An injection of capital and the recent addition of a former Nike executive has a Las Vegas-based e-commerce company poised for growth.
TheDrop.com, an online marketplace selling major and boutique streetwear and skateboard brands, announced this week that Scott Keating will step into the newly created role of chief merchandising officer. Keating, previously global sales and brand director for Nike SB, joins two months after TheDrop raised $4.6 million in a Series A funding round.
Matt Falcinelli, TheDrop’s CEO, said the infusion of capital has helped the company add employees to meet increased consumer demand. He added that it’s also looking for an office space. The company has been operating remotely since launching in July 2017.
“We’re 14 people (now). We were nine people for two years — pulling our hair out, testing the limits of our sanity,” Falcinelli said. “We were about to sign a lease right before the pandemic and luckily, literally right before it all hit, we thought maybe we should hold off. But we want to put our base in downtown … where we can just have this open creative office.”
TheDrop has grown from hosting apparel and footwear from 20 brands to more than 300 and credits the expansion to its proprietary software platform and emphasis on creating weekly drops, in which a curated mix of new arrivals appear on the website.
Falcinelli said it’s not only helping younger brands that may not have the resources to manage an e-commerce site, but also major brands such as Nike, Vans, Volcom and Timberland.
“Bigger brands are starting to cut off a lot of their wholesale accounts so they’re not going to the large multi-brand retailers because they want to sell direct more,” said Falcinelli. “But they don’t have that expertise in-house so they need a platform like ours that can immediately help place the margin dollars that they’re cutting out from their wholesale channel.”
Falcinelli started TheDrop in 2017 after stints at Backcountry.com and Skullcandy, where he focused on the software side and data analytics.
He said the company soft launched with 20 brands that “were friends of ours that ran those brands or owned those brands,” adding that the company had no marketing budget.
“We built it because we know that hardly any brands in our industry have software developers in-house, but we built a way for them to sync to us and make it ridiculously easy and that’s what made it a no-brainer for a lot of brands,” said Falcinelli.
The site sells men’s, women’s and children’s clothing and footwear as well as home goods such as art books by Taschen and candles from Boy Smells and even pet accessories. And its target audience are millennial and Gen Z shoppers.
TheDrop doesn’t handle merchandise so brands are responsible for fulfillment and shipment of orders, but TheDrop manages payments and customer service. So, when a customer orders sneakers, they’ll receive their confirmation and shipping updates from TheDrop, but behind the scenes, the sneaker brand packages and ships the order.
Falcinelli said the company makes its money by taking a percentage of each transaction.
“It’s only a cost to the brand or the shop when something sells,” he said. “In exchange, we handle the marketing costs, payment processing and any fraud or chargebacks, and customer service.”
Falcinelli said in a company statement that the addition of Keating will allow the brand to scale its business.
Keating has spent 14 years at Nike in a number of leadership roles, including leading the now-defunct Nike Snowboarding division. At TheDrop, he’ll be be tasked with leading the firm’s global merchandising strategy and managing its brand relationships.
Falcinelli told the Review-Journal that its latest funding round will not only allow new hires, but will also help the company grow its storytelling initatives, which involves marketing new product releases on its website and social media channels. For example, it created a blog post this week, diving into the background of Seattle-based brand Thank You Skate Co. while highlighting the label’s T-shirts and skateboards available for purchase on TheDrop.
“It’s a balance for us,” said Falcinelli. “We want to be at the point where you want to come in looking for a pair of Vans, but ‘OK, we’d love to tell you about these other brands,’ like Clearweather and brands that are coming up really quickly.”
He said it’s also why the company hopes to soon establish physical headquarters in downtown Las Vegas.
“We really want to help incubate future businesses in our industry and kind of start creating a fashion ecosystem in Las Vegas,” he said. “We’re very bullish on Las Vegas, on downtown and the Arts District. And we want to be a catalyst for positive growth down there.”