How BrandAlley is thinking non-digitally

UK-based designer label discount e-tailer BrandAlley, which continues to grow exponentially in the online world, has its eyes on physical space.

No, the company is not making plans to open a raft of stores in keeping with moves by fellow digital-first players such as glasses retailer Warby Parker, beauty platform Glossier or menswear brand Untuckit. Instead, BrandAlley CEO, Rob Feldmann, is targeting major billboard marketing space for the first time in its 11-year history.

Speaking at the recent Retail Connections event in central London, Feldmann said it could be time to shake up the company’s advertising strategy, which until now has been very digital.

“Digital marketing is amazing because if you track it properly you know exactly what your return is on every type of it, but there are limits to how fast you can grow just with digital spend,” he explained.

“We’ve found you can grow very fast with digital only but it gets to a point where it becomes very expensive and you start questioning is the keyword search actually working and is it the best way to spend your money?”

Feldmann noted online marketing is “still very strong” but added the business has reached a stage where older forms of media are “definitely worth trying”. By older, he means billboards and TV, with the former expected to be used in London in the new year.

“Although it’s impossible to measure, I think if you want to be a household brand in the UK you need to do it,” the CEO explained.

“We’re getting to the point, where next year we’re going to start allocating our money across the old school media to see what that does for the business.”

Magic numbers

During a discussion with delegates at the event, Feldmann also revealed he would consider pop-ups to help raise the company’s profile, but he would never sign up to the long leases associated with more permanent brick and mortar retailing.

He also gave an indication into just how rapidly his fashion business is growing, having launched in 2008.

“We’re in a space where we can recruit about 75,000 members a month through digital marketing and get around 15,000 new customers a month,” he said.

He suggested the cost of acquisition for a new customer equates to around £12, but BrandAlley more than makes its money back once a customer shops with the business.

“You’re in a situation where you can keep on spending the digital money and grow very quickly at no risk effectively, even with returns at 20-25%,” he noted, citing figures many traditional retailers and less successful online players can only dream of.

He revealed BrandAlley has spent around £150,000 a month on marketing over the last quarter, which for most businesses would represent minimal spend, but it has led to thousands of new customers. He explained those returns were from “just spending sensibly across Google, social media, affiliates, and refer-a-friend programmes”.

Feldmann said these tactics are expected to help contribute to a circa 40% revenue increase for BrandAlley this year, driving it towards around £70 million in annual net sales.

It remains to be seen just how much those figures might swell off the back of the fresh budget for out-of-home marketing in 2020.