New Look is one of the UK’s leading fast-fashion retailers with more than 400 physical retail stores in 66 countries across the world and a robust eCommerce presence. Yet the story behind this phenomenal retailer is far from a business fairytale. After a decade of shrinking revenue (from £1.4B in 2012 to £1.3B in 2019), the company has struggled to turn profitable in recent years. It is a fascinating, down-to-earth, retail case study with many lessons to take away for any industry professional.
In this New Look case study, we’ll dive deep into the New Look’s marketing strategy, its channel mix, and the eCommerce strategy it used to achieve its current market status. The case study will shed insights on New Look’s tactics and concepts so that you can apply them in your growing retail business.
A brief history of New Look Retailers Limited
Tom Singh founded New Look in 1969 in Taunton, Somerset. New Look has since expanded globally, operating 489 stores in the UK and a few dozen internationally with a staff of over 18,000. In 2015, the South African investor, Brait, acquired the retailer for a majority stake of 90% while the founding Singh family and management interests retained the remaining 10%.
Singh was among the first to develop the “Fast Fashion” retail strategy concept, which propelled New Look into one of the country’s leading retail chains. As he told Financial Times in the ’60s, ‘The idea remains to offer loads of choices, continually changing the merchandise so that the customers keep coming back.’ New Look has a reputation for being on the cheaper end of the high street as they produce low-cost goods that are mass-marketed, redefining fast fashion as they upload over 800 new products every week.
New Look: The 141 awards and the road to the hall of fashion fame
With over half a century’s development, the retail chain has rapidly expanded worldwide, holding ground in the value-priced and discount fashion market. In total, the fashion retailer has won 141 awards throughout its history while becoming the No 1 spot for overall womenswear market share in the 18-34 age range. Today, based on Yougov, an Internet-based market research and data analytics firm, it’s the 22nd most popular fashion and clothing brand and the 27th most famous.
New Look’s recent financial problems and challenges
During the past decade, under the pressure of growing international competition, the value-led fashion retailer has seen its turnover shrinking by nearly 10% as it struggles to focus on turning profitable.
The retailer has been struggling after a Company Voluntary Arrangement (CVA) in 2018, which forced the closure of several stores, revamping its product proposition and aligning online and in-store progress to restore its broader appeal and value credentials.
Rather than pursuing a “young and edgy” customer base, the company has overhauled its brand strategy to broaden its product appeal. It intensified its multichannel marketing capabilities, including its click-and-collect service, to contend with eCommerce pure-play rival Asos and global fast fashion giants like Zara.
New Look’s eCommerce site ships to 66 countries worldwide and generates over a fifth of its total sales. The company has more than 5 million social media followers across Facebook, Instagram, and Twitter and relies heavily on its social media presence for marketing.
However, with the recent pandemic adversely affecting the world economy, the company announced that it would delay rents and supplier payments indefinitely to protect their cash flows.
New Look’s price for low-cost apparels
New Look has been outsourcing to textile hotspots like Bangladesh to provide super-cheap, trendy clothing while keeping the labor costs low. Although never officially confirmed, rumors had it that New Look was among the fashion retailers’ list employing garment workers who were among the 1,134 who lost their lives during the tragic building collapse in 2013.
The company since then has tried to relocate its production to the UK (Leicester). Yet, a new labor scandal arose as Knitwear, the supplier New Look hired, was proved subcontracting work to another factory and paying the staff a meager 3.50/hour. Soon enough, New Look has dropped the partnership with the factory.
These recent incidents have negatively impacted the retailers’ brand as some customers choose to alienate from the brand for more sustainable sourcing options.
The marketing strategy that propelled New Look‘s growth
Despite its turbulent performance in the last decade, New Look expanded to more than 1,000 physical stores worldwide in its prime. Furthermore, their focus on online sales and eCommerce has significantly helped the retailer to improve its numbers. Let’s see the key marketing strategies that helped them survive.
Key Strategy #1: Drastic changes across the organization to overcome the tide
The challenges that New Looks faced the last few years are numerous. Although these problems are far from solved, the company’s management took some bold decisions that helped the fashion giant survive, and perhaps improve, so far.
New Look has taken various step in efforts to turnaround the business, including:
- Restructuring credits via Company Voluntary Adjustments (CVA)
- Withdrawing from non-profitable markets
- Cutting down its product range by 25%
- Building a stronger eCommerce presence
- Gradually reducing the physical assets of the company
All these steps contributed to cut costs, making the retailer more agile in marketing new products and improving its financials. The most important of all was its pivot on strategic focus: from chasing big sales volume to focusing on profitability —more on this concept in the next section.
Key #2: Aligning online and offline customer experience
New Look’s eCommerce sales make up about 20% of total turnover, with another 10% coming from the brand’s mobile app. These numbers are remarkable for a traditionally physical retailer, and therefore a testament to the company’s above-average execution skills.
But this didn’t happen overnight. New Look has been building on its eCommerce channel since 2007. It continuously invests in creating a seamless omnichannel experience while utilizing its physical store locations as a core ingredient of their customer journey. About 41% of the online orders were picked up from one of its stores, and 64% of returns were also “absorbed” to its physical locations, minimizing the shipping and handling costs for the company.
The decision to focus on digitalization has allowed the fast-fashion retailer to improve its profitability and reduced costs by £80m annually.
Key Strategy #3: Focused Omnichannel Marketing Strategy
New Look’s digital marketing strategy revolves around core three pillars: Social Media Marketing, Search Engine Optimization (SEO), and Direct Channel, derived from brand-loyal customers.
Paid advertising-wise, they have chosen to invest in bidding for branded keywords rather than competing on budget consuming non-branded Google Ads since it is a common trap in the fashion industry.
At the same time, New Look enjoys good organic performance, with more than 70,000 keywords ranking among the top three positions on Google.
Key Strategy #4: Strong Social Media Strategy focused on Customer Persona
Although social media as a channel seems to only contribute to overall traffic by ~3%, it drives significant engagements and revenue for New Look, as it does for every fashion brand that knows how to use them.
New Look’s average engagement across ten posts is ~268,000 likes and 2721 comments. Their mix consists of daily stories, organic posts, sponsored collaboration with influencers, and frequent giveaways to keep the algorithm and fans’ attention warm.
What is the secret sauce, though? User-generated content, of course! New Look included a call-to-action on their company’s bio on Instagram, provoking fans to create content using the branded hashtag #ThisIsNewLook. Does it work? Yeap, since the hashtag has more than 110,000 posts so far!
How effective is it? Well, New Look maintains the most admiration with Millennials compared to other age groups with over 43% favorable opinion. For their female followers, it boasts a 68% positive rating.
A recent report shows that Millennials and Gen Xers are the biggest online shoppers, with 67% of millennials and 56% of Gen Xers preferring to shop online versus in brick-and-mortar stores.
Furthermore, investing in social media and executing well creates another form of brand equity: customer loyalty. This is evident in the monthly searches for the New Look brand, which has surpassed the 2 million searches every month in the UK.
Key Strategy #5: Expansion through Partnerships
Apart from changing its traditional strategy, New Look has also tried partnering with major eCommerce platforms and marketplaces in expanding its brand presence and sales. As a result, the company’s products became available to platforms like eBay & Next, converting these potentially competitive platforms to opportunities to reach new audiences and customers.
Analyzing New Look’s eCommerce website
New Look started its eCommerce journey way earlier than its competitors in 2007, reflecting its commitment to offering value and convenience to the global customer base.
We’ve analyzed various elements of New Look’s eCommerce site to highlight the aspects that worked well for the brand and the improvements that may further strengthen its conversion outcomes.
A. New Look’s Home Page
What we liked:
• Easy to navigate
Customers demand easy navigation and fast loading speed for apparel e-shop, which usually holds numerous products and loaded visuals. New Look’s homepage offers an attractive yet easy to browse convenience-oriented online shopping experience with clear category links and structure.
Customers can easily find the exact product they’re looking for with several navigation options like category menus and search bar. The first level is organized by gender and broad localities such as women’s, men’s, girls, home and office, offers, and the inspirational new look daily. The next categories break down further into fashion subcategories like clothing, bags, shoes, accessories, making it easy for visitors to narrow down the category to explore.
• Visually engaging
New Look’s sleek in-store designs are carried through to its website with eye-catching attractions on the main page. Throughout the homepage, shoppers can see the clothing and accessory categories featured within the current season. The webpage is divided into sections, each showcasing a vibrant display of in-fashion and trendy products.
What could have been better
• Limit Instagram integration from the homepage
Remove or limit the Instagram feed showcase to limit the exit points for the visitors. Having Instagram acts as social proofing, which is a crucial factor in the consumer’s purchasing funnel. Yet, the primary goal for the landing page should focus on deepening the browsing experience.
As an alternative, consider positioning Instagram inspirations towards the bottom of the page or removing the link to Instagram feeds to keep visitors on site.
B. New Look’s Category Page
What we liked
• Flexible sorting options
There’s a sorting option on the product category pages that allows customers to sort the products per their interests. Customers can sort on a range of attributes that they value – be it a bestseller, newest, pricing or best matches.
• Effective filtering options
On each product category page, customers can also find a range of filters that help find the right products effortlessly. The site supports filter products on a range of variables like style, fit, size, brand, color, price.
What could have been better
• Read more functionality
A long category description is an effective way to improve SEO. However, the best balance between user experience and SEO uses the “read more” functionality to hide the wordy copies to make the product browsing a bit more polished.
• No pagination
New Look offers such an extensive list of products that makes returns loads of products even after applying the filters. At present, the category page is designed so that the shoppers have to scroll with no limitation of when the page will end. As visitors reach the bottom of the list, they will only find a button to “load next products,” which adds more products to the same page. This approach makes it easier for visitors to lose track of the products they have seen and return to items they found interesting.
An improvement would be to add pagination to the list, so visitors can easily browse a smaller set of products and navigate back to the ones they’ve seen.
C. New Look’s Product Page
What we liked
• Multiple product images
New Look showcases several professional and elegant images that present the product from different angles. In the online marketplace, since there aren’t any sales representatives to directly persuade and clarify things for the customers, e-shops have to rely on product visuals and descriptive text to do all the selling.
• Shop the look
New Look has an attractive way of recommending the related products as it intelligently finds the matching products that go with the look and recommend them in the “shop the look” section. This automatic suggestion can help customers choose the products that will complement the overall fashion statement of an individual.
What could have been better
• Absence of customer reviews
New Look has been around for over half a century, making it a distinguished brand in nearly 60 countries. Providing the opportunity for satisfied customers to leave a product review can significantly increase the conversion rate. Having customer reviews on products’ expectations, quality, delivery, and customer service can be a strong selling point.
D. New Look’s Checkout Process
What we liked
• Click and collect
New Look offers its UK customers the CollectPlus service. In this hybrid eCommerce model, customers can purchase the items online and select to pick up from a nearby store or any centralized collection points around the UK. Once the product arrives at the pick-up point, customers will receive a collection barcode to be displayed at the collection point with a valid ID to collect the order.
• Guest shopping option
New Look allows the shoppers to complete a purchase as a guest. The guest checkout option eliminates the hassle and time of having to create a new account, thereby lowering potential churn during purchase.
• Optimized checkout header
The default navigation menu changes on the checkout page to reduce the distractions that may lead a shopper astray from performing the checkout. Instead, the header shows the brand logo, a secure checkout badge, and customer support options. This minimal header design reinforces the customer’s confidence in finalizing the transaction.
What could have been better
• Limited currency options
The website serves its local United Kingdom customers in British pounds while everyone outside the British territory is given only the option to pay in Euros. This means that the potential benefits of automated localization of language and currency are still untapped.
Interesting eCommerce software that New Look uses
- Hybris: SAP Hybris is an omnichannel and product content management (PCM) suite that provides a complete B2B and B2C commerce solution, which helps customer engagement.
- Responsys: Oracle Responsys allows marketing organizations to manage, personalize, and orchestrate all interactions across all critical channels of engagement. It is one of the most renowned solutions to the industry but lacks some flexibility and omnichannel capabilities.
- As an alternative, ContactPigeon, As an all-in-one omnichannel customer engagement platform, enables brick and mortar retailers to collect and process unified customer data, both in-store and online. It is one of the very few solutions worldwide offering such omnichannel capability via a “plug and play” integration, significantly reducing the implementation time and total investment costs needed to start using the platform.
- ChannelAdvisor: ChannelAdvisor is a comprehensive e-commerce solution, offering digital marketing, first-party retail, drop-ship, direct-to-consumer, and other marketplace services at a single centralized platform.
Tip: If you are interested in more fashion retail case studies take a look at our other in-depth articles:
- Farfetch Case Study: Analyzing The Strategy of the UK Fashion Unicorn
- How ZARA Dominates the Ecommerce Fashion Industry
Impressive New Look stats you may not know
- Almost 18,000 employees across different countries – Statista
- New Look bags Treasurer’s Deals of the Year Award 2015, Drapers Fashion Retail Business of the Year Award 2015, Lorraine High Street Fashion Award 2015, and 100+ awards – NewLook
- Revenue of New Look Retail Group in the United Kingdom in financial year 2018/19 is £1.2 billion – Statista
- Standing at the top no 4, New Look sold 7.3 million ladies’ clothes across Great Britain in 2018 – Statista
- Holds the 10th position in Google UK for fashion retail in 2020 – pi-datametrics
Hot news about New Look Retailer
- Court refuses to appoint examiner to Irish arm of New Look – Read more here
- New Look enters crisis talks with landlords across 500 UK stores – Read more here
- New Look cuts quarterly losses with ‘robust’ performance – Read more here
Retailers must give a “new look” to their marketing strategy
New Look has traditionally put itself as a value for the money high street fashion retailer. However, the brand lost out to even more cost-conscious rivals, and the pandemic dealt more challenges for the retailer who’s already facing a shrinking market and severe liquidity issues.
Despite its efforts to build a strong eCommerce and social presence, New Look has to give a “new look” to its marketing strategy – by adopting more omnichannel and investing in business continuity.
2020 poses difficulties for every retailer, yet the need to continuously research the latest trends and technologies to improve customer experience has never been bigger. Offering a memorable customer journey at a reasonable investment level is the best way to increase customer retention and long term viability.
Which tactic or strategy would you choose for your business going into 2021, and why? (Leave a rating & comment below!)