Australian retailers can learn valuable lessons from US etailer Lulus, Azurium's James Stewart writes.

The mother-daughter duo behind US fashion retailer, Lulus, are paving the way for pure-play online apparel retailers.

The pair moved online in 2008, selling their own brand of women’s fashion and accessories, experiencing major growth off the back of a thoughtfully executed digital strategy. Fast forward to 2018 and the retailer has recently raised US$120m in venture funding to expand their product line and take the brand global (l2 Inc, 2018).

So, in a tough retail environment which has challenged both new and established retailers, how has Lulus become a dominate figure in the online space?

Go Digital

YouTube, Pinterest and Instagram have been the platforms of choice for Lulus, aimed squarely at their prime demographic of Millennials. Through strategic use of online ambassadors and sponsored content, Lulus has shifted from bricks and mortar stores to the online market, with the brand’s success largely underpinned by a powerful social media presence.   

At the heart of Lulu’s reach is social media application Instagram, with over 70% of its user base in 2017 aged under 35 (Statista, 2018). In addition to promotion of sponsored content from other Instagram accounts, the brand targets millennials through the latest unique content, product drops, sales and trends to its 1.4m followers.

Instagram’s ‘shoppable post’ feature, rolled out world-wide in March 2018, has created an immersive experience, allowing users to scroll, view product information and purchase items in a post all within a few clicks. It will come as no surprise that Lulus was a pioneer of the feature and played a key role in initial testing phases (Instagram Business, 2018).

Importantly, the seamless viewing-to-shopping experience provides instant gratification to consumers and instant data to retailers. Lulus has successfully leveraged its consumer data to enhance purchasing decisions and inventory management to reduce and eliminate costs.

Instagram not only increases sales conversions, but also provides rapid insights for brands to understand their consumer.

Content is king

Lulus has successfully fostered their loyal customer base through creating engaging content that customers can then interact with by commenting, sharing and following links to other platforms. Creating and posting eye-catching content not only communicates upcoming trends and product information but creates the opportunity for customers to establish a community around the brand. It is this sense of community that enhances customer loyalty and continues to be an integral strategy of global retail heavyweights including Nike, Lululemon and Sephora.

Spend time on social

Social media offers a powerful platform for retailers to engage with their customers and facilitate and influence purchasing. In the case of Lulus, Instagram can create significant reach within its core market, however several other platforms exist that retailers should seek to leverage including Facebook, Twitter and Snapchat.

Brands can also continue to encourage customer loyalty through monitoring online comments, messages and replying promptly (both the good and bad!). Not only will customers sense that their feed-back is important, but it ultimately increases and retains brand awareness.  

Create a seamless digital marketing experience

Successfully using social media marketing grants customers the ability to engage with the brand and product, however it’s important that brands create a fully integrated online experience and utilise an omni-channel digital marketing approach.

While Instagram’s ability to attract thousands of followers and ‘shoppable posts’ is an enticing feature, it’s important to use a range of marketing channels to create a seamless experience across devices and platforms. Consumers want the ability to move from their morning emails, research the product in the online store and make a final in-app purchase on their device.

Lulus embodies the elements of successful pure-play online retailing. The development of the brands digital strategy has carefully considered its core consumer and been successfully executed to meet their changing needs. It is through the retailers social media presence and online community that it gains meaningful data, insights and feedback to make fast, informed business decisions that make it a leader in the pure-play game.

Azurium is a specialist management consulting and advisory firm owned by Ferrier Hodgson.

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