U.K.-based e-commerce retailer Boohoo is pushing into the U.S. market with a focus on the physical shopping experience.
The company, launched in 2006 as a pure-play online retailer, deals primarily in women’s hyper-trendy fast fashion, and it has recently extended its product categories to include menswear, children’s clothing, maternity wear, plus-size lines, athletic apparel and a higher-end “boutique” line. Boohoo’s ability to quickly respond to trending fashion and get relevant items live on its site with a short lead-time has propelled it to prominent status in the world of high demand for fast fashion. The retailer, which has a 70 percent mobile conversion rate, says that it adds 100 styles to its site each day and has 20,000 products live on the site at any given time.
As Boohoo reaches to grab more customer dollars through expanding its categories, it’s also eyeing territory outside of its native U.K. The U.S. and Australia round out the retailer’s top three regions. In the U.S., Boohoo is on a tear to win over America’s millennial and Gen Z female demographic, specifically targeting college-aged women: After two back-to-back college tours and two pop-up stores that edged near UCLA and NYU campuses, Boohoo is also speculated to be eyeing the acquisition of the recently bankrupted millennial retailer Nasty Gal, which specializes in trendy, slightly pricier clothing for a young, female demographic.
Boohoo’s U.K. representatives wouldn’t comment about talk first reported by Business of Fashion that the retailer had put out a bid for Nasty Gal, but Boohoo did register the name “Nasty Gal, Ltd.” as a new company in the U.K. right after the U.S.-based retailer filed for Chapter 11 bankruptcy in early November. The acquisition of the company would fortify Boohoo’s presence in the U.S. while at the same time bridging Nasty Gal’s consumer base to the U.K.
Boohoo, in its half-year earnings posted on Sept. 27, reported a revenue increase of 40 percent, to $159 million, for the first six months of 2016. It also reported an increase of 93 percent in the U.S., a new market for the brand; revenue increased from $9.9 million to $19 million in the same period. The U.S. market is the strongest growth region for Boohoo, while it’s still relatively tiny compared to the U.K. market, which grew to $102 million in the first six months.
“It’s anything that they can do to really build the brand,” retail analyst John Stevenson told WWD. “That is the name of the game now. For them it’s about the Boohoo brand. They’re after the customer profile.”
Natalie McGrath, Boohoo’s vp of U.S. marketing, said that to propel that growth in the U.S., the company’s main priority is to make a physical impression on new customers, including those who may be hesitant to purchase from a company they’ve only encountered online. As a pure-play online retailer, Boohoo still counts the physical experience as a core component to its business.
“Our marketing strategy overall is to spend assets on the physical and experiential,” she said. “When the market is so cluttered, people want to be able to feel the product and know what the quality is like. It gets people over that first hurdle and reduces the barrier to purchase.”
Boohoo hosted a pop-up shop at its New York office this fall, and the company is currently relocating offices in Manhattan so it can turn its former space into a permanent “digital storefront”: a physical branded space that carries some product, while the majority of the selection is browsed on iPads. The store’s purpose, beyond product, is to encourage face time with Boohoo representatives, and host community events and social activations created with the local customer in mind. In L.A., for instance, a similar pop-up space hosted a flower crown crafting event over the summer.
Right now, Boohoo’s U.S. strategy is concentrated on the east and west coasts, but the company plans to use data to drill down into state-specific consumer behavior patterns and interest trends. Boohoo has a “sizable” in-house data analytics team, according to McGrath, who couldn’t provide a figure on the exact size of the team. Boohoo’s handle on customer data guides everything from the products it chooses to sell on the site and at what volume, to where to launch its next pop-up shop, to how it should speak to customers through email and content marketing in different regions.
For instance, while Boohoo’s core customer is between 16 and 24 years old, internal data showed that enough of them were mothers for Boohoo to launch two lines: maternity and kids’ wear. On Boohoo’s main product feeds and in marketing messages, the content changes depending on season and climate of the region you’re shopping in.
As Boohoo looks to expand in the U.S., it will curate the product selection customers see in physical storefronts to cater to regional customers. With 20,000 products on sale at any given time, it would be physically impossible to include even a majority, and that’s not Boohoo’s goal.
“We’re not interested in traditional retail,” said McGrath. “ What’s more interesting to us is having a place where customers can engage and we can support buys online. A lot of the comments we see are people [stating they’re] desperate for us to have a physical store, but as an online retailer, we have more room for growth in other ways.”