By Isabelle Simpson UFP 401 Word Count: 2111
CONTENTS INTRODUCTION - PAGE 1
PEST ANALYSIS - PAGES 2-5 PRODUCT - PAGE 6 PRICE, PLACE, PROMOTION - PAGE 7 PROCESS, PEOPLE, PHYSICAL EVIDENCE - PAGE 8 CONCLUSION - PAGE 9 REFERENCES - PAGE 10
INTRODUCTION
(Screenshots from Nasty Gal’s Instagram, 2019)
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Named “the fastest growing retailer” (BOF), Nasty Gal built their brand with killer vintage and soon after moved into creating a clothing range. Founded by Sophia Amoruso in 2006 inside her San Francisco apartment, she began trading on eBay but then changed to being an independent e-tailer in 2008. After being bought for $20 million by Boohoo in 2017, the retailer has gone from strength to strength. Edgy and unique clothing pieces are shown throughout the website, and this along with affordable pricing draws in their core customer. Nasty Gal is an exclusively online seller, competing against other similar brands such as Pretty Little Thing, I Saw It First, Missguided and ASOS. (Nasty Gal, 2019)
POLITICAL
Brexit will cause serious complications within the fashion industry; we are already starting to see issues being caused by Brexit and this will only get worse over time. EU workers moving over to the UK fell by 95% in 2018 (Vogue Business, 2019), therefor creating huge problems in the UK fashion industry that employs 10,000 EU staff members. Contributing around £32.3 billion to the country’s GDP (Highsnobiety, 2019), the UK fashion industry is one of the largest in the country and can not afford to be damaged by Brexit. Importing £10 billion worth of clothes and accessories from Europe every year, this would become a much more expensive import after the EU add their 11.5% tax (Vogue Business, 2019). The Boohoo group might be less impacted by Brexit than other retailers as it is much less reliant on the UK economy than other fast fashion brands. As well as this they have a big US market, so the sales from this will help to cover costs if the UK market isn’t doing well.
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Sustainability tax will try and reduce the £140 million worth of clothing that ends up in landfill every year in the UK (Real Business, 2019). The tax will add 1p onto each item of clothing made, and this tax will go towards better collections for unwanted clothing and recycling these clothes. For a fast fashion brand like Nasty Gal and Boohoo this is a really important tax to be introduced. The brands both have over a thousand different garments, shoes and accessories for sale.
(Both Nasty Gal, 2019)
ECONOMIC
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(Canada Goose, 2019)
Foreign exchange rate is a worry for many fashion brands, luxury brands in particular. Most brands do not produce their products in the same country that they are sold and luxury brands will be known for creating their products in a certain place (American express, 2019). For example Swiss watches need to be produced in Sweden, and Canada Goose in Canada. However many high street brands can produce their products in any country, so if the foreign exchange rates change they could move production into a country where it is cheaper, however these luxury brands can not. For Nasty Gal this is not a huge problem, as their clothing can be produced anywhere as long as the quality is good enough. So if the exchange rates changed they would be able to just move the production to a new factory in a different country. (Mulberry, 2019)
Consumer disposable income is a factor affecting customer purchases and overall sales. Consumers with higher payed jobs will naturally have a higher amount of disposable income, however the group of people with the highest percentage of disposable income are young adults living with their parents. Young adults aged 16 to 25 are the group with the highest percentage of disposable income due to them not paying rent or bills, this means that 100% of their wages are disposable income (Office for national statistics, 2018). Nasty Gal will benefit from this as their core customer is young adults, and these are the people who will be spending the most amount of money on the site, helping boost sales. As well as this it will help to show them which pieces customers prefer, therefor staying up to date with the latest trends. (Rolex, 2019)
SOCIAL
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A huge demographic trend at the moment in fashion is social media marketing and creating clothing ranges in collaboration with influencers or celebrities. Examples of this are Molly Mae X PLT and Sophia and Cinzia X In the style. Using influencers to market products attracts the exact audience that the brand wants to sell to. Sales through influencers are usually done on Instagram or YouTube, and customers can use swipe up links or discount codes to link the influencers to brands. Nasty Gal as a brand have adopted this trend early and have been using influencers in marketing; this has boosted their sales massively and created a huge customer base for the brand. Emma Louise Connolly has done two collaboration with Nasty Gal, the first sold out within 24 hours, and her second was just as popular. Creating collections like this brings in new customers too as the excitement around the collections is so huge.
(Catwalk Club, 2019)
Rented fashion is becoming widely popular with high end garments and accessories. As consumers are becoming more aware of sustainability and wanting to do their bit for climate change, less people are buying goods and beginning to rent instead. Companies such as ‘Catwalk Club’ rent out designer handbags for a fraction of the selling price, from brands such as Balenciaga, Chanel and Dior. For Nasty Gal this might not work as well, as the garments that they sell are so cheap and it wouldn’t be worthwhile for customers to rent the garments out. However if they don’t start doing something different and thinking about sustainability consumers will probably start choosing to shop elsewhere with brands that do consider this a problem.
(Nasty Gal, 2019)
TECHNOLOGY
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(Authors own screenshot, 2019)
(Factor Tech, 2019)
Mobile payments have become hugely popular over the past few years, and phone companies have all created their own mobile payment methods. Apple pay, Google pay and Samsung pay are all types of NFC payment and are used in the same way that contactless is. Using these methods of payment through shopping apps is becoming more popular too, as it is so easy and makes the checkout much quicker, just using your fingerprint or password to pay instead of having to put all your details into a website. Nasty Gal do not currently accept mobile payments, they use card or pay pal. Expanding to use this method too would be beneficial for them as it would make check outs much easier and quicker. With technology growing all of the time, the possibilities for use within the fashion industry are endless. Online shopping has risen dramatically over the past few years, in 2018 90% of adults in the UK were internet users and 99% of 16-35 year olds were too. This shows us that the internet is a huge market and will most likely attract the largest audience. As Nasty Gal is already an exclusive online retailer, they are selling in the most populated market in the world. To keep their brand relevant and exciting they need to ensure that their website is kept up to date, and showing fashion following the latest trends. Their prices are very competitive already and this will be a huge help if other retailers begin to use online retailing.
(Mastercard, 2019)
(Dieboldnixdorf Blog, 2018)
PRODUCT
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Nasty Gal is famous for their dresses and graphic t-shirts, as well as their ‘grungy and badass’ style. These are the two main products ranges that they promote, and one of their main competitors is Missguided, who sell very similar products and are also an online store. To stand away from Missguided, Nasty Gal keep their prices low, and use their products to promote online through influencers and celebrities. Doing product collaborations with celebrities such as Emma Connolly also creates a lot of interest around the brand, as she will bring a different style and colour palette to her collection with Nasty Gal.
PRICE (Nasty Gal, 2019)
Nasty Gal’s prices are sometimes unpredictable, for each item they have a regular selling price however most of the time they will have a promotion or sale, cutting prices by at least 20%. This shows that the regular selling price is too high and they know customers will not buy if they do not have a sale on. The brand is well known for this and this pricing strategy is value based pricing, pricing based on how much the customer believes the product is worth. All of Nasty Gal’s competitors also have low prices as they are high street level online brands, however Nasty Gal is the brand that use the most promotion and sales.
To promote their brand and products, Nasty Gal often uses social media and influencers to do this. Influencers such as @NaomiGenes and @HattieBourn are payed by the brand to show off their favourite pieces, and do a weekly wish list. They are also sent products to wear and show in their Instagram pictures. As well as this Nasty Gal nearly always has their products on special offer, normally 30-70% off everything. Telling customers about promotions using this method shows them products at the same time, and using swipe up links makes purchasing products very easy and quick for customers to buy.
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PLACE
Nasty Gal is an exclusive online retailer, using omni channel retailing so that customers can shop wherever and whenever. This gives them an advantage over stores that are exclusively brick and mortar stores, as they can reach a much larger customer base. On their website the country options are UK, USA, Australia and Ireland and these are the four countries that Nasty Gal trades in. You can shop any of these websites online or on the Nasty Gal app. Distribution is done through Hermes or DPD and these are very reliable services, so parcels are always on time.
(Screenshots from Naomi Genes Instagram, 2019)
PROMOTION
(Screenshot from Nasty Gal website, 2019)
PEOPLE
As Nasty Gal is an online company, their staff will be in warehouses to pack the orders, and in offices to design garments and run the website. Their website is always running smoothly so they have got a very good team for IT, as well as this their products always come very well packaged, and never damaged. If problems are identified with Nasty Gal products or orders, you can speak to someone online through their website using Facebook, Twitter, Email or Whatsapp. These methods of communication are all very easy to use and also have quick reply times. (Nasty Gal, 2019)
(Nasty Gal, 2019)
PROCESS
Being a customer at Nasty Gal, the website is very easy to navigate and each clothing item or group of items is clearly set out on the website. As well as this their discounts and new collections are always the first thing seen when you open the website, and this shows off their newest clothing and makes customers want to see what’s new. The different sections on the website make it very easy to navigate, and once you have chosen a category such as ‘dresses’ you can then filter down the dresses into colour, size and style. The only problem on the website is that they have so many items there is a lot to look through to find what you are looking to purchase. (Nasty Gal, 2019)
PHYSICAL EVIDENCE As Nasty Gal do not have physical stores, their website needs to do the job of a traditional store and website. Using the search functions and filters on the clothing section make finding specific products online easier, however you can not try on products as they are exclusively online. To help with this they do have an online sizing guide, telling customers which sizes equate to Small, Medium and Large as well as what measurements these are. A fit assistant would be useful for the website, where you could input your own sizes and be recommended which size will be the best.
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CONCLUSION
(Nasty Gal, 2019)
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(Nasty Gal, 2019)
Nasty Gal are one of the best selling online retailers currently, and their use of social media marketing is a huge factor in this. Customers purchasing through swipe up links and using the discounts provided by the brand is hugely helping their sales. Using their unique style and edgy clothing they attract a slightly different audience to other mainstream online retailers, and this gives them a competitive advantage being one of the more interesting brands. Next steps for Nasty Gal should be improving the website, and adding a fit assistant, as well as creating another collaboration with a celebrity or influencer. As well as this they could try a pop up shop inside a larger store, for example Missguided did one inside Selfridges and Nasty Gal could try something like this in a major city. If successful they should expand into a brick and mortar store which would hopefully boost sales even more, as customers can get a full instore experience and are able to try on garments before buying.
(Nasty Gal, 2019)
REFERENCES
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BOF page, Sophia Amoruso 2019a. [viewed 25th November 2019]. Available from: https://www.businessoffashion.com/ community/people/sophia-amoruso?_instrument=0 Disposable income 2018. [viewed 3rd December 2019]. Available from: https://www.ons.gov.uk/aboutus/transparencyandgovernance/freedomofinformationfoi/disposableincomebyagegroup Impact of fluctuating exchange rates on fashion 2019b. [viewed 3rd November 2019]. Available from: https://www.americanexpress.com/us/foreign-exchange/articles/impact-of-foreign-exchange-rates-on-fashion-industry/ Internet users UK 2019c. [viewed 28th November 2019]. Available from: https://www.ons.gov.uk/businessindustryandtrade/itandinternetindustry/bulletins/internetusers/2018 mobile payments 2019d. [viewed 1st December 2019]. Available from: https://www.mobiletransaction.org/different-types-of-mobile-payments/#NFC_payments Nasty Gal web page 2019e. [viewed 2nd December 2019]. Available from: https://www.nastygal.com/gb/ POSNER, H., 2015. Marketing fashion : strategy, branding and promotion. 2nd ed. London: Laurence King Publishing sustainability tax on fashion 2019f. [viewed 27th November 2019]. Available from: https://realbusiness.co.uk/uk-clothing-retailers-producers-sustainability/ Vogue business how will Brexit affect fashion 2019g. [viewed 28th November 2019]. Available from: https://www.vogue.co.uk/article/how-brexit-will-affect-fashion Vogue business impact of Brexit on fashion 2019h. [viewed 29th November 2019]. Available from: https://www.voguebusiness. com/fashion/impact-brexit-fashion-textile-industry-no-deal