Important Business moves, Strategies adopted by boohoo.comby Your RetailCoach YourRetailCoach
Founded by Mahmud Kamani and Carol Kane in 2006, boohoo.com is a UK-based online fashion retailer. The company successfully positioned itself as a brand for young girls and women. It also quickly gathered business attention in the fashion industry.
Off late, boohoo has been in the news for some of its ads. Ads can be tricky in ways that they are packed and unpacked. At the same time, out-of-the-box ads are capable of shaking or broadening our perspectives.
In this article, we shall delve into some of the business moves and positioning that helped boohoo script its success story.
Focus on fashion for the youth
According to UNESCO, in 2012, people under the age of 30 constituted as much as half of the world’s population, which surpassed 7 billion the same year. That presents a massive market segment globally and that’s majorly where boohoo has been focusing on. And as of 2019, the median age of the world’s population stood at 29.8 years. The boohoo group clearly states that it is targeting the market segment constituting of people in the age group of 16-40 years in the U.K. as well as internationally. Clearly, the target audience for boohoo is the young customer who is aspirational and aims to wear designer fashion clothes.
Adding relevant brands to the portfolio
Branding is a powerful driver of business. Adding powerful brands can escalate business growth with a multiplier effect. That’s exactly what boohoo achieved by acquiring PrettyLittleThing and Nasty Gal. In 2017, boohoo acquired these two brands and registered robust growth in its total revenue and profits in the two consequent financial years. Adding these two brands to its product portfolio helped boohoo achieve a phenomenal jump of 97% in revenue from 2017 to 2019. During the recently concluded financial year, the company has reported robust numbers that include revenue of £856.9 million and PBT of £59.9 million by virtue of adding these brands to its portfolio.
Low Price High Volume
These are interesting times when most of the fashion retailers are finding the going tough; boohoo is consistently outperforming and is becoming the darling stock of analysts all over the United Kingdom.
One of the most important things that boohoo does is that it targets fast fashion by focusing on low prices and keeping the turnover high. Unlike its competitors, who are known for carrying a broad range of expensive designer clothing, boohoo focuses on keeping the prices low and stocks only the key seasonal trends. A prime example of this would be boohoo’s comparison with one of its main competitors ASOS – one of the pioneering companies in fashion eCommerce. Around 11% of the products that ASOS sells are in the range of £5 – £9.99. In the same price range, boohoo keeps 23% of its products. This means that boohoo primarily focuses on cheaper garments and hence is more popular amongst youngsters who choose not to indulge in expensive fashion wear.
Test and Repeat
Another witty strategy followed by boohoo is that of ‘test and repeat’. Here, a brand tests small quantities from a wide range of products to get the hang of the market response and later increases the production of those items if the demand or market response criteria are met with.
Combined with its ‘Low Price High Volume’ strategy, boohoo effectively targets the experiential mindset of millennial shoppers who are inclined towards change and keeping up with the trends in fashion.
Boohoo’s business model is a shining example of how a company can tap the millennial market.
Riding on the smartphone trend
According to another report, round almost 7 out of 10 teenagers are now shopping on their smartphones as opposed to desktops or laptops. With a rising number of smartphone shoppers around the world, boohoo understands the significance of the mobile shopping experience. Two-third of boohoo’s online traffic comes from smartphones. This has turned the company to put special emphasis on creating a seamless mobile experience for its visitors and shoppers.
In 2016, the company launched smartphone apps in the international markets and also upgraded its app for its main market i.e. the United Kingdom. The company added features like ‘wishlist’ and account settings making the mobile experience richer by miles. The boohoo app provides a smooth UX platform and also gives added discounts to its loyal customers which acts as an incentive to shop from the app.
Understanding where your customers are – plays an important role in determining the success of your sales strategy. Boohoo understands that its customers are on smartphones and are increasingly making purchase decisions from smartphones. Being able to adapt and adjust its marketing efforts based on changes in its key business variables is one of the major reasons why boohoo is able to consistently perform well.
Social Media Marketing: Use of influencer marketing, positioning, and social shopping
According to a survey, 89% of marketers say that the ROI from influencer marketing is nearly as good as or even better than other marketing channels. A resounding thruster to influencer marketing is that social proof is increasingly becoming a norm. A loyal fan base, trust on influencers, and offbeat content that doesn’t look as intrusive marketing helps in conversions and promulgate a brand.
Boohoo has tagged itself along with the wave of influencer marketing. It understands that influencer marketing is an emerging phenomenon in marketing and could play a vital role in the promotion mix. The group has partnered with celebrities with enormous social influence like Paris Hilton and Gemma Collins for endorsement. Apart from the big names boohoo also partners with popular fashion influencers on Instagram and Snapchat.
Boohoo’s association with Jordyn Woods is a good example of its efforts in using influencer marketing on social media. Woods is a popular face amongst the youngsters and is considered to have strong social connections with other star influencers. She is associated with boohoo for its new range of plus-size clothing.
With the combination of digital marketing tools and influencer marketing, boohoo can accurately track the success rate of each influencer campaign and make the necessary adjustments in its other campaigns accordingly.
With the increasing dominance of social media, brand positioning on various social media platforms just cannot be left unaddressed, especially by eCommerce companies. A trace of boohoo’s brand positioning on social media is evident with #BoohooBabes. That’s the tag used to connote the brand persona of boohoo.
Boohoo reckons the rise of social media usage and that most of its customers are active social media users and hence, it has veered into the world of social commerce or social shopping. The company has included the element of social shopping in some of its official social media pages.
Breaking the cliché
The fashion industry has been targeted by many feminine activists who claim that the industry promotes the ideal image of a woman as one with an hourglass body figure. Doing so creates an inferiority complex amongst many young women who then consider such portrayals as the standards and seek to mold themselves. Taking a different approach, boohoo has sought to unfreeze the stereotyped sense of fashion. Unlike the conventions, boohoo has moved forward with faces that resonate more with common people.
By adopting this strategy, boohoo has positioned itself as a socially responsible brand that believes in empowering women irrespective of their physical attributes.
Boohoo is yet another example that shows action and ingenuity are essential ingredients for success. You just cannot sit there and wait for business to happen. Business got to be made happen. When smartphones started to become popular, boohoo read that and launched its app. Most of the youth are not financially independent or are reluctant to spend much into fashion wear; boohoo sought to address that with economical pricing. Boohoo did not do anything alien; it just never stops finding better ways to connect with its customers.
Your Retail Coach (YRC) is a retail consulting and outsourcing company in India offering a wide range of services in retail offline, retail eCommerce, and retail omnichannel, catering to a multitude of industries and clients including fashion retail players.
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Source from: http://www.marketprnewswire.com/important-business-moves-strategies-adopted-by-boohoo-com/
Created on Feb 1st 2020 04:16. Viewed 174 times.