Specialist
Divisional leader at Missguided Ltd
Agenda
- Will the easing lockdown materially impede UK online fast fashion growth?
- Customer consumption patterns, highlighting category trends, returns dynamics, average basket sizes and the importance of sustainability
- Competitive landscape – Asos (LON: ASC) vs Boohoo’s (LON: BOO) discounting strategy and the threat of Shein and Fashion Nova
- Marketing spend expectations and potential profitability impacts amid volatile freight costs
Questions
1.
How should we compare the penetration of online fast fashion retail in 2021 to 2019? What is the new base for brands, given strong sales and growth in 2020?
2.
You mentioned that customer acquisition has led to strong customer retention. What does this mean for online fast fashion penetration vs the total UK market? Is there any sense of the new normal?
3.
How did online’s growth impact sales for June and July 2021? You mentioned that online continues to be buoyant, but brands such as Asos reported a slowdown in top-line sales towards the back end of June. How have sales trended in June and July 2021 vs the same period in 2020?
4.
How have sales trended since July 2021? What were the early indicators in August?
5.
What key demand drivers are online fast fashion retailers picking up on? You highlighted restrictions easing in the UK.
6.
Your comments suggest that there’s no imminent risk of a demand slowdown. Do you identify any slowdown risk for the remainder of 2021?
7.
What might be a more normalised growth rate for the UK fast fashion market once we get through these unusual 12-24 months or when restrictions are fully lifted?
8.
What do you think will be the new normal category mix? We’ve discussed the lockdown winners over the last 18 months, and you alluded to casual wear being down in 2021 on the basis that it was so strong in 2020.
9.
Which brands would you highlight as winners, based on the category mix you outlined?
10.
How do you assess Boohoo? The company was able to pivot very quickly into casual wear in 2020, given the agility of its supply chain.
11.
How might the change in category mix impact gross margins? You mentioned woven, dresses and footwear being over-indexed. How does that impact gross margins vs 2020, when casual wear was the key winner?
12.
Could you outline the rough return levels in 2020 vs 2021, using 2019 as a normalised base?
13.
How much higher could returns rates be in 2021 vs 2019?
14.
How much higher could returns rates be for the 2021 autumn/winter period, if 30% is the normal?
15.
You mentioned a 5-10% growth rate on a normalised basis. What might that mean for customer acquisition vs retention? You alluded to potentially less customer acquisition opportunity in the UK.
16.
How saturated do you think customer acquisition is in the UK, considering the market’s maturity pre coronavirus?
17.
What are the frequency trends within the customer cohort that has been acquired during lockdowns?
18.
How material is AOV growth vs 2020 or 2019?
19.
Who is being the most aggressive with discounting – key brands such as Asos and Boohoo or players such as Shein and Fashion Nova?
20.
How responsive are UK customers to strong discounting? I’ve heard there is perhaps a numbness towards discounting given its prevalence over the last few years.
21.
Why do you think Asos is being the least aggressive with its discounting strategy?
22.
What sort of threat does Shein pose to Asos and Boohoo?
23.
Could you give a sense of Shein’s market share?
24.
How do you expect Asos and Boohoo to perform vs the market for the remainder of 2021 and across 2022?
25.
How can fast fashion online retailers navigate the next 3-9 months amid difficult freight and logistics costs?
26.
Can we assume that the contracts being operated were negotiated pre-coronavirus, so only freight orders outside of those contracts are incurring costs?
27.
Online retailers naturally acquired customers as they shifted online due to coronavirus and therefore saved on marketing expense. What investment do you think retailers such as Asos and Boohoo need to make to maintain market share?
28.
How are last-mile delivery costs trending in the UK?
29.
What does the push towards sustainability mean for the online fast fashion customer?
