Photo: RetailWire
Will ‘drops’ yield more fashion buzz or busts?
On Sept. 4, Macy’s held its first “watch drop” as part of a plan to offer one to four exclusive, limited-edition watches every Wednesday over the next four weeks.
Macy’s will sell the watches online and in stores to celebrate a special moment in each watch brand’s history, such as an anniversary.
“Watches are a great gift. They’re even better as collectibles,” Michelle Wang-Davidson, Macy’s group VP and divisional merchandise manager of watches and fashion jewelry, told Women’s Wear Daily.
The watch drop takes a page from the “drop culture” trend pioneered in the streetwear category in the U.S. by Supreme and Nike. Hyped on social media, the limited-edition releases often sell out immediately and appear later on eBay at much higher prices.
A number of fashion labels, including Givenchy, Moncler, Balenciaga, Fendi and Burberry, have also recently jumped on the drop bandwagon and have seen crowds snaking around their stores as a result. The drops build buzz with Instagram-worth moments, bring a steadier stream of newness and help brands better connect with young consumers. Barneys New York held a well-attended drop event at its Manhattan flagship last fall.
https://twitter.com/supremedrops/status/1034204566646976512
A Women’s Wear Daily article on the trend, however, points to a number of potential risks including over-saturation as more limited-edition capsules flood the marketplace. Some retailers talking to WWD were also frustrated that the marketing focus is increasingly placed on drops rather than in-line product. Drops also tend to attract re-sellers to stores rather than loyal customers.
An article from the Business of Fashion further noted that shifting to delivering product in weekly or monthly drops requires a more agile supply chain. Developing fresh trends also often takes time, and that works against the quick sell-out nature of drops. Some market observers also question the degree to which luxury fans will continue to track and attend drop events.
Bobby Hundreds, co-founder of Californian streetwear label The Hundreds, told Business of Fashion, “Just because it works for streetwear, doesn’t mean it will work for everybody else.”
Discussion Questions
DISCUSSION QUESTIONS: Do you see more upside than downside to the increasing number of drops and limited-edition capsules in the luxury space, and why?
Poll
BrainTrust
Liz Crawford
VP Planning, TPN Retail
Lauren Goldberg
Principal, LSG Marketing Solutions
Like flash sales of the Gilt/RueLaLa/etc. era, I think product drops, capsules, and even “x” collaborations will get over-saturated. I’ve been paying attention to Choosy (getchoosy.com), a brand that takes in-the-moment celebrity fashion, makes limited edition knockoffs, drops new ones every week and moves on as soon as they sell out. It’s a cool concept — but hard to pay attention to for a long period of time. A brand exists to promise reliability. But if your brand promise is exactly the opposite — the only reliable thing about us is that you’ll never be able to buy it again — it can get exhausting.
If you don’t believe me, try watching TopHatter for five minutes (you’ll have to sign up to get the full effect). That’s like all of this capsule, time-limited, limited-edition stuff, concentrated — which is where it feels like we’re heading, and a bit like Blipverts, if you’ll excuse the Max Headroom reference.
“It’s a real mind-blower!”
Well-managed “drops” are probably one of the best mechanisms for the ongoing freshening of a store’s inventory and storytelling. But the process can easily be overdone and create chaos on the floor. It will require meticulous planning. It will require an understanding that only X percent of the floor can be converted on a weekly basis. How does the next drop relate to the last drop? Does one flow naturally from the other and freshen it, or does it obsolete the prior drop and clash on the floor? This process can be great for seasonal conversion, gradually introducing a broader range of color and heavier (or lighter) weights. Color management will be key. If a store has the space to devote to an ongoing flow of new and unrelated product, great. But I think most mall retailers will have to approach this with a more integrated thought process.
Interesting concept that could draw some attention however it could also get old in a hurry. This reminds me of an Urban Shoe brand called Villa that used to do really cool things like hold back a certain number of a newly released shoe, because they always sold out. Then they would bring them out later and so something like a city wide scavenger hunt. Their customers would even take road trips to be at these scavenger hunts. This type of approach has a lot more chance to build loyalty as well as fun and loyalty lasts a lot longer. For my 2 cents.
The reason why drops and capsules work now is that they are novel and unique. Once they become mainstream, the appeal of getting something new and cutting edge (and Instagram-worthy) will wear off. It might work for luxury brands, but for a brand for the general public (ie., Macy’s), I wouldn’t put a lot of resources into this. They will get a nice initial PR boost, but I fear they would oversaturate the market with this.
Drops are exciting. They create a sense of urgency by pulling two levers: limited time and limited quantity. Sure, we’ve seen this already — flash sales, mobile sales “alerts,” capsules, etc. But I don’t think this will ever get old. Quite the opposite. Digital native shoppers who have short attention spans, along with FOMO, supply the perfect audience.
Finally, the sheer fact that this phenomenon recurs indicates that it will always have legs. The name may change. The mechanism may morph. But whether you call it a drop, a flash sale, or something else, it is a an important and perennial device for retailers.
Upside, for sure. Two pros of utilizing “drops”:
Drops successfully create a sense of exclusivity, intrigue and immediacy for consumers. That’s why they work. The risk is that once everything becomes a drop or limited edition then nothing is really limited and everyone has it. The exclusivity is lost, the intrigue disappears and consumers become trained to expect the next drop rather than “buy now.” At some point, “drops” become merely “sales” and then they compete on price rather than exclusivity. For now, we haven’t reached the saturation point so Macy’s may be wise to take part in this trend. Let’s hope they don’t overdo it!
This is “sale” in a new disguise, limited time and limited quantity (scarcity) will always drive sets of buyers in the market. Liz outlined it nicely. Making it specific to the product anniversaries and calling it something new (“drops”) allows it to function well in the luxury markets.
Drops play on storytelling, brand loyalty and the excitement of short term buying windows. The question here isn’t really whether drops will work – because we know they do. Instead, the question is whether watches attract the same fanatic brand loyalty that streetwear does?
There’s also a difference between a brand releasing their own limited edition product and a department store like Macys trying to hype multiple products. This might be the domain of brands alone. If any of Macy’s hyped products end up at off-price chains, it will mean the end to department store product drops.
The drop culture is another example of a new trend that appeals to consumers fascination with the latest new product — and especially if it has very limited availability. Similar to flash sales and pop-up stores, drop products create a sense of excitement and urgency.
The drop culture will only be hot for so long, as brands can only come out with so many variations of a product before they run out of creative ideas or consumers get bored with the concept. Retailers that jump on this bandwagon better get on soon, before some other hot trend replaces this one….
Drops work when you have a strong brand, a leadership position, an addressable — and engaged — customer base, and of course, a hot product. Nike has built an entire line of business around this concept, but as more mass market and “me too” brands follow, the questions posed in WWD are more than legit. Unless you can do real volume, the buzz is just that, and the volume is where it’s at.