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Retail Focus: Boohoo’s success formula

EDITD reveal the recipe for success at pure-play apparel retailer Boohoo, exposing data about their product assortment, chosen trends & pricing architecture.
Retail Focus: Boohoo's success formula | EDITED
  • Boohoo Homepage August 2013
  • Boohoo Men's Homepage August 2013
  • Boohoo Homepage July 2013
  • Retailer Focus Boohoo tribal print pricing
  • Retailer Focus Boohoo skater dress pricing
  • Retailer Focus Boohoo swimwear pricing

It’s been a killer year for pure-play e-tailer Boohoo, with the launch of their menswear line and their successful entrance into Australian, New Zealand, US and Canadian markets. In a climate of apparel news headlines reporting redundancies, Boohoo this week announce they’re creating 50 new jobs at their northern-England HQ and the public have awarded them as the Best Online Retailer in a contest run by popular UK television show, Lorraine. Launched in 2006, what is their secret success formula? We dug into our data to find out.

 1. Menswear expansion
Boohoo have been savvy to extend into the menswear market – men’s value fashion is under-served online. In the £10-40 price bracket (Boohoo Men’s current average price is £14.94), there are 146% more items retailing for women than men. Although men aren’t as frequent shoppers, their purchasing habits make them easier to sell to online and the market is gaining pace.

Zalando and ASOS are the retailers with the largest men’s value fashion offering, but in 3rd place is Debenhams, who don’t position themselves as fast fashion. Boohoo can realistically compete for this spot; despite only launching their menswear line last month, they are already rank 34th in their size of offering around the £10-40 price range.

2. Product Pricing
Boohoo’s real draw card is their pricing which, whilst Primark isn’t online, is almost unbeatable. The average price of womenswear at Boohoo is £13.15, trumping ASOS’s £40.54, Zara’s £34.58 and Nasty Gal’s £45.23. Only Forever 21 directly compete with a current average womenswear price of £10.44, but Boohoo gain back by having 19% more products in their offering.

Boohoo’s SS13 best-selling items read as a succinct selection of styles, demonstrating they know what their customer wants. Bodycon dresses, bikinis, swing and skater dresses, aztec prints and tie dye prints all sold incredibly well across a number of different styles and shapes. Knowing these trends to be key to their customer, Boohoo has competed aggressively on pricing in these areas.

The option counts on the right illustrate the pricing architecture around each of those categories at key global fast-fashion retailers. Whilst ASOS’s strengths lie in the breadth of their offering, Boohoo focus attention on stocking a large assortment at the lowest possible prices. The only category amongst Boohoo’s SS13 fastest-selling garments (demonstrating their consumer’s interest) which they aren’t winning the price war in is swimwear – ASOS beat them on both size of offering and price point and Zara and Forever 21 beat on price. This needs to be addressed for SS14.

3. Colourways
Perhaps Boohoo’s best kept secret is their colour weapon; their product count is increased by 59% through offering styles in different colourways. Their next closest rivals are Forever 21 and Zara at 35% and 33%. This has been a key way for Boohoo to expand their range and repeat successes while giving an impression of newness on existing styles – saving themselves both time and money in the product development stages.

The Laura maxi dress is an excellent example of this – the £12 dress in its current incarnation (there have been earlier printed and side-split versions) has been retailing since 31st May 2012. Five new colourways were introduced this season, bringing the total number of colourways to 13. When the product was first carried in 2012 in black, coral, cobalt and cerise, it was available in sizes 8-14. It is now retailing across colourways in sizes 6-16. Repeat orders like this allow Boohoo to perfect fit and at the £12 price point, their customer is tempted to purchase more than one.

4. Trend assortment
Boohoo aren’t only offering their consumers a broad range of products at incredibly competitive prices, they’re also selecting the right trends. Our Trend Dashboard monitors every trend across the market in real-time, based on commercial data, consumer sentiment, street style, runway coverage and influential editorial. Currently Boohoo are stocking every single trend in the Dashboard’s top 30, giving them serious consumer clout. They have options here on how to grow: either building their trend offering beyond those top 30 or tapping into analysis for the latest updates of those they’re already stocking.

5. Digital Presence
Boohoo tick all the boxes when it comes to social media, with an active Twitter account plus 1.6 million fans on Facebook. Their Facebook postings often call for followers to vote or pick a favourite from products, engaging consumers and ensuring repeat page views. They also have vital magazine content for both women’s and men’s lines on their site – giving their trend driven shoppers even more reason to return. Earlier this month they launched their first shoppable video, starring Little Nikki, which has already attracted more than 58,000 views on YouTube.

Boohoo’s online presence shows they’re not missing any tricks, and are giving this area priority and budget, ensuring they’re well positioned to adapt to any future digital developments.

6. Ease of shopping
Boohoo’s online persona is not only engaging, but the user experience is also a success. They have the crucial “Back in Stock” and “Last Chance to Buy” sections that our June blog post revealed to be successful – persuasive devices for consumers seeking pre-purchase validation. The retailer shows thoughtfulness too – in curating a section specifically for smaller sizes (size 4 & 6 garments) and links every product to those similar as well as others within the same trend story.

So how can Boohoo continue to grow? With wholesale, competitors like ASOS have the ability to broaden the range of consumers they appeal to by offering brands and pricing spanning a wide mix. Boohoo have made forays into premium lines, with their Boutique collection. It hasn’t yet worked for them however, with prices being subtly dropped without declaring a sale on those items. A maxi dress which arrived in June at £35 was dropped mid-July to £30 and now sits at £25 without drawing the consumer’s attention to the price drop – a sure sign demand was over-estimated. Growing price spread wouldn’t work for Boohoo, instead they should concentrate on ensuring they stay at the most competitive end of the market, with the freshest trends.