Clients want to know all the time what some good examples of growth hacks are out there for retailers. For those unfamiliar with the topic, growth hackingis a combination of marketing and technology to seriously grow active users or customers in a given amount of time. These methods are, in many cases unique to the business itself, which is why this post will focus on one famous example of a retail eCommerce brand that smashed the typical format to run away with a successful online and offline brand. My own experience with Nasty Gal comes from a keynote during Inbound 15 where Sophia Amoruso spoke about her time with the company and passion behind the brand, along with a few of her tricks along the way.
Nasty Gal was founded out of a desire to bring vintage womenswear to a market which had been overpricing their clothing. Sophia Amoruso, the companies founder and CEO, began with an eBay store and turned it into an international hit. Their clothing is inspiring to the millennials out there sporting this chic, throwback style clothing. The start of this company is not how many would anticipate, though. What’s impressive about Nasty Gal is the company was founded as an eBay store, and after being kicked off in 2008 for promoting her new website, she launched Nasty Gal. On launching the store, Sophia used to actually pick through the lots of clothes donated by Salvation Army, to find vintage pieces. This is far off from where the company is now, but it’s humble beginnings have given them a business model which proved sustainable. The early model for them was to find closeout lots from a manufacturer or left over at retailers, which they could turn around and sell at full price. This again did not happen by chance. Sophia realized early on the distinctive characteristics of her audience, then served those exact products to them. Nasty Gal clothes are as unique as the brand’s audience is, making a healthy fit. Nasty Gal, in the beginning, hired girls in high school “for a few cheeseburgers” to model the clothes. This, more importantly, helped their audience understand the style behind the clothes, giving her a clean edge. With this, by 2011 sales had soared to over $28 million, and by 2012 sales had swelled to $100 million. This is impressive growth in eCommerce standards. How was Sophia able to swell her sales volume by almost 4x over a one year period?
While much of the story from above reflect’s the underlying product, category, and audience to target, the company did not slack on the internal controls, and systems in place to help them achieve such remarkable growth. Even from the beginning with eBay, Sophia tracked the numbers and related them to trends which she would seek out ahead of time. This helped her pick up on the newest trends, and fashions out there for her vertical. With this, she could directly correlate the trends she picked up on with her purchase behavior in the company. This ability to deliver on current and even slightly ahead of time fashion trends helped Sophia keep customers coming back. In the early days (and still now), Sophia uses her model of testing garments on different models to test effectiveness. She would also test the text headline she sold garments under, which revealed instantly the things that would sell and would not sell saying:
“If it sold, I’d instantly go find more things just like it — If it didn’t, I wouldn’t touch it with a ten-foot-pole ever again”
This rapid and repeated testing allowed Nasty Gal to quickly adapt their inventory on hand to reflect the customers wants. This was not so much a technology hack as much as it was a quick reflection of customers changing demand. The technology to enable this, later on, is what ended up being the way to achieve scale with the same style business model. In the case, the numbers were there to prove whether a particular fashion trend was doing better than another, which led to smarter lot purchases, and more sales. The optimized funnel for buying week-to-week fashion trends based entirely on highest converting items allowed an efficient system which she could continually use to convert customers week over week.
With the early days of vintage clothing behind them, Nasty Gal turned to their own collections. This switch in business model brought with it loads of success and several changes. The largest changes of which came from the hiring of original designers Sarah Wilkinson, formerly of ASOS, as vice president of design and Lauren McCalmont as print designer for the line aptly named Weird Science. They debuted the line at NYC fashion show in 2012, which helped catapult their own unique brand and style of womenswear. Since the launch of their own line, Nasty Gal has gone on to launch other lines including accessories, swimwear, and lingerie.
With the company keeping their original highly valuable millennial audience, the following of Nasty Gal’s social media pages gave them a large scale boost. Since the beginning, Sophia had utilized a service to pay for friends way back during the height of MySpace saying: “I had friend-adding software, which was totally against MySpace’s policy. I would look up, say, an ‘it girl’s’ friends and add only girls between certain ages in certain cities… Soon I had tens of thousands of friends on MySpace, which I used to drive people to the eBay store. I did a MySpace bulletin and blog post for every single auction that went up on Nasty gal Vintage. I didn’t know it at the time, but what I was doing here included two keys to running a successful business: knowing your customer and knowing how to get free marketing.”
This success early on with social media led to continued long term success with more and more followers jumping on board with her brand. Nasty Gals ability to communicate with their audience on social media is what gave them the sustained sales, an early investor claiming they have mastered “translating likes into sales.” This sustained social media phenomena, helped Nasty Gal achieve 60% margins on the original lines they sold. A relative point about their sales can be seen in the 10 fold growth in their Facebook followers, reaching nearly 831,055 in 2013. For Nasty Gal, the test they were running in the early days for simple 60 character eBay titles with an 80x80 image, was translated into the same testing environment via popular social media channels. The idea here is to continually connect with customers, and understand their wants beyond where you may understand them now. This, combined with the scrappy startup attitude and even questionable techniques to drive customers (like friend-adding software) helped Nasty Gal pull off growth like traditional retailers have not.
As you can already tell, Nasty Gal has, from the beginning, made a push at keeping their product unique, catering to their own unique audience. This ability to deliver on a consistent style to their following allows them a very clear understanding for what will attract customers. As Sophia describes, her audience “Is in her late teens or early-mid twenties and super-body confident. She knows how to dress for her shape and isn’t afraid of wearing makeup and short skirts and being sexy. She’s into fashion but her taste doesn’t apply to what she wears: it applies to food, interior design, and travel. She wants to have awesome experiences and be the best-dressed girl around — without spending an arm and a leg.”
A definite ideal customer profile and clear social media strategy helped Nasty Gal’s online metrics. In June of 2012, 25% of Nasty Gal’s 250,000 customers were visiting the site at least once a day and spending at least seven minutes there, while the most engaged 10% of users were visiting more than 100 times per month. Half of the site’s sales were coming from 20% of customers (see Pareto’s law on the 20/80 rule).
With most of their channels working out as is, the next avenue for Nasty Gal was to pursue the physical brick and mortar route. Since they already had such an active and engaged online audience, Sophia explains “our customers really want to engage with us and our product in real-life.” The first brick and mortar store opened in Las Angeles on November 24, 2014, followed by a second store in Santa Monica on March 27, 2015. Their stores (as pictured below) offer a unique “catwalk” style feel to them. The stores feature their own designs as well as original pieces from a brand like Jeffrey Campbell, For Love of Lemons, Cameo, and vintage pieces from Chanel, Louis Vuitton, and Moschino. Each of the styles and designers they bring in, match perfectly with their ideal custom profile, keeping a consistent feel to the stores themselves. It’s important for them because their customers have come to expect such a distinct and coveted style. Combine this exclusive product feel with the store’s unique style and it really gives off a meaningful connection with the brand.
If you can relate, or would like to relate with this experience, please reach out to myself or a email@example.com who can help relate more specifically to your business. Our aim is to provide a strong innovation hub to move beyond “retail” to gain more customers.
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