SMITH BRAIN TRUST – When a hot designer wants a blast of interest in a new product line, there's a single strategy that has recently risen to the top: The drop.
It's the sudden availability of a buzz-worthy new item, online or in a limited location, and in very limited quantities. If you want to get it, you gotta move quickly. The drop is a competitive shopping sport. And that's precisely the point.
The consumer rivalry is good for of-the-moment and burgeoning designers, whose goods get snapped up quickly. Shoppers get a sense of victory from the buy, and that makes them more likely to boast about their purchase – or hoist their trophy – on Twitter, Facebook, Instagram or Snapchat. Those social media posts, studded with excessive exclamation points and uppercase letters, reach a wider audience, one that's often highly receptive.
"The type of customer who responds to drops are those who desire to be an influencer among their circle of friends, particularly on social media," says Amna Kirmani, marketing professor at the University of Maryland's Robert H. Smith School of Business. "It gives them some credibility."
The drop appeals to consumers who are in-the-know about fashion and other trends, who are able to buy on impulse and who are maybe a little competitive. And it can be a powerful marketing tool.
The strategy worked for Alexander Wang, who released his Adidas collaboration in three separate drops, and for Kendall and Kylie Jenner, who released part of their Kendall + Kylie line in drops.
For the drop, as with flash sales, pop-up shops and designer collaborations, like the high-low (high fashion, low price retailer) ones made popular at H&M or Target, the allure stems in large part from the principle of scarcity. In other words, it's FOMO, or fear of missing out, that helps the merchandise sell briskly.
Research shows that scarcity increases the desirability of the item as well as the status that's associated with obtaining it. It gilds the brand, adding attractiveness to its future products.
These heavily hyped drops are best aimed at younger consumers, with their tendency to want to forge their own trends, their own fashions, rebelling against the established fashions of the day.
There's also a practical consideration that makes 20-somethings a sweeter target for brands that "drop," Kirmani says. "They have time," she says, "whereas the over-30 crowd tends to focus more on convenience."
Of course, there's another type of customer who's drawn to the drop, Kirmani adds: the ones who hope to resell the goods at a much higher price. And with the hype these sales often command, it's often easy to command a premium price on "drop" merchandise. And that helps maintain the hype, another plus for the brand.
GET SMITH BRAIN TRUST DELIVERED
TO YOUR INBOX EVERY WEEK
- Amna Kirmani
Media Relations Manager
About the University of Maryland's Robert H. Smith School of Business
The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and part-time MBA, executive MBA, online MBA, specialty master's, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.