What are the benefits of product drops?
Product drops are a powerful marketing and sales tool.
One fashion industry survey found 66% of respondents consider the product drop model important or very important to their business. For footwear brands, that number was 78%.
Product drops help brands generate hype, put customers into nurture flows, boost brand affinity and reputation, and shift from discount-based scarcity into product-based scarcity.
1. Delivering massive drop marketing opportunities
The product drop model may be a sales delivery method, but like flash sales, its major benefits lie in its marketing value.
Product drops let retail marketers act like musicians and movie studios. The product drop model enables marketers to regularly tease new products to get customers excited, engage in unexpected brand collaborations to tap into new audiences, and drip feed customers and journalists content for speculation and conversation.
Product drops are about the new and novel. About tapping into anticipation and excitement. About creating a brand moment.
James Jebbia, the founder of the most famous product drop brand of all time (Supreme), told Vogue, “My thing has always been that the clothing we make is kind of like music.”
Byron Hawes, author of the book Drop, mirrors this idea of drops as entertainment, saying, "We would go up to Palace, or wherever Supreme would drop, and kids would literally be there all night. It’s like a newStar Wars movie or something.”
No one talks about buying the same grey hoodie GAP has sold for decades. But when GAP drops their limited collaboration with Kanye West’s Yeezy, headlines are published, fans line up, and the demand is so high it crashes their website.
RELATED: Brands that consistently leverage the product drop marketing strategy create a space in which communities form around their brand or product category. This is because the entertainment value of product drops consistently gives customers content to discuss, share, and engage with.
We see this most prominently in the sneaker world, where events like Sneaker Con attract thousands of guests and content like Complex’s Sneaker Shopping videos get celebrity guests and millions of views.
Sneaker culture isn’t just buying and selling shoes—it’s entertainment. It has the exciting elements of competition (Adidas vs. Nike), brand and celebrity collaborations, and an unending stream of drops that allow brands to build awareness, boost affinity, and foster community.
2. Driving sales & hype with drops instead of discounts
The second key benefit of the product drop model is it enables you to leverage the power of scarcity marketing without discounting products.
Scarcity marketing is often associated with flash sales, drawing customers in with language like “get this 40% discount while it lasts”. But when using limited inventory scarcity marketing, you can sell items at full retail price and still have customers feel they’re nabbing a great deal.
Product drops transform your products from something you wish customers would buy into something your customers wish they could buy.
You can see the benefits of scarcity of inventory in the examples we’ve outlined above, but it also applies to limited inventory restocks.
Whether intentionally or not, products like Sony’s PS5s and AMD’s graphics cards were incredibly difficult to purchase when they were released. Both companies restocked when they had supply, making these restocks regular events that have similar scarcity marketing and anticipation effects to product drops.
To be clear, the release of the PS5 was a product launch, not a product drop. But Sony’s struggle to keep PS5s in stock and their model of regular limited supply restocks means they reap many of the same benefits as brands that engage in product drops.
Two years after the release of the PS5, there were still dozens of headlines posted weekly about restocks and availability. A Twitter account dedicated to PS5 stock alerts has 1.1 million followers. These restocks see thousands queue invirtual waiting rooms.
Customers love getting a good deal. And the scarcity of PS5s meant customers who got their hands on one felt like they’re getting a good deal despite paying the full retail price.
Product drops let customers feel like they’ve won a prize or gotten away with something they shouldn’t have, all while still paying the full retail price. That’s why 76% of customerswho take part in product drops are very or extremely satisfied.
Shifting from discounts to drops helps brands achieve satisfied and engaged customers without sacrificing their margins. It replaces customers’ shopping guilt with a feeling of shopping glee.
3. Cultivating brand relationships with loyalty programs
The product drop trend is closely related to another fast-growing ecommerce trend: loyalty programs.
Ecommerce loyalty programs are a way of formalizing and strengthening relationships between brands and consumers. They aim to deepen brand trust, expand brand touchpoints, enable personalization, and nurture loyalty.
To achieve these benefits, loyalty programs typically offer rewards, discounts, and other exclusive benefits in exchange for repeat purchases, personal information, and/or recurring payments. Examples include Walmart+, Amazon Prime, eBay Plus, adidas adiClub, Starbucks Rewards.
RELATED: Ecommerce Loyalty Programs: How To Keep Customers Coming Back for MoreOne survey found 70% of consumers spend more with brands when they’re part of a loyalty, member, or subscription program.
But when brands want to form relationships through loyalty programs, they face a key question: how can we deliver enough value to customers to make a relationship worthwhile?
Tactics like giving newsletter subscribers 10% off their first order are a start, but this does little to ensure continued engagement with the brand.
The product drop model is highly conducive to capturing loyalty program members because it creates more engagement opportunities and heightens competition and demand for products.
When there’s competition for goods, customers will do anything they can to get a competitive advantage. And brands are leveraging this desire for an advantage to nurture loyalty and form brand relationships. Examples of this include:
- Nike and Adidas drop products customers can only purchase on their mobile app
- Walmart and Best Buy offer early access to drops and sales for paid subscribers
- Aimé Leon Dore and SKIMS run invite-only product drops and private sales for members
- Sony and AMD have a sign-up form for restocks to gather email addresses
- SKIMS delivers first notifications of restocks to newsletter subscribers
- Louis Vuitton and other luxury brands reserve products for high-value customers
Exclusivity is a powerful thing. When used right, the exclusivity of product drops can be leveraged to incentivize stronger connections and commitments between customers and your brand.
Forming these relationships through loyalty programs makes customers more likely to spend more with your brand and gives you valuable communication channels to nurture their loyalty.
RELATED: 79 Staggering Statistics That Show the Power of Loyalty Programs
4. Creating memorable customer experiences
Alongside the scarcity marketing value of product drops, anticipation psychology drives much of the product drop hype cycle and success of brands with this model.
With product drops, you take your brand beyond a traditional store that customers can walk into and purchase products at their convenience. Instead, customers must work and wait for your products. Your product announcements become news headlines and fodder for social media chatter. People get excited about your events.
While brands like Apple do this only once or twice a year, brands that are truly successful with a drop model have this cycle happening constantly—either with product drops or limited-inventory restocks.
By drawing the purchase experience out over a longer period, you draw out customers’ anticipation. This helps them build more excitement around your brand, but it also means that when they finally get their hands on products, they’ll be more likely to enjoy them, more likely to share them on social media, and more likely to remember their purchase.
5. Boosting sales of core product range
One of the key perks of the product drop model is its benefits extend far beyond the single product drop or brand collaboration you’re engaging in. For many brands, product drops boost sales of core products.
By building hype around your brand, creating headlines about it, and tapping into scarcity marketing and anticipation psychology, you elevate overall brand awareness and affinity, and these benefits flow back to your core product range.
The recent success of New Balance provides the perfect example of this.
In 2018, New Balance activated the brand’s first dedicated collaborative drop strategy. This strategy took the brand from dad fashion to high fashion in just a few years.
Following strategic collaborations with underground “it” brands like Aimé Leon Dore (ALD) and JJJJound, interest in old New Balance silhouettes like the 550 and 990 boomed.
The collaborative drops with these brands sold out quickly. But shortly after these sales, something else happened. The original shoes the collaborations were based on sold out too.
The collaborative sneakers were sold out everywhere. But the originals, which looked very similar, were still available—at least for a moment.
Fast forward to 2023, and these core models were some of one of the hottest sneakers of the year. Sold out nearly everywhere, restocks of the 550 silhouette saw virtual queues of over 70,000, according to Glamour Magazine.
Google Trends shows interest in New Balance more than doubled year over year in the first half of 2022. The brand is having its moment.
Something similar happened to GAP inc. after they announced their (ill-fated) 10-year partnership with Kanye West. The once waning brand inserted itself into the zeitgeist with by partnering with one of the pioneers of product drops (West), and the brand’s share price jumped 20% within a day.
New Balance and GAP’s stories show brand collaboration product drops are rarely just about the collaboration—they’re about the brands. Likewise, they’re rarely about the sales of the limited-edition products—they’re about sales of core products.
Product drop examples & case study
We’ve already covered many product drop examples in this article, from sneaker to streetwear to high fashion to fast fashion.
In this section, we’ll cover some product drop examples beyond the world of fashion, but we’ll also take a deep dive into how a contemporary brand with the product drop model at its core reinvented a product category and reached a $3.2 billion valuation in under 4 years.RELATED:
Product drop case study: SKIMS
Kim Kardashian’s shapewear brand SKIMS’ initial collection sold out 10 minutes after the brand launched. Less than a month later, SKIMS launched a new collection with a presale waitlist. That collection sold out too.
These first couple months set the tone for how SKIMS would operate for years to come.
SKIMS used product drops, brand collaborations, and (of course) influencers from the start. Almost 4 years later, Kardashian’s SKIMS still sells products almost entirely through a product drop business model.
SKIMS sells direct-to-consumer (DTC) and through a very limited number of retailers. New products and restocks are dropped weekly in batches of between 20,000 and 200,000, designed to sell out fast.
This model means thousands of customers miss out on the first sale.
Headlines are published about an instant sell out.
Interest builds.
Those who manage to get the products feel like they’re part of an exclusive club, and post unboxing videos, reviews, and photos and videos with the clothes on.
People who missed out and are waiting for a restock consume this content and their desire for the goods grows.
By the time the next release or restock drops, hype has built, the new collection sells out, and the cycle continues.
One of SKIMS’ dresses, for example, has over 110 million views on TikTok and a waitlist of 46,000.
To ramp up this hype and scarcity cycle, SKIMS frequently engages in influencer marketing and high-profile limited-release collaborations, including with the fashion house Fendi, crystal brand Swarovski, and the NBA and U.S. Olympic teams.
SKIMS products go on sale only twice a year, in a time-limited sale. And when their products do go on sale, it’s typically private sales giving newsletter subscribers invite-only or first access.
RELATED: Granted, SKIMS has the advantage of being attached to a major celebrity. But celebrity brands don’t always succeed, and SKIMS is a contemporary brand that found success through a contemporary retail model.
The brand taps into many of the product strategies we’ll cover in the next section of this article. SKIMS succeeds by:
- Keeping customers interested and engaged with scarcity marketing
- Maintaining a fresh product offering with regular new collections and collaborations
- Curating their brand with DTC sales and a very limited number of additional retailers
- Building hype with both organic and paid influencer marketing
- Upholding their brand value by rarely discounting products
- Nurturing loyalty and capturing loyal members with private sales
- Capturing newsletter subscribers and followers with restock notifications and product waitlists
Product drop examples across industries
It's safe to say the product drop trend has grown far beyond its roots in the worlds of sneakers and streetwear. Let’s look at how other brands, from software companies to fast-food chains to furniture companies, have tapped into product drops to boost their brand:
- McDonald’s has started releasing limited-edition collaborative meals with rappers and celebrities, such as the Travis Scott meal, which led to a shortage of ingredients. (This isn’t McDonald’s first product drop foray, as people familiar with the sporadically available McRib sandwich will know).
- DoorDash recently announced access to exclusive product drops as part of their food delivery subscription service.
- Prada now does monthly product drops, releasing one new product each month that’s only available for a 24-hour window.
- Tech startup Stir has started software product drops, releasing simple but useful one-off pieces of software, like OnlyTweets, which lets Twitter users put their account behind a paywall.
- MSCHF is a brand that does nothing but random limited-supply drops, dropping everything from new fonts to alcoholic drinks to Tiffany & Co. collaborations.
- The value of NFTs is predicated on scarcity and hype, and product drops are just about the only way they’re sold.
- Video games like Fortnite regularly drop limited-time in-game experiences, such as the immersive Travis Scott concert that attracted over 12.3 million concurrent players.
- Even YouTube and X (formerly Twitter) have incorporated product drop functionality into their service, letting creators drop products during livestreams (YouTube) and customers sign up for drop reminders within the X app.
- IKEA made its foray into drop culture with a much hyped collaboration with architect, designer, and influencer Virgil Abloh, releasing limited-edition furniture items fans raced to buy.
Lines outside IKEA in the U.K. for the IKEA x Virgil Abloh collaboration
This list of product drop examples could go on forever. But by now you should get the point—drops aren’t just for sneakers and mega-celebrities, they’re a new retail conversion play that’s seeing success for brands of all shapes and sizes.
Oops, you dropped something. Here you go: it’s your free interactive product drop checklist
Get my checklist
