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  • Writer's pictureNick Bonney

The Not so Magic Circle – How Boohoo Have Spoilt the Brand Illusion

Updated: Apr 16, 2021

In 1905 a bunch of some 23 amateur and professional magicians got together at Pinoli’s restaurant in London to form the Magic Circle, the society dedicated to stage magic. Now nearly 120 years old, any aspiring conjurer or illusionist looking to become part of this exclusive club needs to sign the Magic Circle’s Form of Declaration. Central to this form is the solemn promise to “not in any way knowingly, or intentionally, disclose any secret of magic to anyone unless they be a magician, and to confine the discussion of effects and secrets originated within the Society to Apprentices or Members of The Magic Circle”

We’d be building our part somewhat to claim that marketers are magicians but, just like a trick loses its appeal once you know how it’s done, no unwitting consumer wants to be confronted with their potential illogical decision making. Step into the spotlight then Boohoo who, excited by the - potential of their new house of brands, seem to have forgotten the art of mystique and illusion altogether.

For those of you who missed the story over the Easter holidays, those naughty fast fashion wizards at Boohoo have been caught out selling the same product under different brands for different prices. For anyone who has conducted any kind of trade-off / pricing research before, this shouldn’t be that surprising. I’ve lost count of the number of conjoint studies I’ve done where consumers are more than happy to pay a greater price for the same package with a more aspirational brand name.

However, what was so crass about Boohoo’s attempt at executing a house of brands strategy wasn’t the attempt at differential pricing but rather the way it was executed. Got some old Oasis stock you can’t seem to shift? No bother. Just get Dave in the warehouse to get his Sharpie out, scrub out the logo and then pop it on the Karen Millen site for a 40% premium. Struggling to sell through that excess stock of winter coats at Dorothy Perkins? Why not ask Sheila in the stockroom to get her big scissors out and cut the logo off the label? Job’s a good’un and pop it on the Coast website for a 37% premium.

I think we can all agree that Boohoo’s strategy left something to be desired in terms of execution and, publicly at least, they have put the dodgy pricing strategy down to a simple mistake. However, it says something about the lack of customer focus within the business that they thought they could get away with it. What is particularly galling for these shoppers is that they’ve been made to look stupid. Whether we admit it or not, we all make purchase decisions daily which are rooted in intangible, brand-led decisions. Sure, we’ll try to justify why that soap washes cleaner, why these cornflakes are crispier or why those trainers are more comfortable, but more often than not we’re buying into what the brand stands for.

These decisions are the result of often decades of investment and marketing support into what the brand stands for and what leads companies to be able to place such eye-watering valuations on the ‘goodwill’ that the brand is able to command. In their latest league table, brand valuation specialists Brand Finance value the Apple brand at -$263 billion!

However, sustaining this brand value is not just the role of above the line advertising. No beautifully shot 60 second advert is going to sustain brand value if the product it’s selling is a pile of crap. As was drummed into all of us during the early days at Orange, “ a brand is a promise delivered”. When consumers feel you have broken that promise as a brand, they vote with their feet and quickly. At best, it opens up opportunities for challenger brands to disrupt the category. Low cost airlines were able to make such an impact in the sector because scheduled airlines had quite frankly taken their passengers for granted.

Interesting then to see that whilst Boohoo are making their own special entry into the marketing equivalent of a Channel Five ‘when magic tricks go wrong’ montage, it’s interesting to see a brand like BeautyPie also shine a light on the size of brand premiums. Positioned as a member’s only subscription model, BeautyPie are highlighting just how high brand premiums are in the beauty category. With a dedicated ‘cost transparency’ page on their website, they pull no punches in demonstrating/ showing that £85.40 of a £100 product is being passed to middlemen and markup. It remains to be seen how successful this model will be in the beauty space but, given that the likes of Dollar Shave Club have already had brand giants Gillette running for the cheque book, it’s likely that there are a few nervous faces at L’Oreal towers right now.

The difference of course is that BeautyPie are on the outside exposing someone else’s trick and, in doing so, they are clearly positioning themselves as the customer champion. Whilst they are the YouTuber letting us all in on the secrets of how tricks work, Boohoo appear to be doing their best impression of the bumbling stage musician dropping the deck on the floor and showing you that all 52 cards were the 9 of bloody hearts all along...

Perhaps though there is a happy ending to this sorry tale after all. Despite the botched strategy (quite literally executed with Sharpies and scissors), shoppers will pay a premium for the right brand but equally it's often a fragile relationship and the worst thing we can do as marketers is to take that brand affinity for granted.


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