The arrival of Shein in the clothing and apparel scene is quite disruptive. It is the first fast-fashion retailer with exclusive online-enabled operations. The company does not have physical stores. It distributes and sells its products across the world through an online storefront. Furthermore, with electronic commerce as one of its strengths and source of competitive advantage, it has become the largest fashion retailer in 2022, thus surpassing established fast-fashion retail companies like Zara and H&M and even incumbents like Nike and Gap. This article discusses the marketing strategy of Shein using the 4Ps Marketing Mix model.
Exploring the Marketing Strategy of Shein: A Marketing Mix Analysis Based on the 4Ps Model
1. Product Strategy
Shein can be best described as an online fast-fashion retailer. This characterization is at the core of its product strategy. It is similar to other fast-fashion companies like Zara and H&M but its main differentiation centers on its online-enabled retail operations. The following are the more specific details of its product strategy:
• Fast Fashion Concept: The fast fashion concept is central to the product strategy of Shein. It specifically designs, produces, and distributes its products at a rapid pace to capitalize on emerging and current fashion trends.
• Affordable Retail Products: Affordability is the overarching value proposition or selling point of fast-fashion retailers. Shein brings down all costs associated with production and operation to keep the prices of its products competitive.
• Manufacturing Outsourcing: Shein does not own manufacturing facilities. It outsources its product requirements to contract manufacturers. This is critical to bringing down its production cost and reaching its production targets.
• Small-Batch Production: It also produces products in small batches in accordance to demand to avoid excesses and optimize its inventory. This allows it to bring down further costs associated with production and inventory management.
• Product Diversification: The company has diversified its product offerings across the greater retail market. These include clothes and accessories for men, women, children, and homeware, electronics accessories, and beauty products.
• Online Storefront: Shein is not only a fast-fashion retailer but also an electronic commerce company. This is how it differentiates itself from the competition. Its website is both its product and its official online storefront.
2. Pricing Strategy
Of course, because affordability is part of its value proposition, the pricing strategy of Shein is based on a penetration pricing strategy. Take note that other fast-fashion retailers utilize the same pricing strategy but the price points of Shein products are even relatively lower than the average prices of its competitors like Zara and H&M.
The company also provides discounts through limited and seasonal sales promotion campaigns. These campaigns create a sense of urgency, entice customers to purchase, and drum up sales targets. It also incentivizes loyal customers to encourage repeat purchases and provides free shipping fees for purchases meeting a set total order amount.
3. Place or Distribution Strategy
Most fashion retailers also have online storefronts. Some have also utilized third-party electronic commerce platforms like Amazon in North America or Alibaba and Lazada in Southeast Asia. Shein is the first global fast-fashion retailer that has an online-only distribution channel coursed through its official website. Electronic commerce is central to its business strategy.
In addition, considering its market reach, the company targets the global market. It has a network of warehouses in different market regions including North America, Europe, the Middle East, China, and Asia and the Pacific. This enables it to cater to over 220 countries and also allows it to fulfill orders within 6 to 8 days on average.
Technology is at the heart of the distribution strategy of Shein. Its electronic commerce platform includes a strong integration between its online storefront and logistics management using process automation, customer relations management and other enterprise resource planning systems, and artificial intelligence.
Shein has also built and maintained relationships with local logistics and transportation companies for order fulfillment. These partnerships are essential in both its distribution strategy and overall business strategy. mean that the company does not need to own and operate a network of couriers in regional markets and specific countries.
4. Promotion Strategy
Another critical element of the marketing strategy of Shein is its diverse promotion mix. The company has utilized different promotional tactics and activities across different marketing platforms to push its brand and specific products to the target market. The following are the more specific details of its promotion strategy:
• Digital Advertising: Shein has promoted its online storefront across different digital platforms. These include social media platforms, search engines, ad networks for digital publishers, and mobile apps like mobile games.
• Endorsers and Influencers: It has also tapped celebrities and online influencers as part of its digital marketing activities and specific marketing campaigns. This allows the company to reach the audience base of its brand ambassadors.
Affiliate Marketing: The dedicated influencer program of the company is coursed through its affiliate program. This enables anyone to promote Shein products on their platforms and receive commissions from sales conversions.
• Sales Promotions: Remember that Shein offers discounts during its various limited and seasonal sales promotion campaigns to entice customers. These campaigns help in pushing products and reinforce sales momentum.
• Gamification: Shein has also gamified its electronic commerce platform. It rewards customers with points for various in-app or in-store activities to increase user engagement, attract more traffic, and push products further.