By anyone’s standards the UK fashion and homeware sales site BrandAlley is something of a phenomenon. The membership site, which offers up to 80% discounts on luxury brands is adding 2,500 new members daily and has forecast a c. 40% revenue increase from £46 million to £63 million this year.
BrandAlley CEO Rob Feldmann was more than happy to discuss financials at a recent Retail Connections event in Aldwych, London, explaining that the site’s digital marketing strategy is the star of the BrandAlley show. Over the last three months, the site has spent £150,000 on digital marketing a month, through a mixture of Google Ads, social, affiliates and refer-a-friend.
Growing customer base
Feldmann’s team is also piling on the customers through savvy acquisitions and tactical diversification including a deal to buy competitor Cocosa and its two-million-strong member database last year for £1.5million – a smart move considering Feldmann currently spends £12 to acquire each new customer organically. A similar deal saw BrandAlley increase its offering to 25% homeware following a £600,000 deal to buy Achica.
Feldmann told Retail Connections: “Our customers have an average basket value of £100 with a £30 trading margin and with returns at 20-25% we can still grow at no risk.
“Adding homeware was a great move for us because customers are more likely to shop across both categories and are more likely to return.”
Blistering growth trajectory
Feldmann’s view is that “with a clever digital marketing strategy you can grow quickly at scale”.
But how long can BrandAlley maintain its blistering growth trajectory using a digital-only marketing strategy?
“You can grow fast with digital but it soon gets expensive, so we’re considering physical roadside billboards and TV advertising,” said Feldmann.
He explained that the retailer’s membership model means they have a wealth of customer data that will help them target the most profitable advertising sites.
TV and billboard advertising
For example, 50% of customers live in London and the South East, while a high proportion are working women. This means advertising on the London Underground, for example, makes great sense as well as specific digital TV stations that cater for this demographic.
But what about, dare we say it, BrandAlley developing a physical store presence?
“I can’t see BrandAlley getting tied into long store leases, that’s not what we’re about, but maybe we could see BrandAlley pop-up stores with a three-to-six-month lifespan – that would be a good way to raise brand awareness.”
Buoyed by bargain hunting-Brits watching their spending as Brexit looms, the stats show BrandAlley is onto a winner but, as Feldmann says, it remains to be seen how long the retailer’s digital-only marketing strategy will rake in the customers.
Rob Feldmann took part in a retailer panel discussion – Little earthquakes: Finding opportunity in uncertainty hosted in London by Retail Connections and Fieldworks Marketing