British retailer Boohoo has taken a tumble, with its stock falling 1% this past Tuesday. The company actually grew its sales by 52% overall, but its latest report is proof that sales don’t always align with stock. Here’s how the brand can match its image to its income.
One of three online pure plays tracked in Gartner L2’s Digital IQ Index: Specialty Retail UK, Boohoo swiped significant market share from legacy and fast fashion purveyors without operating any stores. The shopping site leads retailers in Facebook engagement, garnering over 30 million interactions last year. Its strength is showcasing shoppable photos and videos on the platform that elbow viewers to the brand site.
However, it’s possible that the decline in sales from 30% last year to 12% this year from its biggest brand, the namesake boohoo, may have nudged investors elsewhere. It also didn’t help that the company lowered its prices in an effort to get customers to buy more—often a sign of trouble ahead.
However, this doesn’t have to mean the beginning of the end for Boohoo. The brand boasts solid digital chops, with key site features like next-day delivery for a fixed annual price, a service also offered by competitor ASOS. Additionally, Boohoo reminds customers of abandoned carts through emails, often following up with discount codes. Though this is a great opportunity for Boohoo to tap into often unrealized revenue, it may want to cut back on the discount codes to help retain the integrity of the brand.
Another area for the brand to be careful with is omnichannel. Because Boohoo doesn’t have its own stores, it benefits most from the burgeoning industry specializing in third-party sales and returns. But while outsourcing logistics may ease Boohoo’s costs and increase revenue, the brand image might suffer.
For the very visible Boohoo, both opportunity and risk are high. If the fast fashion darling wants to succeed, it must pay attention to all its brands and all the places each brand could hit a snag.