary market value. Media, cultural commentators, communities, collectors, critics, dealers and resellers and global brands all contribute to the Supreme narrative that amplifies its streetwear origins and participate in the definition of Supreme’s market value.
Our digital wallets and our social media accounts make us all collectors, and it turns our collections into capital traded in social, cultural and economic currency. Value of the Bored Ape Yacht Club NFTs collection is greater because design of its items are randomized. A rare item with a singular aesthetic, like a Bored Ape with gold fur, appreciates the entire collection. New airdrops also ensure that each collection is profitable, by constantly creating new differences and constant novelty: there’s an original 10K drop, there’s a mutant serum that transforms original Bored Apes, there’s a new Mutant drop … Thanks to their proof of ownership and their secondary royalties, NFTs power-charge the collector economy. NFTs also promise their collectors the future: if you acquire a Bored Ape, for example, you are part of something that’s happening and also something that’s about to happen.
Collections are increasingly relevant in how consumers assign value to things and in how brands manage demand for goods, services and experiences. Being a collector - and/or assembling a collection - requires active learning to appreciate things, and to transition from commercial thinking to cultural thinking.
Collections have no objective intrinsic value. Value of a collection is defined by the community of collectors and their willingness to pay for it. Social demand, based on the perception that a collection is valuable, defines its salability. In contrast to the traditional economy, the collector economy recognizes that taste is socially created, and that a community creates consensus on the value, rarity and desirability of a collection.
There are two ways for collections to increase their value:
a) absolute and relative rarity (the number of items in a set, and the number of the same items within a set), and
b) strength of a collection’s association to a story, aesthetics, identity and values (e.g. BAYC aesthetic mix of 1980’s punk, hip hop and literary references).
In addition to the rarity and strength of the narrative, the collection's value is in how the items within it are organized: in its organizing principle. BAYC connects all Bored Apes into a Club - a creative world in which collectors immerse themselves. Bored Ape NFT is a passport to enter this world. Some of the organizing principles of collections are:
Thematic collection. Items in the collection (products, experiences) are connected into a narrative and held together by a specific story. Donna Karan’s Seven Easy Pieces, Anine Bing’s Classics, “Core by COS” or Zara Origins are some examples. More creative examples include brand history and heritage, like Kanye’s Wyoming ranch and Ralph Lauren’s American Dream, and also stories around human creativity and ingenuity, like Hermès does in its annual brand themes. In this scenario, a brand’s artistic directors and creative directors become curators, which is something that we will be seeing more of: it is not enough for an artistic director to have their design vision. The strength of a brand is how good an artistic director is in using their vision as a curatorial filter in assembling a cultural collection, with their own designs being just one part of it (Alessandro Michele at GUCCI is doing a version of this, with his coherent aesthetic world and narrative-driven collections).
Temporal collection. In this type of collection, items are released serially and the set is meant to be completed over a period of time. This type of collection is a fertile ground for streetwear brands and “full look” fashion and luxury brands as well as experiences, where each item and experience pre-conditions release of subsequent ones. Completing a collection increases its value and the value of individual objects. The temporal collection model evolves the idea of the drop and turns it into a continuous drip of items needed to complete a collection.
Personal collection. Here, individual taste, creativity and curatorial savvy play a critical role. The most relevant thing with personal collections is for them to be intentional (e.g. items in my closet are not a fashion collection, they are a pile). But learning about, appreciating and amassing vintage Celine becomes a personal collection.
Community collection. This type of collection will be more prominent with the evolution of DAOs, where members of a DAO invest in acquiring objects for a collection and collectively own this collection themselves. DAO-based collecting simultaneously creates economic, social and cultural value, and creates a new class of owners and a new social class of investors and collectors. A recent attempt of a DAO to buy a copy of the US Constitution is an example, and is applicable to collecting anything from art to fashion to fine wines to real estate and beyond.
Conclusion: Turning brands into collections and products into collectibles
Collections have their own market logic, competitive dynamics and growth models. In the aspirational economy, where it is imperative for products to be differentiated, original, personalized, and connected by storytelling, collections are the mechanism for increasing brand value and opportunities for brand growth. With aesthetization of our everyday life, products and experiences we seek need to be meaningful, beautiful, artful and story-rich. They also need to be constantly reinvented and refreshed. Collections’ simultaneously ensure singularity, connectivity and continuity of items they organize.
On the brand level, collections work by creating an aesthetic and ethic universe in which experiences, products, stories and communities mutually enrich one another. Within this brand universe, collections are potentially infinite, as long as every new collection is linked to the brand history or story, starting with its name. The theme and the name of a collection should be meaningful within a brand universe and should echo a brand’s core experience promise. Each new collection has its own story that fits into the wider brand story and that renews it and furthers it.
On the product design level, developing a collection becomes a conceptual and creative exercise that focuses on creating a story and a setting that the collections’ items convey. Design elements like silhouette, color palette, details semantically link items together and make them different from other collections in the same brand (and from all other brands). Collections here emphasize one-offs and uniqueness of an item and randomization of its properties (color, elements of the brand system like logos and monograms). Curation becomes a critical part of the product design process, where each design decision is taken through the curatorial lens of the particular collection
On the merchandising level, curation plays an equally critical point of view. Merchants are curators, who connect items into a story and tell this story in a sequential, serialized and thematic way. This curatorial story that holds a collection together endows products with magic regardless of the number sold, releasing the constraints created by exclusivity principle that often blocks brand growth. It also protects brand equity and its pricing power and ensures high margins and growth while increasing price - because products that are perceived as collectibles command higher prices than commodities.
On the distribution level, collections work through creating smaller product sets, releasing incomplete sets with an element of surprise, or releasing a set over a period of time, in a sequential manner, so the collection needs to be waited for and slowly built. In this way, the demand for an item depends on having the other items in the series that this item will complete.
Last week, I was a guest on WARC talks. We talked about targeting taste communities, and why that’s relevant in the post-third-party cookie era. The evolution of targeting went from demographics to psychographics to taste communities, with implications for both product and audience categorizations. Listen to our conversation here.