Metro BoominSupreme Brooklyn store opening, After Party, New York, USA - 04 Oct 2017

Fashion has taken the drop — and run with it.

Givenchy, Barneys New York, Moncler, Balenciaga, Fendi — and soon Burberry — are all tearing a page from the streetwear handbook, offering limited-edition collections that drop suddenly and are engineered to sell out in a jiffy.

But as an array of brands and retailers adopt the drop and adapt it to their own needs, it is evolving as a distribution method. Brands’ marketing wizards are to some extent commodifying an experience that, until recently, was more a scene for fans and resellers than the well-to-do.

So far, high-end brands aren’t giving over their businesses to drops. They’re generating small collections of key items and pushing them out to the faithful, and successfully generating buzz and interest. The message to consumers is simple: Buy now or miss out.

The drop’s rise in prominence is a reminder to the discount-heavy fashion world that shoppers can and will pay full price with the right incentive.

The drop is also a sign of the digital times — when everything is speeding by at light speed.

“It’s indicative of the same forces behind flash sales — the leveraging of time as the new luxury value proposition,” said futurist Erica Orange, executive vice president and chief operating officer at The Future Hunters.

“Aside from generating brand buzz, it’s all about speed,” Orange said. “Our term for this is ‘templosion’ — the implosion of time. Whether related to retail, financial services, manufacturing, supply chain, anything, it’s all about creating new value from time. Big things/events/cycles are happening in shorter and shorter periods of time, so that the way in which we experience time becomes truncated.”

When drops are done right — or what seems to be right — there is practically no time between product introduction and when it’s gone forever.

“Templosion is also making us feel more schizophrenic — not in a clinical sense, but in a general sense,” Orange said. “We are bombarded with constant choice, so this movement toward drops plays on our neural wiring. Our brains are literally being primed — and even manipulated — based on the notion of time. We get an adrenaline rush when we think a product is running out, or won’t be available after a certain period of time.”

And the roller coaster of the drop — for consumers and brands — doesn’t seem to be stopping anytime soon.

Here, a closer look at how the drop developed, where it is going and what it is changing along the way.

A Bathing Ape store in Paris

A Bathing Ape store in Paris.  Courtesy / Paul Blind

Street Starts

The drop originated in the Nineties among the vertical Japanese streetwear brands — including A Bathing Ape, Neighborhood and Goodenough — and was then appropriated by Supreme in the U.S.

Supreme’s formula is to create a seasonal collection, produce less than the demand and release pieces from that line each week. It’s been successful and sounds simple, which is part of the appeal.

But Chris Gibbs, the owner of men’s wear retailer Union, said the drop is out of step with how legacy retailers and fashion brands have operated.

“Supreme is the outlier,” Gibbs said. “It doesn’t wholesale and its business model was based around this distribution cadence. The foundation of American retail is the wholesale model and the more wholesale-centric a brand is, the less a drop and the seasonal trickling out of releases is going to work for them.”

Gibbs also said the product in drops has to be special, have limited distribution and quantities.

“The bigger the brand and the larger the collection, the less it’s going to work,” he said.

Despite that, many see the high-energy capsule collections as the future of retail — and bigger brands are using them more and more.

Nike embraced drops with its Jordan sneakers and it has since been adopted by Adidas, Reebok, Converse and other footwear brands that weren’t a part of the sneaker release conversation until a few years ago.

“It’s a much more direct approach,” said Santino LoConte, who sells though drops at his New York men’s store Reign. “I think a lot of the collections from fashion houses are too large and overdone. I don’t think the consumers are clear on what’s available to them. With drops, the merchandise is more focused and it helps the consumer with purchasing decisions. The traditional delivery schedule is antiquated. No one wants to buy a winter coat right now, but we are already starting to get them in the store. It’s all about buy-now-wear-now.”

Just who’s buying in drops is changing, though.

Resellers were always been a part of ecosystem, but they have become a major component. Where the lines for key drops used to be filled with younger consumers intent on collecting or wearing the product, they are now dominated by resellers.


Inside thedropLA@barneys.  Zack Whitford/BFA/REX/Shutterstock

Adopted by Luxury

The drop might have started in streetwear, but it capitalizes on two of the key building blocks of luxury — scarcity and buzz.

And with luxury making a hard turn toward street anyway, it was only a matter of time before the distribution method connected with the higher-end of the market.

Bernie Gross, creative director of Lower East Side retailer Extra Butter, said the release-driven model earlier is a natural fit for high-end brands.

“Releasing capsules is probably more important and more useful for high luxury brands than streetwear,” Gross said. “When it comes to Louis Vuitton and Gucci, they have brand loyalty and hype. There is a very larger than life, aspirational feel to them. They should be hyping up product around a release date and creating an in-store moment. It only adds to brand cache.”

The approach has worked for Barneys New York, which staged a drop event last year with appearances by Virgil Abloh of Off-White — and now Louis Vuitton — and Jerry Lorenzo of Fear of God as well as capsule collections or single products from 30 brands.

The company said traffic doubled for the weekend, with 12,000 people visiting the Madison Avenue location — half of them new to the store. (That was enough to prompt a second outing of the event, at the company’s Beverly Hills store.)

And in February, Moncler declared, “The future starts now,” and described “a vision beyond the seasons establishing a daily dialogue with consumers.”

The Moncler Genius project includes a series collaborations — from Fragment Hiroshi Fujiwara to Palm Angels — to be released through drops, which started in June.

Luciano Santel, executive director of Moncler, told investors that the program was focused on building buzz more so than driving sales of the collaborations.

“The amount of business we plan to develop under the Genius project is not particularly significant as compared to the rest of our business,” Santel said. “But…strategically, from the brand, from the communication point of view, from the design, from the product, it is an extremely important project.”

And the rest of luxury is watching.

“Moncler is sort of setting the tone for this,” said Erwan Rambourg, a luxury analyst at HSBC. “It’s a way forward because that’s a way to surprise and that’s a way to continue to find excuses to have someone come to your store more often.”

Rambourg said limited-edition offerings are smart because they “pretty much ensure that whatever you put forward will be out of stock, it’s there to create buzz, it’s there to re-create the illusion of scarcity. There is no scarcity in luxury.”

At Burberry, which is looking to take a much more luxe approach, new creative director Riccardo Tisci is planning on release a limited-edition capsule collection via drops that begin next month.

“Coming out with a few surprises and a few excuses for the media and influencers to pick up on the fact that Burberry’s changed is a good thing,” Rambourg said. “I don’t know if a drop in isolation will help Burberry sell other products, but it will certainly help put Burberry back in the conversation.”

And the conversation is increasingly covering both luxury and streetwear.

Chris Kyvetos, founder and creative director of Sneakerboy, the Australian chain of concept showrooms, recently told WWD: “I treat Balenciaga the same way I treat Nike, which means that we’re not just going to randomly show up, have a look at your collection, buy it, stick it in the store and hope it sells. Instead, they’re going to send me some arranged plans and ideas, and things that they’re thinking about.…The way we’re going to release a Balenciaga jacket is the way we’re going to release a Jordan shoe.”

Backstage at Moncler Genius Collection RTW Fall 2018

Backstage at Moncler Genius Collection fall 2018.  Kuba Dabrowski/WWD

Marketing Savvy

Small runs of buzzy collaborations that leave die-hard fans clamoring for more — or headed to the secondary market to buy at a mark-up — amount to something like performance art advertising.

Each Instagram post from the queue outside the store, each digital tale about just how a piece of a coveted collection was scored, spreads the gospel of the brand to the faithful.

So even those who can’t or won’t camp out overnight — or perchance don’t want a brick sporting the Supreme logo — get a sense of brand momentum and excitement digitally downloaded to their feeds.

“It’s a perfect fit with social media — so the brands that are heavily using influencer marketing and social media to drive their marketing,” said Glenn McMahon, operating partner at Traub, of the drop. “In order to continually engage or reengage with their customers, they have to continually be offering them ways to come in.”

And every little connection counts.

“That’s the new way of marketing, very grassroots,” said Wayne Kulkin, founder of luxe sneaker company StreetTrend and former chief executive officer of Stuart Weitzman. “There are ways to grow the business through just connection, going shoe by shoe or jean by jean or handbag by handbag. There’s definitely this new paradigm of consumer behavior…there needs to be this connection.”

StreetTrend will launch its PS821 Italian-made sneaker line next month, making only 150 to 500 pairs per stockkeeping unit with new looks coming out every six weeks. (Kulkin said 8.21 percent of the brand’s proceeds would go toward a “hot topic charity,” with the cause changing with each new drop. “We’re taking it to the next level, so not only are there fast drops and limited production, but a fast-to-market change with charity,” he said.)

Saturation Risk

Despite the growing popularity of drops, relying on a frenzied cycle smaller releases throughout the season has its drawbacks. And the worry is that the more brands flood the market with drops, the more customers won’t care.

“If every brand starts adopting this model casually and throwing out too much product, there is going to be zero engagement,” said Extra Butter’s Gross. “Consumers might go back to wanting to look for something that’s not seen anywhere and go anti-brand or anti-hype.”

Union is known for carrying fashion and sneaker brands that use the drop distribution system, but Gibbs said he’s made an effort to not be so drop-centric for the sake of his business.

“I’m personally very concerned about getting the customer so used to the drop that the regular stuff isn’t exciting to them. For the long term, that’s not good for my business,” Gibbs said.

Sneaker retailers are dealing with a similar issue. Treis Hill of streetwear brand Alife and sneaker boutique Alife Rivington Club said the focus on special product has made it harder for them to get customers interested in core sneakers.

“We need to figure out how to sell basics, it’s something we are thinking about daily,” Hill said. “It’s a gift and a curse. You can have a $150,000 day, which is amazing, but how do you keep consistent business and gradual increases as opposed to weekly spikes?”

At Extra Butter, Gross believes sneaker brands invest too much money in marketing the limited product they already know is going to sell out. According to Gross, because brands rely on volume, they need to focus on giving in-line product more visibility.

“What they are doing is counterproductive to where they are allocating their resources,” Gross said. “But with that said, it goes back to it being each retailer’s responsibility to build their own hype.”

Resellers also create a challenge for retailers. Hill admitted they are good for the market, but because of the growing demand and resale value around product, they prevents a certain customer from shopping at the store.

Hill would ideally like to sell his sneakers to shoppers who are going to wear them as opposed to forcing customers to go to a secondary marketplace.

“With all the crowds, it’s not safe anymore,” Hill said. “The guy from Wall Street or the ad executive from Chelsea isn’t going to come to our store and purchase shoes anymore and I want to service that guy.”

Future Drop

As more brands take to small, fast-moving collections, the drop is changing.

Andrew Raisman, founder of Copdate, which provides retailers with the tools to manage high-impact drops, said retailers and brands have to create more immersive experiences for customers when releasing product.

Many sneaker brands have taken to using raffles and apps to allocate limited-edition sneakers, but Raisman said the releases will start to get more sophisticated.

“When we first started, it was about how to make sneaker releases easier,” Raisman said. “Now it’s about creating memorable experiences.”

Copdate is working on providing VIP events, micro pop-up stores and interactive city tours tied to a release.

To address the reseller situation, Hill said Alife Rivington Club is working on a membership program that lets applicants pay a certain amount to get access to sneakers.

And James Whitner, owner of The Whitaker Group, which operates sneaker and streetwear retailers, said in order to prevent crowds and do good, he’s considering tying releases to community outreach initiatives. If customers participate, they can purchase the sneakers.

Call it Drop 2.0 — and it’s coming fast.