To create product scarcity and ignite excitement among customers, fashion brands are increasingly adopting the streetwear-synonymous drop model. Regularly releasing limited-edition styles according to a seemingly random, versus seasonal, calendar is keeping shoppers engaged. For many brands, it’s the new norm.
Rothy’s, the 3-year-old direct-to-consumer footwear brand, has made limited production and pop-up online releases part of its strategy since Day 1.
According to Kerry Whorton Cooper, Rothy’s president and COO, customers have come to anticipate new style launches, which occur around every four to six weeks, quickly scooping up their size before it sells out. Seventy percent of styles sold in the first two days they’re released are to returning customers.
Limiting production
For Rothy’s, limiting production has been a sustainability play. Its shoes — flats made with comfort in mind, and available in a range of silhouettes, materials and shades — are made from recycled water bottles and can be recycled. They can also be washed, extending their lifespan.
Rothy’s owns and operates its own factory in China, where it staffs 400 workers, who craft the styles using 3D knitting. Materials perfectly shape to the form of the shoe, eliminating waste in production. Whorton Cooper said a very small drop can move from order to delivery at Rothy’s San Francisco headquarters in a matter of two days. Larger orders take 10.
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“In my days at Levi’s [running retail and planning for Dockers], we were working six months out, and making both factory and fabric capacity commitments,” said Whorton Cooper. “By definition, whatever you forecast is going to be wrong. With a shorter lead time, there’s a much slimmer chance you’ll see any excess.”
Predicting demand
Whorton Cooper said she relies heavily on Rothy’s director of merchandising, Lesley Clifford, to predict the hero styles of the season, calling it “an art and a science.” Clifford anticipated that a bright orange color, labeled persimmon, would be a best-seller for fall, so placed a larger order with the factory of styles in the shade. Based on the first two days of sales, a second order was placed to account for sold-out sizes.
“We want to temper the craziness that comes with [offering] collections that are extremely limited,” Whorton Cooper. “We don’t want it to feel like an exclusive brand.”
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Releasing and retiring styles
“Our customer loves newness,” said Whorton Cooper. “We want to keep things new and fresh, so we’re launching new colors all the time. But we’re also retiring colors often, so the site to become a dog’s breakfast of odds and ends.”
In-house, Rothy’s puts styles into one of three categories to determine how long they’ll stick around. “Basics,” or top sellers, are always in stock and make up 30 to 40 percent of sales — they include styles in black, marigold and chili red. Some are seasonal, like petal pink, which the brand will kill come fall. And then there are those that last four to six weeks, tops. “They’re in and they’re out,” Whorton Cooper said.
The latter group drives customer behavior, and FOMO: Customers are buying styles they like when they see them, rather than considering them and revisiting a product page to make a purchase, said Elie Donahue, Rothy’s vp of marketing.
Donahue said it’s often an unexpected press hit or an influencer’s stellar Instagram post that leads to a style selling out — it’s not planned. “We’re not only making 500 of them so that people will develop a greater hunger,” she said. “I know purposely selling out can be a strategy, but for us, it’s that we’re blindsided.”
Creating superfans
There are various social media groups, including a “Rothy’s Addicts” group on Facebook, set up by loyalists to facilitate news of releases, said Donahue. Group members regularly “scrape” the Rothy’s site, she said, to see what landing pages are in development and share their findings with the group. The brand’s store, which opened in San Francisco four months ago, often features extra-limited releases, and fans have taken photos of the styles as they’re being merchandised in the window, resulting in requests pouring in nationwide. And a style created in celebration of a brand anniversary recently sold on eBay for $500.
Rothy’s has catered to those fans by offering up styles to existing customers first and bringing back hot shoes, including a style for fall in a green called jellybean.
It’s also using them to its advantage. It has a referral program, giving a discount to customers spreading the word about the brand — it’s proven very successful, Whorton Cooper said. And the company is getting set to launch reviews on its product pages, to highlight and build on the 1,600 customer comments its accumulated so far. According to Whorton Cooper, the brand’s net promoter score, a measure of the willingness of customers to recommend a company’s products, are in the 100th percentile.
Rothy’s recently expanded beyond women’s shoes to girls’ styles and has another big launch set for next month. Whether the brand will work wholesale partners into its growth trajectory, Whorton Cooper said, “We’re operating so fast now, it would be a big shift for us. But never say never.”
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Other brands on limited-edition collections:
Aaron Luo, CEO and co-founder, Caraa:
“Launching limited editions can be am extremely powerful ‘tool’ for a fashion brand, but one needs to have a clear reason and plan behind it. We’re within the new wave of native digital brands with a strong follower base, so we launch seasonal limited-edition collections with two main goals: (1) to give our most loyal, cult-like followers access to a collection only our exclusive follower list can access for a limited period of time, and (2) to test the market reaction for a new set of products, without committing to a high [spend] from marketing and production budgets. We love testing market reaction through limited-edition collections because, to a certain extent, it give us the permission to test ‘who we are not.’ learning the market reaction around non-core evergreen collections.”
Elizabeth Otero, senior vice president of global product marketing, Mac Cosmetics:
“The newness imperative is one of the most important challenges brands need to tackle and requires different innovation strategies to compete, [including launching] new products to showcase innovation in key categories to protect or gain leadership. Collections that leverage brand icons in different ways to tell and retell brand stories, as well as collaborations — a combination of a coveted concept or collaborative partner with limited-edition decorative packaging, sold in limited quantities to drive buzz — drive demand and are meant to sell out quickly. Mac is a pioneer in dropping limited-edition, co-branded collections — we’ve been doing it for over 10 years. Consumers are accustomed to the consistent drumbeat of monthly launches. The mystery is part of the allure that keeps our fans excited.”
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