Mark Ritson Columnist

Mark is an Associate Professor of Marketing at Melbourne Business School and is recognised as one of the world's leading experts on brand strategy. His clients have included McKinsey, PepsiCo, Donna Karan, Johnson & Johnson, Dom Perignon, Baxter, De Beers, Krug, Ericsson and WD40.

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Is it Boohoo time for local Australian fashion brands?

Published 23 August 2013 07:33, Updated 04 February 2014 00:15

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Is it Boohoo time for local Australian fashion brands?

None of Australia’s local labels present their new lines with a soft Mancunian accent.

By now you’ve probably seen the ads for Boohoo.com – they are everywhere. A couple of young girls model the latest offerings from the online fashion house, co-founder Carol Kane pops up and talks about the latest international fashion trends. Kane’s soft northern English accent and her constant name-dropping of big, international fashion brands like Marc Jacobs and Louis Vuitton, combined with an exclusive focus on online retailing, quickly demarcate Boohoo from Australian fashion rivals like Sportsgirl, Cue and Witchery.

The Boohoo story is an astonishing one. Launched barely seven years ago in Manchester, the e-retailer was created by Kane, who operates as the creative director for the brand, and Mahmud Kamani, who runs the commercial side of the business. Completely ignoring the traditional channel of fixed stores and focusing exclusively on e-tailing has enabled Boohoo to grow at a remarkable rate.

In Britain, Boohoo has already become the most popular online fashion brand. Its daily Google search tally now exceeds Topshop, ASOS and even Burberry. The company is privately held so profit figures are a closely held secret, but senior sources will confirm that revenues are more than doubling year on year and the company recently recruited an additional 50 executives to handle the increasing demand.

The brand has expanded from its UK base to Australia along with New Zealand, Canada and now the United States.

Boohoo’s Mahmud Kamani and Carol Kane Photo: Manchester Evening News

At the heart of the Boohoo success are three things. First, the daily addition of new styles and a rapid “fast fashion” model in which designs progress from a designer’s drawing board to a customer’s wardrobe in four to six weeks. Second, a strong and prevailing emphasis on understanding the target customer and what she is looking for. “Our USP is that we’ve worked in the fashion market in various businesses for all those years and we understand our customer. Whether she was an 18-year-old 20 years ago or she’s 18 now, it’s still the same girl making choices based on lifestyle and budget,” Kane recently explained to the Manchester Evening News.

Third, and perhaps most concerning for our domestic fashion brands, is Boohoo’s international pedigree. In recent months Australian’s fashion retailers have embarked upon major strategic improvements to speed up their design cycles and to spend more time and resources understanding their consumers in a desperate attempt to match their newly arrived global competition. But the one thing they cannot change is their Australian origin and, in fashion terms, that turns out to be an enormous disadvantage in today’s market.

Perceptions are all important

Let me explain with a famous marketing experiment conducted at the California Institute of Technology a few years ago. Volunteers were asked to taste different wines ranging in price from $5 to $90. Unsurprisingly, most tasters preferred the $90 wine and claimed it was the best, even though they had actually tasted it twice – once at the higher price and also as a lower-priced alternative. More remarkable were the results of brain scans that the researchers also conducted as the volunteers tasted the wines. Despite twice trying an identical wine the tasters’ brains, specifically the medial orbitofrontal cortex where pleasure is often experienced, showed more pronounced activity when they thought the wine they were drinking was more expensive.

“The lesson,” according to one of the researchers, Antonio Rengel, “is a very deep one, not only about marketing but about the human experience. This study shows that the expectations that we bring to the experience affect the experience itself.’’

Consumer perceptions really do influence reality. And in fickle, uncertain consumer experiences like rating wine or deciding what is fashionable and what is not, these perceptions become all important.

The perception of Australian fashion brands by most Australian women is currently extremely negative – especially among younger shoppers. The brands are deemed to be behind their European and American peers in terms of trend and desirability. I have no fashion sense so I can’t tell you whether our domestic brands really are less fashion forward or whether this is simply a preconception on the part of shoppers, but it does not matter! Perception is reality, as our wine experiment clearly demonstrates.

Every time Boohoo’s founder speaks in her English accent or name checks a big French fashion brand, the retailer bolsters its reputation and builds demand. And there is nothing, literally nothing, any of our Australian fashion brands can do about it.

Boohoo indeed.

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