How Amazon is Tapping into the Streetwear Market Using Limited Collection Drops

For years, Amazon has tried to dominate the fashion industry and now it shows. With a 38.2% growth rate, apparel & accessories was Amazon’s second fastest growing category in 2018 behind food and beverage. Last year it also passed Walmart to become the most shopped apparel retailer in the US. To achieve this dominance Amazon has launched many initiatives including Prime Wardrobe in 2017, a try before you buy shopping program for Prime members. It also partnered with Makalot Industrial Co, a Taiwanese clothing producer for Gap and Uniqlo, to produce a private-label sportswear. And recently Amazon launched “The Drop”.

“The Drop” is an initiative that provides customers with: "exclusive access to limited-edition, street-style inspired collections designed by fashion influencers from around the world.” The first collaborations for this initiative included influencers Paola Alberdi, Sierra Furtado, and Patricia Bright. Paolo Alberdi, for example, has 1 million followers on Instagram. The initiative has a couple of interesting features. For one, once the clothing drops online it is only available for 30-hours. Also, all product is made on-demand before it is shipped. By only creating these products once they are requested, Amazon hopes to minimize excess inventory and waste. If customers miss out, they can provide their phone number to receive notifications for when the next drop is happening. Customers also have the option of purchasing an accompanying line of basic items called “Staples by the Drop” which can be ordered at any time.

With The Drop Amazon is emulating Supreme’s billion dollar business model which is based on a successful model of weekly drops of streetwear. Hypebeast, a leading online destination for men’s contemporary fashion and streetwear worked in conjunction with PwC to create the streetwear Impact report. The survey results stated that almost 50,000 consumers are purchasing new pieces every single month from limited drop collections. With a drop model customers are encouraged to be the first ones to purchase merchandise in order to secure the limited-edition, highly valued products. Many of those who purchase the from a streetwear drop collection later resell the merchandise at a higher price.

In launching this initiative Amazon is also trying to capitalize on the loyal following of influencers. The Drop will also help Amazon to increase its cool factor as it tries to compete with retailers such as Zara, Revolve and ASOS.

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