High street fashion brand New Look have had a tough first quarter, with a 7% drop in UK like-for-like sales, leading to a 4.2% decline in overall revenues. Chief executive Anders Kristiansen has pinned this drop on “unfavourable market conditions”, hinting at the build-up to and aftermath of the EU referendum, which led to a decline in consumer footfall and a slowdown that affected much of the high street.
However, New Look highlighted that sales from their website rose by 9% in the last quarter, with many newspapers concluding that this reflects a broader move away from the high street, towards online shopping. This theory seems to be supported by the continuing success of fashion e-retailers, such as ASOS and Boohoo; both of which are defying the slump currently being suffered by many high street brands.
While it’s true that consumers are increasingly choosing the convenience of buying online over an in-person shopping experience, the move from street to screen isn’t the only thing contributing to the success of brands, such as Boohoo, and the failure of other brands, like New Look.
Attracting younger consumers
Our Consumer Insight Series illustrates not only where brands rank in the eyes of consumers, but also what motivates those consumers - their passions, aspirations, interests and influences. Looking at our segmentation of the UK fashion industry, New Look’s predicament becomes a lot clearer.
Of our ten consumer segments for the UK women’s fashion industry, New Look excels amongst high street shoppers, realists and homebuyers. These consumers are conservative shoppers with other financial demands constraining their spending. This is supported by their passions; for our Shopping Realists segment, House & Home is more important than Fashion. When it comes to this group, buying clothes is a lower priority than creating a welcoming home for themselves and their families.
Boohoo, on the other hand, is extremely popular with Young Mainstream Fans, with 63.7% penetration into this group. This indicates that they have the eyes and ears of young consumers - teenagers who have grown up online, and whose shopping addiction won’t be immediately affected by macroeconomic factors. Their passions reflect their more carefree spending habits, with Fashion, Celebrity Gossip and Health & Beauty as key interests.
So, while New Look attracts the cost-conscious crowd, Boohoo’s popularity with a younger, less financially-pressured demographic has enabled them to grow at a time when others are in decline.
How can New Look replicate this effect?
The key lies in understanding the mindsets of consumers - the brands they follow, publications they read, TV shows they watch and people they admire - which is where our Consumer Insight Series can help. Our insights help brands understand who they should be targeting and how best to target them. Once a brand has built a solid picture of their target customer, they can use this knowledge to inform their marketing message and outreach, and, ultimately, to increase their appeal.
Boohoo has done exactly this; their marketing strategy is targeted specifically at a young, tech-savvy audience. They use social media to stay on top of trends and to engage their customers, working with online influencers, such as Zoella, and promoting their products across a range of social channels.
New Look, on the other hand, needs to step up their social media game if they want to attract younger consumers. With 335K Twitter followers (117K less than Boohoo), they must design tailored marketing strategies to match the interests of target consumer segments. Only by appealing to younger consumers will New Look break out of their ‘cost-conscious’ niche and weather the economic storm.
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