Specialist
Senior executive at NA-KD.com (Nakdcom One World AB)
Agenda
- Boozt’s (STO: BOOZT) (CSE: Boozt DL) sales growth outlook, discussing frequency and conversion, customer acquisition, Booztlet.com and AOV trends
- Boozt vs Zalando (ETR: ZAL), including offering differences
- Gross margin pressure and mitigation tactics
- Operating cost analysis, including marketing and fulfilment cost discussion
Questions
1.
What are your market growth expectations for e-commerce in the Nordics over 2022-25? Could you break that down by the key markets within that region?
2.
How are you expecting online sales penetration to trend in the Nordic market? You mentioned online penetration is a key driver. What are current levels and how could they grow?
3.
In terms of market growth, how has the Russia-Ukraine conflict impacted consumption patterns in the Nordics? Where have you seen the biggest impact in terms of consumption pattern shifts?
4.
How does the online segment usually perform in the Nordics during an economic downturn or recession?
5.
You’re expecting the market to grow at roughly 10%. What are the sales growth expectations for Boozt in relation to this? What are the key drivers?
6.
You said Boozt is estimating to outgrow the market and the company’s 2022 guidance is 20-25% net revenue growth. How realistic do you think that figure is?
7.
Which categories do you think are Boozt’s key growth drivers and why?
8.
In which categories do you think Boozt is currently under-penetrated?
9.
How are you expecting home to grow in relation to womenswear? What would be the relative percentage differences?
10.
How is Boozt approaching the home category roll-out? You mentioned the company isn’t breaking into furniture.
11.
What is it about Boozt that allows it to outgrow the market, which you said the company could do? If the market could grow 10% and Boozt is expecting 20-25% in 2022, what leads to that 10-15pp growth rate above the market?
12.
How sustainable do you think it is to continually outgrow the market? How confident are you in Boozt’s ability to continue doing this?
13.
To confirm, if Boozt is expecting 20-25% growth in 2022, what do you think is a normalised growth rate from 2023 or 2024 onwards?
14.
How do brands view Boozt in the Nordics market? Obviously, the brands that sell through the company’s website or sell their inventory to it are a key growth driver. What are the comparative strengths and weaknesses from a brand’s perspective?
15.
What do you think is the risk that brands limit supply to a wholesale partner such as Boozt and prioritise the D2C channel? We’re hearing about significant supply chain challenges in the sector today.
16.
What extended lead times are we working with in the sector? You mentioned that as a key challenge.
17.
What price increases are brands passing on to wholesale partners?
18.
How do brands compare Boozt and Zalando, which are two beasts in the Nordic market?
19.
How do customers view Zalando vs Boozt?
20.
Is it the same customer – the Zalando customer and the Boozt customer – in the Nordic market?
21.
You said one of Boozt’s key advantages is the curated approach. In contrast, Zalando is focusing on its marketplace offering. What options are there for Boozt to roll out a similar inventory-light offering?
22.
Do you think Boozt can be a major player without a marketplace offering, so a major competitor to Zalando?
23.
How much market share do you expect Boozt to gain in the Nordic market over the next three years or so, in the context of our discussion?
24.
What is your outlook for AOVs at the Boozt brand? We’ve spoken about the price increases that the company might be receiving from brands and the ability to pass those on to the market.
25.
Why do you think Boozt prides itself on having a much higher AOV than peers? How sustainable do you think this difference is?
26.
What’s your outlook for Boozt’s gross margins in 2022? We’ve spoken about supply chain challenges, pricing and low-single-digit increases. To contextualise, the company declined by around 100bps, so 1%, to 39% in Q1 2022.
27.
What’s your outlook for fulfilment costs for 2022? There have been challenges around fulfilment costs, which crept up to around 12.5% in Q1 2022, rising steadily since Q3 2021.
28.
What courier or last-mile delivery inflation are you seeing in the market YoY?
29.
What do you think is a sustainable medium-term fulfilment ratio from a cost perspective?
30.
How much more expensive is marketing becoming in the Nordic region, given we’re seeing a slight uptick in marketing costs?
31.
What do you think is a sustainable run rate in terms of marketing spend or the marketing cost ratio for a player such as Boozt?
32.
How much pressure is there on operating margins in 2022? We’ve spoken a lot about gross margins and fulfilment and marketing costs.
