DTC Case Study- Shein
Brand Performance Today
According to Harris Brand Platform, “Shein already holds the largest share (28%) of the fast fashion market in the United States”. The Shein fan base is continually and rapidly growing. Shein’s competitive advantage and the reason they are performing so well today is because of their “real-time fashion” and trendy cheap clothes.
Just from 2016 to 2021, Shein’s annual revenue increased 398 percent and continues to grow. Shein’s value has also increased 840 percent in the past two years. In April of 2022, Shein was valued at $100 billion. Shein currently dominates the fast fashion industry beating out major competitors Fashion Nova, Romwe, and ZAFUL.
Shein’s current marketing and social media tactics are low-cost yet extremely successful. The main way Shein promotes their brand is by selecting influencers to post hauls of their outfits and reposting them on Shein social media channels. Shein also reposts hauls micro-influencers post on their social media channels making Shein the most talked about brand on social media.
Shein manages to stay popular by adding 6,000 new styles to their website every day. This is why Shein is able to dominate the fast-fashion industry giving them a competitive advantage among other competitors. Many of Shein’s competitors such as Fashion Nova and ZAFUL are either slowly declining in sales or steadily leveling off in performance. Competitors such as Fashion Nova are only able to add about 1,000 new styles a week which compared to Sheins 6,000 new styles a day is no close comparison. If these competitors want to keep up with Shein they have a lot of work to do.
Brand Persona
Shein’s main target audience are price-driven customers that love to online shop. The brand is popular among high school and college aged girls who like to be up to date on the latest fashion trends. This group does not have the disposable income to spend tons of money on trendy clothes, so they love Shein’s cheap and affordable clothing.
Emma is a freshman in college and has a part-time job she works on the weekends. She loves to stay up on the latest fashion trends, but she does not have much money to do so. Emma came across Shein from one of her favorite influencers who posted a haul where all her outfits included pieces from Shein. Emma decided to check it out and was blown away by the low prices. She ended up ordering two outfits including accessories all for under $40. Emma was surprised by the price and the clothing pieces that she has stopped going to the mall and now buys all her clothes on Shein saving her tons of money.
How is the Shopper Learning About Shein?
A Shein shopper is learning about the company through their main social media channels Tik Tok, Instagram, and Youtube. This is where Shein reposts influencers and consumers hauls where potential customers can see what’s trending and head to the site to begin shopping. They can also learn about Shein through influencers they follow that post their Shein Haul on their social media channels. Lastly, word-of-mouth is another great way Shein receives brand recognition and potential customers to their website. Shein has also collaborated with well known celebrities such as Katy Perry, Nick Jonas, Addison Rae, Lil Nas X, and many more.
How Developed is Shein in DTC in Distribution?
Shein is mostly known as direct to consumer company. When a customer purchases from Shein’s website or app it ships directly to them from its Chinese warehouses.
Shein has opened some temporary pop-up stores in certain locations to appeal to those who don’t like online shopping and want to try clothes on before purchasing. Inside these pop-up locations you can find a variety of selections with unlimited sizes. These pop-up locations draw thousands of shoppers all over the United States. Each week in these pop-up locations there are new clothes and products. Shein likes to promote these pop-up locations by inviting popular influencers and offering discounts on their already cheap clothes. There was recently a Shein pop up shop in New York City.
There are still no permanent, physical Shein store locations as of now, but it would be no surprise if they were to come in the near future because of the success Shein faces. If you would like to attend a Shein pop-up location, keep your eyes peeled for locations around the United States because there are many.
With Shein being mainly a direct to consumer brand, it does not affect the core shopper much at all. The core shopper shows brand loyalty to Shein because of its cheap prices, trendy clothes, and always changing styles. They do not mind if Shein is a purely direct to consumer company as long as they are still receiving the cheap prices and in-style clothes.
What Should Shein do in the Future with Regards to the 4 P’s to Reflect Changing Shopper Behavior?
Shein is already doing amazing when it comes to the 4 P’s. They already have a strong grasp on the “price” aspect by offering the cheapest clothes you will probably find in the fast-fashion industry. Shoppers love low prices and this is one of the main reasons why so many are brand loyal to Shein. It is important Shein keeps up with their low prices to keep up with their brand loyal customers.
Shein also does well in the “product” aspect of the 4 P’s. They provide Gen Z with clothing and accessories that are currently trending. Fashion trends are constantly changing especially among Gen Z. It is important for Shein to continue their fashion research to stay up-to-date on the trends to keep providing consumers product they are going to want.
Shein’s current “promotion” technique is low-cost yet extremely successful. Reposting free hauls posted by consumers of Shein on social media channels is an amazing idea and a great way to spread brand awareness. They should also keep doing collabs with popular celebrities and influencers because this is a great way to reach their Gen Z target market. What Shein has been doing to promote themselves has been successful and they should continue their current techniques.
Where Shein has some room for improvement is with the “place” aspect of the 4 P’s. Shein should think about potentially opening permanent store locations around the world. These stores would be extremely successful especially among those who prefer to in-store shop instead of online shopping. It would be smart to first open one in China, where they were established and have warehouses, and then to continue opening them around the world. Another advantage of Shein opening permanent store locations is that many other places such as H & M are continuing to close down theirs. If Shein is one of the only few fast-fashion places to have a physical store open, many are going to become brand loyal to Shein that once were to H & M.
It will be interesting to see what Shein will continue to do in the future to maintain the world leader in fast-fashion industry.
- Note: This article is a class assignment for BUS 465 — Integrated Brand Promotion and Advertising at NCSU Poole College of Management.
Sources: https://theharrispoll.com/briefs/shein-americas-number-1-fast-fashion-brand-continues-to-rise/
https://www.vox.com/the-goods/22573682/shein-future-of-fast-fashion-explained
