eCommerce success: Shein (2)
Laia Ordoñez
24/06/2021
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The best example of real time retail is analyzed. Let´s continue with the story of Shein, how it has become a success story and the doubts it raises.
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In the previous post of this series we discussed at length how the idea of Shein came about, we talked about Chris Xu (its founder) and how it evolved from the concept of She Inside scaling and improving its business model.In the article you are about to read, we are going to focus on what Shein has become, its eCommerce, its marketing strategy and its online reputation, along with some other "unclear" aspects but that are also part of its case study.Let's get to it, it is very interesting.
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#1 – From She Inside to Shein
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It was 2015, business was booming, and yet someone decided to do a complete rebranding of the brand. As you might imagine, the decision to change the branding is never a whimsical decision (or it should not be).It was justified on Shein's part as a way to better align with the digital channel. A shorter name, simple to remember and easy to type in the browser bar.The logo changed to a minimalist version, stick typography and keeping the color palette in black and white (something very related to the fashion industry).
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INSIGHT: What is the real reason for this change? It is difficult to know for sure because the official version is the one mentioned above. But, with an established brand, to make a transformation that only affects the image - the eCommerce remained exactly the same - it is always possible to think of a reputation problem. We will go into this in more detail later.
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#2 – Shein´s online store
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Promotional pressure
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Let's remember that Shein is an online native and 100% digital business: there is no retail channel for this company. This means that all its efforts are focused on boosting its eCommerce.There are several things that catch your attention when visiting this website for the first time.
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It is really shocking (not to say overwhelming) the effort they make to get that first sale. Let's look at the example of the website at any given moment with this screenshot.
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How many promotions and persuasive elements can you see? At a glance we see:For purchases over 40€ an item at 3,99€ (with its corresponding countdown to stimulate urgency).
- Free shipping for new customers.
- 3 € additional savings on payment via PayPal.
- 3€ discount on first order.
- Promotional sales banner.
- Pop up with progressive discounts from 15% to 20% depending on the amount of the ticket.
- Discounts on a ribbon under the banner from 10% to 20% with its corresponding code or coupon.
All this is above the scroll line, which ensures that the user always sees it (scroll that, on desktop, is blocked until you close the pop up of the offers).As if all this were not enough, when scrolling down, an additional banner appears with an additional 3€ discount for subscribing to their newsletter on the side. -
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INSIGHT: If your customer is highly price-driven, the best way to remove the brakes and motivate them is to use promotions like these. Shein puts its cards on the table.
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Product sheets
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In reality, they are not particularly different from those we can find anywhere in its category.They are quite complete in terms of technical descriptions, sizes ... but what really stands out is in two major aspects: the social proof, where comments and user-generated photos abound, and the loyalty program with Shein points, which are obtained at each purchase and can be redeemed in the store.
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INSIGHT: The formal aspect is not so important, but it must be recognized that they have done a good job putting in value their main resources, which are the power of the community that supports them and the "western" approach of the products (this is reflected in the photographs they use).
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Catalogue
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Little is left of that online wedding dress store. In its catalogue there is an assortment that does not stop growing in terms of garments of all kinds and for all occasions, accessories, cosmetics, household products and pets.Predominantly, it is aimed to women, but we will also find products for men and children.It has really started from a very specific niche to gradually make its offer more horizontal and more complex than that of its competitors.
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INSIGHT: It is very interesting to see how they play with seasonality in something that, for many eCommerce, is static: the menu.We can find complex search intentions that are out of the classics: pants, party shoes, short-sleeved shirts... It shows us products organized by type of cut, length or complete sets and, of course, by trends.
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#3 – Social first
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Shein is created with a focus on the more social side of fashion. Somehow, they have chosen to turn the usual model in which brands sell what is in trend to try to be themselves the ones who drive what is going to be sold.To do this, they put a lot of emphasis on the role of influencers, to whom they reserve a very important space both on their website and on their social networks.Something very classic of this trade and its management of social networks is a format that is practically its own. These are called Shein Hauls, which are basically their own version of unboxings.They have found a very interesting balance in this aspect, since we can find both Hauls starring influencers and others made by anonymous people.On any platform that allows the use of video (YouTube, TikTok, Facebook, Instagram...) and with its own hashtag #SheinHaul or derivated, you have hundreds of examples.
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INSIGHT: This clever movement involves taking advantage of and motivating large tickets or, at least, multiple purchases. Customers know that quality is not their strong point, but they can buy large lots just like those accounts they follow.
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Real Time Fashion, are you sure?
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Here comes the less positive view of Shein's success story. It seems to be all very nice, but it is not that; we could even say that Shein champions a concept to which it is not exactly faithful: Real Time Fashion.First of all, we set the following question: can it be considered real time when delivery times are long? The trend is very quickly detected, but all that momentum is diluted a bit if the product is received after 15 days, 3 weeks or even a month, as is the case for some European brands.Is this real time fashion or slow fashion?Then there is another foundational aspect of the concept that should be key: sustainability. On paper, manufacturing on demand seems to be more efficient than managing stocks with the risks of having to discard entire inventories and overproduction.But if at the same time we base the business model on the fashion of fast consumption, minimum quality/durability and mass purchasing... we are going against what we are supposed to defend.And let alone if the fact of capturing the trend and producing it in "real time" implies a particularly intensive production rate in factories, with all the pollution that entails....it would be interesting to reflect on all this before praising to the skies the concept on which this business model is based...
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Shein's keys to success
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- Extremely competitive quality-price ratio: Shein's customers do not expect an extraordinary or luxury product. The positioning is obvious: skirts, pants or party dresses at 7€... Who cares if the quality is fair?
- Recurrence: if your average ticket is so low, make sure you have a loyal and very recurrent public. This is one of your most obvious keys to success.
- Trends: the fashion they produce may not be exactly in real time, but no one can doubt their ability to discover and generate trends.
- Promotions: added to rock-bottom prices, they are a guarantee of conversion, loyalty and recurrence.
- App: it is one of the few stores that register more traffic coming from the application for devices than from any other channel (and they are really aggressive in terms of its use and cookie management).
- They have been able to enhance their differential value: price, price and price... they continue to sell more and more even in spite of the public problems in terms of logistics and the many doubts it raises.
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Images | Shein.