Marketing Week (MW): Boohoo is due to float on the alternative investment market (AIM) in the next two months. Why are you going public?
Carol Kane (CK): The time is right. We’ve got to raise the profile of the brand to reflect our growing size and brand momentum. I think the most important reason though is to maximise flexibility in finance and to grow the business in the UK and internationally.
MW: The IPO was slated to happen at the end of 2013. Why didn’t it go ahead?
CK: [December] was a silly time to put it together as it is our biggest trading month, so we couldn’t really leave the office to go off and do something else. It just wasn’t appropriate to run the business [in the run-up to Christmas] and go through the IPO in the same month.
MW: Over the past year you’ve been expanding around the globe. Where has the brand thrived?
CK: Our domestic market is still really important, but we are now shipping to 100 countries. We’re the second biggest pure-play online retailer in the UK and probably the sixth most visited fashion and apparel site overall [according to Experian Hitwise].
Overseas we’ve got a strong foothold in Australia and New Zealand. We’re now looking to expand our growth through local language websites in 2014/15. We launched our first non-English site in France last October.
MW: How do you choose which countries to enter?
CK: We look at where there is a natural appetite for the brand. We have only strategically marketed in seven territories, yet we ship to 100 countries, so we look at where demand is strong. We’re seeing a lot of appetite in Scandinavia and in Germany, and we’re starting to do well in Holland. We’re also doing well in northern Europe, having seen orders come from Poland, Estonia, and others in the region.
It’s like there’s a stock market in our building but with dresses on the screens
Looking at our latest figures, 35 per cent of sales are generated overseas.
MW: Boohoo has really stepped up advertising in the past couple of years. What is your strategy?
CK: We are big advocates of advertising. When we set up Boohoo [in 2006] it was important to build the brand and get our story out there. People might have expected us to start with digital advertising, but we took the opposite approach. That fast-tracked us because we got our brand awareness up really quickly, even without having a presence on the high street. We started off with press and billboards, then in September 2011 we advertised on TV and haven’t looked back.
MW: Which marketing channels do you give most weight to?
CK: It’s currently tracking at about 60/40 in favour of above-the-line, but that’s purely because TV media spend is more expensive than digital channels. I would say we probably have more dedicated resources below-the-line. That will likely move to 50/50 as we move into new markets where digital channels may be better for us. In the US, for example, TV can get very expensive very quickly, so it will vary between markets.
MW: How is your marketing structured?
CK: We’ve got a UK team and the beginnings of an international team [both of which Kane oversees]. We are now in the process of recruiting our first marketing director and hope to have the post filled very soon.
Within the UK team we have a content team who are responsible for all the branding and an in-house creative team. We also handle PR and social media in-house and have a digital team who manage pay-per-click advertising, SEO and affiliates at home and internationally. There are international members within all the teams.
In the strategic markets we’re in, we also use agencies for buying media, supporting us on social media and PR, but we do travel to each territory quite often as well.
MW: Who is your main competition? Is it just pure-play digital businesses like Asos or do you cast the net wider?
CK: I would say it’s the [brands on the] British high street, which have been working very hard on their online presence over the past few years.
Young consumers especially use the high street to look around and have a coffee, but then they go online [to buy], so it’s really important for us to make sure we remain relevant to everything they’ve seen on the high street while still having our own identity. There’s no point in us having an offering that is alien to everything else they see and touch throughout the day. We’ve got online competition too, but it’s the online competition of the British high street, and Asos too.
MW: Boohoo expanded into menswear last year, which analysts have said was a savvy move as value fashion for men is underserved online. How have you looked to attract this market?
CK: We launched our menswear range to the press last July and it’s going really well, even though we haven’t actively marketed it much yet. What we have found to date is that girls are buying it for the man in their life. We can see that in November and December figures. It’s never going to be as big as womenswear for us but we do plan to grow it and get it out there more. We are launching our first menswear TV campaign on 3 February. We’ve actually featured menswear in our [womenswear] TV campaigns for the past year so we are getting a bit of traction from that, but this will be our first standalone menswear TV ad and we’ll be putting it on more male dominant channels like Dave and Sky Sports.
MW: What do you find is the best way to communicate with consumers online?
CK: We’re very good at profiling our audience and for us it’s about being really inclusive as a brand. Our ultimate aim is to sell clothing, but we are also a destination for fashion where consumers can hang out, go to our social channels, watch our videos and come to us for inspiration. We do find that people who engage with the content on our site are more likely to go through to sale.
MW: Boohoo enables consumers to buy clothes direct from its videos, first seen in the collaboration with singer Little Nikki last year. What effect does this have on sales?
CK: It makes the whole user journey really simple and we find that most things sell out. The only downside is keeping stock levels up because products featured on our TV ad and within shoppable videos get a really good sell-through.
MW: To what extent does Boohoo create fashion trends or react to the season’s top trends?
CK: Because I have a design background, design is very much [at the heart] of the business, and because of our history in manufacturing and going from trend to online we have a really short cycle of four to six weeks. We call it catwalk to closet. We do pre-collections before the shows and we also react to catwalk trends. We look at what the big influences are going to be and do our own commercial interpretation that’s right for our consumer. Trends emerge throughout the season too, which may come from influencers and bloggers or something at street level. We can react very quickly because we have our own design team and a lot of UK sourcing, plus we have very short leads out of the Far East.
MW: How quickly are you able to see which items are successful and respond?
CK: We monitor sales within 24 hours of stock going live and we react very quickly. We have screens that show how well things are performing. It’s like having a stock market in the building but it’s pictures of dresses.
It’s fast fashion. Last year we ran 20,000 lines over a 12-month period, but we currently have about 8,000 lines running through as new lines come in and old lines go out.
MW: What’s your bestselling item of all time?
CK: Our best selling dress is the Cheryl skater dress priced at £20. We also have a long maxi dress is our Style Steals section, which has sold really well too. It has a very low price point, which drives huge amounts of volume. It’s a dress that any girl can wear and it even sells well in the winter. We get through tens of thousands.
We don’t hang our hat on Style Steals, though. We have always been more about the £20 dress. I don’t feel it’s healthy for brands to say they are about really low prices. We’re very much about value – the latest trends at the best possible price.
Top 10 online fashion retailers in the UK
Total unique visitors (December 2013)
Next Group: 5,101,000
Arcadia Group: 3,570,000
New Look: 3,223,000
River Island: 2,287,000
M and M Direct: 1,529,000
Clothing at Tesco: 1,322,000