Slick delivery is woven into the fabric of Boohoo.com, the fast-growing British e-retailer that offers ‘24/7 fashion’ to style fans around the world. Loved by customers for its fast delivery at competitive prices the company is generating impressive sales and profit growth.
A service similar to Amazon Prime launched in August this year and could drive loyalty by offering good value delivery to Boohoo customers who sign up. Boohoo Premier offers unlimited next day delivery for a year, following a one-off payment of £9.99. The company told eDelivery that it is too soon to reveal the sign-up rate, but that take up is expected to be high, reflecting fashion fans’ eagerness to get hold of the newest styles as quickly and cheaply as possible.
Boohoo has just announced full-year results that came in above analysts’ expectations with a 40% jump in revenues and profit. There are now over 4.5m active customers, up 28% on the year before. The Manchester-based company’s trading statement also shows a strong balance sheet with net cash of £67m.
Mobile and tablets now account for 72% of website sessions at Boohoo and order frequency is up 7.7% year on year. Customers on average buy 2.1 times over 12 months, the e-retailer has said.
Mahmud Kamani and Carol Kane, joint CEOs, said in the statement: “We are pleased to report a strong performance in the first half of the year, with robust growth across all regions and continued momentum in new customer growth.
“Our inclusive brand, unbeatable choice, together with our incredible prices and fantastic service, continue to inspire and appeal to young customers around the world. Through our constant focus on what matters to our customers, together with our investment in technology and operational improvements, we will continue to deliver profitable growth.
“ As a result of our continued momentum in the UK and encouraging growth in selected overseas markets, we now expect revenue growth for the full year of between 30% and 35%, reflecting tougher second half comparatives. Following the success in the first half of the year we will continue to look for opportunities to invest in marketing campaigns and our customer proposition to drive future sales growth and improve customer lifetime value. We will also be making significant investments in our IT systems and Ecommerce platforms. Consequently EBITDA margin for the full year is expected to be around 11%.”
Boohoo cleverly uses delivery as a marketing tool
A recent promotion was for next day UK delivery for £1.99 (which then dropped to £1.50) for a limited time. Naturally this delivery deal, prominently displayed on the home page and through social media, is a great sales driver.
Boohoo uses Royal Mail and several other delivery partners and has a growing customer base in Denmark, Sweden, Germany, Turkey, Australia, Canada, Russia and the US.
The marketing team at Boohoo does a great job of converting browsers to shoppers by offering special promotions on cheap delivery. The recent ‘next day UK delivery for £1.50’ promotion is likely to have caught the eye of many fashionistas struggling to look good on a budget – and there are plenty of young people who would leap at a great deal like that. If Boohoo and its delivery partners can make this work profitably – even for short, volume-driving bursts – then loyalty is in the bag. It would be fascinating to know how they plan for this, and what kind of sales spike is generated by delivery-focused marketing. It’s not new, but Boohoo does it particularly well.
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