Drop It
How luxury brands are leveraging scarcity to increase demand
“Drop Culture” has implemented a sales strategy that is popping up more and more in luxury markets: the idea of a limited quantity, limited time product launch. The impetus behind this is simple, yet powerful: Millennials and Gen-Z like exclusivity, customization, and a constant stream of newness. Paired with social media’s flow of real-time marketing, it has led to the successes of pop-ups, capsule collections, and buzz around the word “drop” in retail and fashion.
While the first significant push toward a faster fashion cycle came from Supreme, Barney’s and Moncler followed closely behind with significant sales “post-drop”. E-commerce makeup brand Kylie Cosmetics exclusively operates through controlled releases that often sell out in under a minute. This scarcity repeatedly leaves customers itching for her to post about a restock. California-based streetwear brand The Hundreds reported increased sales by 29 times on “drop” days alone. In September, Moschino debuted a SS2019 line at Milan Fashion Week that spoke to the struggles designers face to keep up with the speed of the current fashion cycle. Further push back from fashion houses may hold opportunity for “drops” in larger retail markets as well.
We can expect Gen-Z and Millennial consumption to contribute 45% of luxury spending by 2025. It is already evident in 2018 that the markets are adapting to these consumers’ fast-paced lifestyles, and we can only expect to see more lines wrapping our storefronts as anticipation surrounding drop culture becomes one of retail’s greatest marketing tools.
Sources: RetailWire (October 24, 2017) | The New York Times (December 14, 2016) | BoF (August 9, 2018) | Image: Laura Pittaccio