Can Mystery Boxes Save Fashion Retail?

Last week, on a humid afternoon in New York’s Lower East Side, the co-owner of a large new fashion boutique was considering the competition. “Everything is on SSENSE,” said Laura Baker. Baker was standing inside the 7,000 square-foot concrete space called, in the style of the day, ESSX—a new retail store that’s aiming to muscle into the crowded marketplace for advanced contemporary designer goods.

Backed by a $7 million investment from a group of retail and real estate investors, ESSX nevertheless has its work cut out for it. As Baker points out, SSENSE, the Canadian e-commerce juggernaut, has a brand list a mile long, from big luxury houses to niche micro labels, and a sophisticated marketing and editorial apparatus. So do SSENSE’s competitors. This thriving e-comm ecosystem has been a boon for fashion consumers, who have more options and can take advantage of competitive sales that seem to get steeper and start earlier every season. And it’s been rough on brick and mortar boutiques, who often can’t compete with the web giants on pricing.

“I’m guilty of it too. When I see something in a store, I immediately look it up to see if it’s on sale anywhere,” Baker, a veteran fashion wholesaler-turned-buyer, told me. To survive and thrive in this environment, Baker said, “We’re going to have to be really creative.”

Enter the designer “mystery box,” an e-comm innovation that the ESSX team thinks might save retail (at least in their corner of the LES) from fashion’s discount death spiral. ESSX is backed by Scarce, a service that packages an assortment of overstock and end-of-season designer goods and sells them to customers at a discounted rate. A Scarce “staple streetwear” box, which might include a mix of brands like Amiri or Off-White, sells for $398 and can have a value of up to $1,000.

Scarce, which was founded in 2020, claims it’s the fastest-selling of a crop of mystery boxes that have emerged to help brands and stores move products that would otherwise cram sale racks. At ESSX, there will be no sale section. When the e-comm outlets start their seasonal markdowns, ESSX will start selling Scarce boxes tailored to customers’ sizes and brand preference. The idea, according to Scarce co-founders Yossi Shetrit and Abe Pines, is “A sustainable solution for brands to uphold their value and exclusivity. This approach ensures ESSX and its affiliated brands don’t have to compete with their in-season products, allowing them to maintain focus on their latest collections and avoid diminished sales.”

Mystery boxes are popular in the streetwear world, but ESSX is hoping they catch on with a customer who is more interested in fashion labels like Martine Rose and 4SDesigns, both of which are stocked at ESSX. That afternoon, it was about a week out from the grand opening, and a few contractors were popping in and out of the dressing rooms. Designed by architecture firm Leong Leong, the store is bright and photogenic, with a squiggly wall stretching between racks of clothing, and a glass cylinder in the front containing an assortment of vintage black graphic T-shirts sourced from an unnamed vintage dealer. “He has a huge celebrity clientele,” Baker said, tidying up the hangars of faded Grateful Dead and Yankees tees.