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boohoo.com plc: Profits soar following successful social media strategy
In the 12 months to February 2017, boohoo.com has been highly successful, with sales soaring and pre-tax profits almost doubling. However, boohoo’s recent financial performance comes in stark contrast to the situation it faced following its IPO in 2014. In the 2014-15 financial year, the company was feeling the effects of unseasonably mild autumn weather and trading disruptions caused by Black Friday, leading to a profit warning being issued in January 2015. While revenue and profit were up for this financial year, these figures were lower than initial expectations. As such, the company focused on its marketing campaign and in particular its social media presence and collaborations with celebrities to improve its fortunes.
boohoo’s recent financial success can largely be attributed to its successful use of social media as a marketing tool. The company uses social media as a means of showcasing its products; an extremely effective tactic when examining its social media presence. As of early May 2017, the company had almost 2.5 million page followers on Facebook, 472,000 followers on Twitter and 2.6 million on Instagram. As such its reach is wide and significant.
On top of its own hefty social media following, boohoo made the shrewd decision to get social media celebrities on board to endorse its products allowing the company to vastly broaden its reach. In October 2015, boohoo formed a design collaboration with Charli XCX, an independent singer-songwriter. At the time she had almost 1.7 million Twitter and Instagram followers, allowing boohoo to piggy back off this and reach a much larger number of consumers. Aside from collaborations, boohoo also hires to celebrities to endorse its products on social media, effectively allowing the company access to a large number of consumers from its target market. Such a strategy is something that the company can roll out internationally and reduce barriers to entry to foreign markets.