Earlier this week, online fashion retailer Boohoo reported that its pre-tax profits rose 97% to £31m in the past year, almost doubling from just under £16m. Meanwhile, sales rose 51% to £295m.
Interestingly, this comes after the news that retail sales in the UK fell at the fastest quarterly rate since 2010.
So, is Boohoo’s success merely a reflection of the dwindling fortunes of the British high street? Perhaps somewhat, but with other online retailers struggling to capture interest, there’s a reason why Boohoo is head and shoulders above the rest.
Here’s what it’s been doing in order to drive online sales.
1. Influencer marketing
According to research, budgets for influencer marketing were predicted to increase by a whopping 59% last year.
Boohoo has evidently ramped up activity in this area, with influencer marketing now a huge part of its strategy to target its core demographic of girls aged 16-24.
The retailer has partnered with multiple influencers and bloggers to promote Boohoo across popular platforms like Instagram and Snapchat. One particularly successful example has been its collaboration with model Jordyn Woods on a new range of plus-size clothing.
The reason it worked so well was not only due to Woods’ personal social media following, but also her connection to other high-profile media influencers like Kylie Jenner and Justine Skye – names that Boohoo’s Generation Z-consumers are likely to be aware of.
More recently, Boohoo has also generated buzz from influencers attending Coachella – a festival that typically fills social media news feeds during April.
For more on influencers, download these Econsultancy reports:
2. Mobile mind-set
Google suggests that 68% of teenagers now shop via their smartphone, while 63% of millennials are said to shop on their mobiles every single day.
Unsurprisingly, two-thirds of online visits to Boohoo come from mobile, with the retailer subsequently taking steps to ensure that the user experience is as slick and seamless as possible.
Last year, it launched apps in international markets as well as a new and improved version for the UK.
Personally, I’ve always been a big fan of Boohoo’s app. In fact it’s one of the only examples from a fashion retailer that I turn to over its mobile site. Features like the ‘wishlist’ – which allows you to save items to revisit later – are perfectly aligned with the mobile experience, meaning browsing on the app is even easier than online.
3. International expansion
As well as strong UK growth, Boohoo has also seen a rise in profits in international markets, with revenue rising 140% in the US and 40% in the rest of the world.
What’s more, the brand looks set to increase expansion plans even further, acquiring Nasty Gal in February – a retailer with a large and existing customer base in the US. Combined with the fact that Boohoo also took over smaller rival, PrettyLittleThing, earlier this year, it looks set to capitalise on these takeovers with further international growth.
— NASTY GAL (@NastyGal) April 23, 2017
4. Fast and affordable fashion
Another draw for online consumers is undoubtedly Boohoo’s dedication to fast fashion – meaning the prices are low and the turnover is high.
Unlike ASOS, which is well-known for carrying a broad and expansive range of designers at a higher price point, Boohoo focuses on stocking key seasonal trends at low prices. While 11% of ASOS products are in the £5 to £9.99 category, this rises to 23% for Boohoo.
With consumer expectations rising, and millennial shoppers developing an ‘I want it now’ mindset, Boohoo’s business model enables it to deliver a rapid and continuous cycle of affordable fashion trends.
Its ‘test and repeat’ strategy allows it to quickly find out what items are selling online before ordering and stocking more.
— Halinalinalina (@viechoufleur) April 7, 2017
5. Harnessing social media and commerce
Its product offering is not the only reason Boohoo has such a large online customer-base. Its dedication to delivering high quality service – both pre- and post-purchase – has helped it to retain strong levels of customer loyalty.
One way it does this is through social media, using platforms like Twitter and Facebook to communicate and resolve customer service issues.
Of course, it also uses social to drive engagement, continually asking for feedback and opinions, as well as offering incentives such as promotions and competitions.
Meanwhile, its also appears to be veering into the world of social commerce, notably including new shoppable elements in a number of recent Facebook posts. While other examples of social commerce have failed to live up to expectations, Boohoo’s ability to resonate and relate to a young and fashion-hungry demographic could mean that its one of the first to truly take off.