Anatomy of 'The Drop'
In the tenements of New York City in the late 19th and early 20th century, apartments were built with bedrooms on top of one another. It was common to hear your upstairs neighbour take off a shoe, drop it, and then repeat the action. ‘The Drop’ became shorthand for waiting for something you knew was coming, whether that was good or bad.
Fast-forward a century and ‘The Drop’ emerges as the psychological anticipation of the bass drop in variants of dance music from Hip Hop to Trance, signalling a significant and euphoria-inducing outcome aligned with one’s investment in the evening, a shared experience with fellow humans and its desired outcome within a moment in time.
I am sure we are all familiar with the reference yet it is but another weapon in the marketing arsenal of hype. Through the use of social platforms it has become the must-do activity and, just as with poor collaborations, has become more of a boardroom demand rather than the creative execution that fuelled its inspired origins.
Anyone with long experience in the retail sector might recall a conversation with a CEO who may have idly read their wife’s Vogue and demanded on Monday morning that one must create a campaign, usually with an underwhelming product, to generate a ‘waiting list’ frenzy, as if such things could be conjured with any item from the range plan. The waiting list for desirables such as handbags from Hermès or the queen of the must-have, Anya Hindmarsh, was seen as the only indicator of a properly functioning fashion marketing team and many seniors were chastised for not providing hysterical levels of consumer salivation for their out-of-touch paymasters.
The waiting list approach can become a false-flag as it is not in real time and when production finally arrives the consumer may have changed their mind and moved onto the next fad, having not paid to be on the that list. Overstock is thus created and waste generated, not only in product but also in staff resource, to meet a mirage of demand. A lot of brands tried to manufacture the cachet of the ‘waiting list’ but few actually achieved it.
First and foremost one cannot create hype with a product that does not warrant it or if the intended or true audience does not respond to such an activation. Even in the sneaker world, the drop has failed many a time. ‘The Drop’ audience may not be interested in the collab with an angular New York designer who creates luxe-leisurewear for the terminally rich and monochromatic who loves to high-low their thousand dollar silk track pants with Sex And The City sandals. That designer’s older upmarket US audience may not sit eagerly on Saturday at 09:00 GMT , the usual time in which the sports world anchors for a successful global launch. Those sneakers will sell out in Bergdorfs by 15:00 on a Saturday afternoon but not online in the middle of a Manhattan night. For this designer the collab ‘drop’ was a damp squib and the digital team genuinely wounded by the lack of site hits as they sipped their fifth latte of a stress-filled morning ruefully regretting forfeiting their Saturday morning off.
Whatever your product and go-to-market strategy, using the right method of hype is crucial and requires some reality checks to reduce overspend, strategic partner tantrums and some unwanted share price speculation. If the ambition is to use a hype method then do seek guidance from those that specialise in this space, as the planning and activation across sites, apps, social and PR is a significant and lengthy process requiring cross-team collaboration despite its seeming immediacy.
However, get the drop right and you could potentially accelerate your brand into the consumer stratosphere and create the Holy Grail of retail: the product franchise. So what does the drop offer a brand? Here is an overview.
An impactful alert that maximises the exposure of the launch event in an image-powered society. The drop was built for the Instagram generation but its true power is hidden in the often-underused Twitter channel. Twitter can be business critical for the drop.
Provides a product opportunity that is immediately available for the consumer to easily recall and creates purchase demand that is measurable in real time. Securing a product through a drop generates authority amongst hardcore fans and divides the audience into haves and have-nots, thus creating fear of missing out.
The drop is a method of digital showrooming ahead of a more detailed collection, franchise or brand launch that trains the consumer to stay engaged.
Creates heat around a product as well as publicity/word of mouth/share-generating, forming a virtuous circle from participation, purchase, bragging, sharing and further purchases creating free UGC assets.
The drop generates a perception of brand democracy whereby geography, status and personal connections to attain the product do not play a part in the access to the product. It is an ‘everyman’ leveler opening the brand up to unrealised audiences, especially in territories where the brand has little brand or bricks footprint.
Creates desire amongst the larger ‘me too’ consumer who cannot afford the limited release edition but can buy into foundation and commercial lines of the franchise flowing into department store and big box-retail partners at later dates.
Generates brand bonding between the company/franchise and super-fans that tend to buy at full margin because being first with the product is more important than any price sensitivity.
It is a method of key image control/storytelling focusing on brand rather than commercial demands as the investment is lower and allows for risk taking with emerging creative, testing partner credibility and manufacturing cachet.
It is an opportunity for product testing, franchise building, price tolerance and market testing and prioritising the flow of information without laying all of the brand’s strategy on the table. It also allows for marketing and sales teams to focus on specific audiences and create new audience/wholesale opportunities, especially in developing new international territories for the brand.
It is an opportunity to test and modify the digital ecosystem, as every brand’s is different depending on DTC and wholesale digital partnership models.
It generates significant data insights to make strategic business decisions to deliver the best results, in which markets, among what demographics, etc.
It is a vital source of demand testing for Buying and Merchandising teams in their procurement agreements with supply chain. The low MOQ investment leading to insight will aid decision-making regarding the use of brand resources that are efficiently managed and prediction model tested.
A low MVP investment in digital generates optimisation insights around the strategic pre-launch window of ‘hype’. If the brand becomes known for this strategy this in itself can train a whole full-margin consumer segment, building desire through scarcity, where previously online visitors were more interested in sales and offers. Improving customer segmentation and raising customer lifetime value without raising stock investment levels, retail space or additional team resource is a P&L dream.
With so many positives it is unsurprising many brands have jumped on this promotional strategy model and how many have commercially capitalised or been saved from extinction. Over the past five years this sub-genre of socially-driven marketing has not only revolutionised influencer-marketing strategy but also created new business models and software platforms to meet fundamentally changed consumer behaviour. Just as Black Friday has killed the Christmas full-margin sales curve, the drop has triggered far-reaching commercial consequences.
And one of those consequences is bots. The scale of which many brands will not discuss due to the commercial vulnerability this reveals. A highly-hyped drop will bring an army of bots to a site and bring it down, if not to its knees, thus frustrating true fans and generating the second new business model of the decade, the reselling platform. To give an example the Kanye West collab called Yeezy normally attracts thousands of bots per minute on a drop window in the first five minutes of launch and the adidas brand has invested in a new dot com presentation layer and consumer authentication system to help the site withstand the onslaught impacting its operational foundation. These attacks are not just impacting the sneaker and concert ticket world, they also impact everyday clothing brands such as H&M on their designer collabs and smaller independent retailer sites given access to strategic brand product targeted at key city neighbourhoods as part of placement strategies.
This level of targeting results in re-merchandised product placed on sales platforms with auction facilities such as eBay and Depop. This is an incredibly lucrative and sleek operation as the sellers are not registered businesses and therefore pay no onward trading taxes plus benefiting from a brand’s IP at every single stage and beyond. More legitimate sites such as Stock X and GOAT (acronym for Greatest Of All Time) are the direct descendants of the drop, generating the perception of the collectable and the rare thus driving up price points beyond original RRP to astronomical levels to brand superfans. Unable to replicate the technology fast enough or generate such tribal obsession, mega brand retailers such as Footlocker have purchased significant shares in sites such as GOAT not because of the product sales but because of the data, analytics and insights it generates from this super consumer. As well as adopting these outliers into their brand operations portfolio they have also embraced some of their functionality with the emergence of the drop calendar on their home sites and apps, some with beautifully executed countdown campaigns and like buttons, to further pre-ascertain interest levels weeks before the drop itself. This immersive digital ecosystem planning, based in real time insights, is driving growth and keeping consumers engaged, poised and ready for every push notification.
The drop is not only in the sports fashion world but has been a tried and tested strategy of brands such as Zara, with drops being realised with two-week windows of availability and short product runs on key ‘trend’ lines. However, the volume of ‘basics’ distress sale stock in Zara stores this last season demonstrates a fundamental problem of over-productions across the fast fashion industry. Recalibration by Zara is vital to avoid the H&M $4billion headache and we would be right to anticipate a third wave of retail outlet strategies from fast fashion brands in tertiary towns and cities to unburden stock and to avoid falling foul of sustainability watchdogs for unsold inventory destruction practices.
The drop and hype strategies can play a pivotal role in the sustainability conversation and those brands only producing for sell-out or demand may be the new frontrunners in the retail world. The tyranny of the mega-factory MOQ and unsavory industrial practices must be addressed. The development of improved ecommerce functionality and a focused digital strategy, properly wedded to the right supply chain partners, could drive not only waste reduction but also social justice through labour sustainability opportunities for smaller factories that are as agile as the brands, artisan makers and craft co-operatives as well as the restitution of disappearing skills for future generations.
The future view of the ‘digital redeemer’ business model can seem a daunting David and Goliath scenario for digital investment by SME’s not able to drawn upon shareholder investment or a large digital transformation team.
Brands such as Levi’s are commercially committing to new channels (and proof of concepts previously generated within the IFAB community) that have scalability and are beginning to successfully mine unmet opportunity in fashion retail. The fact that Levi’s share price slump due to wholesale performance, along with other major US brands, goes to suggest over-production and overstocking is subject to a momentous consumer shift. This is why Levi’s strategic business plan is chasing the new digital business model of made-to-order and collaborations featuring ‘the drop’ mechanics, such as with Wardrobe NYC. Making to demand using the drop model, in tandem with the bespoke trend, has driven the democratic dividend: ‘everyman’ attainability. IFAB alums Meyd.it and forthcoming relaunch of Method of Denim for Melbourne Fashion Week, who have been quietly updating their UI/UX with the latest technology, are just a few of the companies we are seeing receiving recognition and traction as the originators of the digital redeemer trend.
The generation weaned on the drop model, Etsy and Depop is coming of age and they are beginning to demand unique objects of desire to purchase, resell and upcycle with coolness and added conscience. IFAB is the home of sustainability through the lens of digital change in fashion tech and long may that continue.