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How to Use Drops in the Instagram Age

Product drops have become a way for luxury’s biggest brands and retailers to cultivate exclusivity and excitement across their online and offline channels. Here’s how to get started.
Moncler's Pierpaolo Piccioli , Richard Quinn and Simone Rocha Genius collections | Collage by BoF
By
  • Zoe Suen
BoF PROFESSIONAL

LONDON, United Kingdom — Like it or not, drops have taken fashion by storm.

From its lesser-known roots in the backstreets of Tokyo's Ura-Harajuku district to overnight queues outside Supreme's London outpost, drop culture has become a way for luxury brands to turbocharge the perceived scarcity — and desirability — of their products to a millennial audience.

The likes of Louis Vuitton, Celine, Balenciaga, Fendi, Moncler, Rimowa and Burberry have all dropped limited edition off-season collections and used their social media mouthpieces to fan the flames of hype. Dad sneakers, accessories in exclusive colourways and need-to-know artistic collaborations are just a few of the items that hypebeasts and luxury shoppers are setting their alarms for, lest they miss out.

Balenciaga's newest Track.2 sneaker, which dropped in June | Source: Balenciaga

“Drops create excitement through the perception of exclusivity,” says Flavio Cereda, managing director of equity research for consumer and luxury at Jefferies International. “This can be a fake perception, but it doesn’t matter. Brands are getting into consumer’s heads.”

And soon, doing so may be the norm. “If you’re a brand in 2019 and don’t know how to play that game, you’re in trouble,” he adds.

For some players, the release model pays off, albeit not always immediately. Take Moncler's Genius Project: the Italian brand's monthly high-profile launches that count the likes of Pierpaolo Piccioli, Craig Green and Simone Rocha as collaborators.

"I judge the success of Genius collaborations mainly on their capacity to generate energy around the brand," Moncler Chief Executive Remo Ruffini tells BoF. According to Ruffini, success is "not only measured by sales performances but also by the ability to create buzz…and attract different customers."

Success is not only measured by sales performances but also by the ability to create buzz.

A well-executed drop can have longer-term benefits beyond a single purchase. “The drops probably account for 8-10 percent of [Moncler’s] revenues, but it’s much bigger than that,” Cereda says. “It heightens the profile and visibility of the brand with younger consumers. It inevitably translates, it’s just not necessarily an immediate impact.”

"Our customers find [drops] and the release of limited-edition products and innovative content which is exclusive to social platforms really exciting," says Rod Manley, chief marketing officer at Burberry. This past Wednesday, the brand launched an exclusive beach capsule collection with luxury retailer Mytheresa.

https://www.instagram.com/p/B0A29JOIFKk/

But brands need to approach the drop model with caution, as there’s much more to it than producing smaller quantities of a product and posting an elusive Instagram post. An engaged social media following and reliable distribution channels can be "make or break" factors. Meanwhile, product categories requiring try-ons and deliberation — say denim or jewellery — might be trickier to sell via drops. “If you do [certain kinds of] apparel or leather goods…then it’s an option,” says Cereda.

For those that do suit the drops model, here’s how to get started.

Consider the Bigger Picture

Drops are an opportunity for brands to experiment, be it with design, influencers, retail or distribution strategies. However, fabricating spontaneity and excitement for consumers means planning ahead, and brands can benefit most when releases fit into the brand’s wider calendar and are utilised to inject newness into lulls between fashion week, influencer campaigns and other activations.

For some brands, drops can be positioned before general product releases to generate goodwill with their social media community. Take Burberry, which debuted its B Series 24-hour limited edition monthly drops in September 2018, and brought Riccardo Tisci's new collection to followers across the brand's social channels before they were made available elsewhere six months later.

Burberry's B Series drop from January 2019 | Source: Burberry

“Think about the way conversation happens around a brand offline and online,” says Tribe Dynamics’ McCorquodale. “Having the opportunity to create touch-points in that conversation be it through a drop or new collaboration is really important to maintaining and sustaining the momentum of the brand over time.”

With a long-term approach, drops can also be leveraged as a wider program to enhance a brand’s presence across many touch-points. McCorquodale, for one, reckons that the best results can be achieved when brands commit to the model’s fast-paced nature. “Hype around drops is generally widespread but short-lived, so brands seeking to make the most out of this release model should drop products with some regularity to keep their communities engaged,” she says.

Brands should drop products with some regularity to keep their communities engaged.

Moncler, for example, announced its launch calendar at the beginning of the season with a global campaign. Rather than reducing Genius to drops, Ruffini coins it a “360° editorial plan,” involving press, social media, in-store activations, pop-ups, e-tailers and dedicated events. Only when a brand’s messaging and wider presence are integrated with its releases will consumers be attracted to the products.

“Moncler Genius is mainly a communication project,” says Ruffini. “I think that ‘drops’ are not enough to make the magic happen.”

Expand Your Network

Through drops, brands can collaborate with other creatives and expand their own brand following by tapping into new targeted consumer segments. “When we communicate the Moncler Simone Rocha collection we talk to a completely different audience than the consumers of Moncler Palm Angels,” says Ruffini, who notes that the brand also varies the number of SKUs it produces per collection according to the designer and demand. “This allows us to alternate messages and target audiences while remaining consistent with our core values.”

Moncler's Simone Rocha Genius collection | Source: Courtesy

Moncler relies on ad segmentation based on brand-owned data — such as website visitors — combined with data from Google and third-party platforms to identify and target each collection’s audience. Post-launch data has circled back to inform the brand’s long-term strategy: after Genius’ first year, Ruffini decided that activity was too concentrated and opted for monthly launches over tri-weekly drops, in addition to upping the ante for interactive experiences and in-store events.

Beyond product design, outsourcing content creation to the right influencers can generate exclusivity and scarcity in the eyes of consumers in addition to providing the brand’s own channels with fresh content to share with its followers.

According to Tribe Dynamics, when Moncler celebrated the launch of its Fall/Winter 2019 Genius Collection with a dinner in Milan this February, high-impact posts from 96 content creators such as Larsen Thompson and Jasmine Sanders helped the hashtag #MonclerGenius generate $1.2 million in earned media value (EMC) over the month.

The most impactful posts often come from content curators.

While influencers can play a key role in raising awareness for drops, “the most impactful posts often come from content curators,” says McCorquodale. Take Highsnobiety and Hypebeast, who drove the conversation around Supreme and Nike’s Spring 2019 collaboration. Tribe Dynamics’ data shows that the two content aggregators ranked as Supreme’s top two EMV-drivers in May, contributing $842,500 and $786,100 in EMV respectively to the brand’s $6.3 million total in May.

Offline Really Matters

“For most drops, their actual size is minute,” says Cereda. “Some of them are really really small and brands are able to say they’ve sold out in minutes because it’s 300 pieces.” However, brands shouldn’t underestimate the operational efforts required to pull off a successful drop.

Moncler’s drops are synchronised worldwide, meaning all online and offline channels and selected e-tailers and wholesalers launch the product on the same day. Time difference, customs and import tariffs are just a few of the logistic difficulties that brands have to take into account.

“The execution of Moncler Genius is quite challenging,” Ruffini tells BoF. “Imagine the big organisational, managerial and [logistical] efforts…needed to deliver the right product at the right time [to] the right place.”

Imagine the big organisational, managerial and logistical efforts needed to deliver the right product at the right time to the right place.

Internally, Moncler pivoted its ways of working to accommodate an agile production model. “This meant working in a more cross-functional way…engaging supply experts in new production techniques and craftsmanship,” he adds. Externally, the brand has also tapped into its brick-and-mortar locations to connect with shoppers, and considers customer service and interactivity a big part of the equation. “The client experience through all touch points needs to be relevant and consistent.”

“If you don’t have a good supply chain and reasonable distribution network for retail, it becomes difficult,” says Cereda. “You have to arouse interest from your customer base, but there has to be a reasonable amount of product available at the right time.”

Brands may also choose to use their digital platforms to link their online and bricks-and-mortar presence, as Burberry did last year. "[The brand] timed the 24 hour drops of Ricardo Tisci’s inaugural collection with its offline fashion show and in store activity in a ‘three-pronged’ approach," says Instagram's Head of Brand Development Gord Ray.

The strategy helped "[build] hype with existing customers who visit their stores and are watching their fashion show, but also [reached], via selling exclusively on Instagram, an entirely new younger, affluent audience with a desire for unique and exclusive products."

Exclusivity is Everything

“Product is king,” says Mytheresa’s President Michael Kliger. But in the realm of drops, exclusivity rules.

Exclusive designer capsules have become an integral part of Mytheresa's business model — the retailer dropped a collaboration with Jil Sander on July 10 and launched a range of items from Simone Rocha's Moncler collection exclusively the week prior.

The retailer uses drops as an opportunity to reward its top clients, who can shop the capsules 24 hours before others. “Other than that, it is all about creating awareness through teasers and launching onsite and offsite at the same time to secure digital presence,” says Kliger.

https://www.instagram.com/p/BzvqmzuoTqM/

Three to five days before each launch, Moncler’s social media channels enter their “teasing phase,” aimed at stimulating excitement amongst a targeted audience. “We tend to keep a strong sense of elusiveness up until the big revealing moment, which is why our Moncler Genius presentation in Milan has always been surrounded by so much hype and attention,” says Ruffini.

It helps if the brand has already cultivated a sense of exclusivity around its collections and distribution generally. “We have always developed the network in a selected way, we strictly control product availability in stores and we have a strict no sales policy,” he adds.

As with all marketing, a successful drop comes down to storytelling. To announce the project’s first launch last February, the brand teased silhouettes of its designer partners on the brand’s social media channels. “The aim is always to keep the people curious and surprised about the unexpected,” says Ruffini.

Brevity rules and emotions create engagement.

For some brands, less is more. This January, Balenciaga launched a single item — a pink version of its monogram Logo Ville bag —through one post on its WeChat account with a link to its mini program, without price or mention of how long the product would be available. Within a day, the post had drawn over 22,000 page views on that social network. “Brevity rules and emotions create engagement,” says Mytheresa’s Kliger.

Brands should experiment with different methods. "Another option would be to launch your product drop with an Instagram Live," says Ray. "Most people enable push notifications for Live videos so this can help alert followers in real-time."

It can take some trial and error for brands to figure out what works best for their audience, but drops can provide the perfect platform for experimentation. “The storytelling has to be interesting,” Cereda adds. “There’s got to be a reason for people to keep up, and want to turn their post notifications on. You need that for people to want to buy something now, as opposed to 6 months later.”

Instagram Is Important, but It Isn't the Be-All and End-All

"People already look to Instagram when their favourite brands introduce new products," says Instagram's Ray. "Because of this trend, brands are getting increasingly creative about how they unveil new products on Instagram first."

Instagram users still can't shop drops within the app itself. "There’s a lot of work we still need to do with shopping within Instagram so it’s too early to tell," he tells BoF. However, the app is still critical for brands marketing to their consumers, and building hype for releases.

To make the most use of Instagram's one billion user count, Ray has a few tips. "Use the countdown sticker to drive excitement in the moments before launch," he tells BoF. "Use Instagram’s poll or quiz sticker in Stories to crowdsource ideas for your next product line."

The app can also be a valuable resource for brands to stress test ideas. "Do a Live Q&A with a key spokesperson to open up the doors to your creative process and be open to learning what’s working and what’s not," Ray adds.

And while developing a communication plan to map out static and video content, posting frequency and hashtag usage is key to tapping into the app's user base, a multi-channel approach is necessary to involve luxury consumers in key regions. “Who buys luxury these days? Over 50 percent of growth in the sector is from Chinese consumers, and three quarters of that growth is Chinese millennials,” says Cereda. “You need to be able to engage with that particular nationality and demographic.”

Louis Vuitton's Qixi limited edition WeChat mini program store | Source: Louis Vuitton

Burberry launched its B Series drops on Instagram and WeChat, China’s multi-purpose messaging, social media and mobile payment "super app." Soon after, the project expanded to South Korea’s Kakao Talk app and Japan’s Line.

Rather than posting the same content from Instagram on the Asia-based platforms, brands need to take a localised approach, including hiring local influencers. “You have to have a local team, people on the ground,” Cereda continues. “Drops are not the same in different geographies, you’ve got to have people who know what they’re doing. It helps if you do focus groups and if you do your research.”

Take China: Louis Vuitton used WeChat's mini program function to create a storefront for its Virgil Abloh-designed sneaker drop. This month, the brand launched a limited edition mini program store with exclusive items in time for Qixi festival (the local equivalent of Valentines Day). For its mini program, Burberry added a countdown clock and sending push notifications to build up anticipation. But WeChat isn't the only avenue for brands looking to drop products in the mainland, and in September 2018, Moncler provided shoppers with exclusive pre-sale access to six Genius collaborations via Alibaba's e-commerce platform Tmall.

“With drops, brands have to walk the line between exclusive yet accessible,” Cereda adds. “The product can’t be that hard to buy as it’ll just frustrate the consumer.”

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