Analysis: How Boohoo has played to its strengths during coronavirus crisis

By virtue of its online-only model, Boohoo – which comprises the eponymous brand and its male counterpart Boohooman, PrettyLittleThing, Nasty Gal and more recently Miss Pap, Karen Millen and Coast – is well placed to take advantage of a channel shift in shopping habits accelerated by lockdowns.

“There’s obviously an opportunity to take advantage of the fact that customers can only shop online,” says Boohoo chief financial officer Neil Catto. “We have seen customer acquisition [grow] quite strongly during the lockdown period and we will try to engage with these customers as much as we can.”

Like competitor Asos, Boohoo, which released its results today, reported a pattern of demand since the outbreak that began with an initial drop followed by a period of improvement. The retailer has reported year-on-year group sales growth in April.

Unsurprisingly, as consumers stay at home, trends such as loungewear and nightwear have been bestsellers. But it is Boohoo’s agile operating model that has enabled it to respond to such changes in consumer preferences in a timely and compelling way that ultimately tipped the scales in its favour, despite global uncertainty.

Supply chain flexibility

At any one time, Boohoo holds more than 80,000 styles across its brands and it has created a supply chain with the flexibility to move production around and make orders at a moment’s notice.

After the onset of coronavirus earlier in the year, Boohoo was faced with the closure of factories in China initially, followed by more countries as the infection spread.

“On the supply base, we’ve had a shake-up since the beginning of the year – certainly from the end of January when China was the first to close factories,” says Boohoo co-founder and executive director Carol Kane.

“Our agility has meant we were able to move production around where factories were open, so when we were faced with China closing, we sourced our products elsewhere. And as those factories closed, China has reopened.”

This ability to move production is backed by Boohoo’s strong relationships with its suppliers. Unlike some others, the retailer has honoured all orders made to suppliers, has not asked for any discounts and is paying them in 14-day terms. 

While it may affect the bottom line in the short term, Boohoo’s decision to stand by its suppliers will serve them well in the long run.

Boohoo also prides itself on its ‘test-and-repeat’ model, which allows it to react to changes in fashion as quickly as the consumer does.

“We’re already seeing a shift into lighter-weight clothing currently from the heavier joggers that we were selling just a few weeks ago, so demands are changing quickly due to the warmer weather,” says Kane.

“Because we have an agile supply chain, we sample all the time, and with our test-and-repeat model in place, when the consumer trends change we’re able to place those orders fast.

“If the situation does change and lockdown is lifted we can be ready with our vacation wear collection, but we don’t need to put those orders in today for them to be ready in time, meaning we can play everything very close to the market.”

Social media prowess

Much of Boohoo’s target audience is in the 16- to 24-year-old age group and social media already makes up a large proportion of the retailer’s marketing channels. But more time spent at home because of lockdown has meant consumers are spending more time on social media than before.

To capitalise, Boohoo altered its marketing strategy to focus solely on digital channels and, vitally, used social media to put out relevant content and engage customers as they adapt to the new normal.

The retailer has noted key characteristics that apply to its customer base to help drive its strategy. First, consumers are still interested in fashion and beauty despite the current situation, so Boohoo has enforced a “keep on being you regardless” philosophy. Despite lockdown, Boohoo’s audience is still social and active, so there is a need for a focus on “staying in is the new going out” and working out from home.

The fast-fashion etailer has also noticed that its customers are still very much engaged with social media, even seeing a spike in the number of likes on its posts, meaning hashtags, video and social content are more important than ever. 

However, rather than take a one-size-fits-all approach, Boohoo has harnessed the key tenets of each brand to create content in keeping with these behaviours.

It began the #boohoointhehouse campaign in which models, influencers and members of the Boohoo team took photos of themselves in new clothes at home to serve as product images.

Customers have been encouraged to post their own pictures for the chance to win anything from free fashion to virtual hen party boxes, with a new competition almost daily.

The Boohoo brand also ran a virtual festival earlier this month featuring artists performing from their homes.

US brand Nasty Gal has focused on a “work from home wardrobe”, featuring content from the head office team showing what they are wearing. It has also run live yoga classes, meditation sessions and DJ sets.

Targeted at a slightly older demographic and, in the absence of events such as weddings, occasionwear brand Coast has given date-night-in tips and self-care guidance.

Across all its brands, Boohoo has made effective use of its influencer network as a way to further engage with customers and promote its clothing.

A diverse offering

The many labels under the Boohoo umbrella have deepened the etailer’s resilience by extending its appeal to more customer groups. 

“One of the positives of the diversification of our brands is that they’ve all got pretty broad offerings, and we’ve been working hard to extend these even further in our newest brands,” says Catto.

Coast, for example, which was acquired last September, has achieved a 150% increase in its range of products and the ambition is to grow Coast from an occasionwear retailer to have a broader focus on “modern femininity”. Boohoo also reduced its nine-month lead time to nine weeks, giving the brand more of the agility the rest of the group is known for.

Catto also hinted that Boohoo is open to “looking at opportunities as they arise in the coming months” to diversify its brand portfolio further. With fashion houses such as Coast’s old stablemate Oasis on the market, Boohoo’s plans may come to the fore sooner rather than later.

The tough fashion market could provide more opportunities for Boohoo to demonstrate its ability to move fast.