Amazon’s The Drop and associated supply chains

Amazon’s website “The Drop” describes its process as consisting of collections that are available for 30 hours, are designed by influencers and inspired by street trends. Their limited availability reflects supply constraints based on fabric availability. But the limited availability also creates a rush to buy immediately. How would you plan supply to meet an unknown demand ? Would Amazon be better off to have a lower fill rate to create a sense of urgency to purchase i.e., is it a case of build and they shall not come ? Should the apparel be built in advance of demand, with inventory being used to satisfy demand, or should these products be made to order with a longer fulfillment lead time ?

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1 Response to Amazon’s The Drop and associated supply chains

  1. Amanda Tronchin says:

    The first is to research the influencers and learn about their viewership base. Understand their demographics, their buying power, and spending trends; since Amazon collects tremendous amounts of data on its current customers, there is a high likelihood that the influencers’ fan base is also Amazon customers. With that information, demand for the “The Drop” products could be determined. By understanding demand, then supply is easier to select.

    Second, it is crucial to have a lower fill rate creating a sense of urgency, but there needs to be a sense of scarcity, meaning that the quantity that “dropped” may be all the quantity available. While there may be more supply for a second “drop” to happen, it is essential to have customers believe this is a once and a lifetime event for this drop. Inventory should not be built to satisfy demand because that removes a layer of scarcity for the product. The products should be made to order with a more extended fulfillment lead time, but there needs to be a limit on the quantity that could be made, even if orders are placed within the 30 hour drop period.

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