6 Things You Need to Learn from Nasty Gal's 40,000% Growth
When Sophia Amoruso started Nasty Gal in 2006, she was selling vintage clothing that she picked up from thrift stores on eBay out of her apartment. She's come a long way since then, and her Nasty Gal empire is is now ranked as the fasted growing fashion retailer in the United States.
Since Nasty Gal's inception, the company has grown at a rate of at least 500% per year and although financials are carefully guarded, they're suspected to have reached well over the $100 million mark in sales for 2012. The company boasts over 550,000 customers in 60 countries around the world, acquired all in just 5 years time.
After securing $49 million in funding from Index Ventures, which also backed Facebook and Etsy, Nasty Gal has significant resources & strategic backing to fuel their rapid growth.
Now with over 100 employees, a headquarters in Los Angeles, and distribution center in Kentucky, the company is on a growth trajectory that doesn't appear to be slowing down anytime soon. Sophia Amoruso and Nasty Gal did all of this while remaining debt free and profitable from day one.
The company's website header is, "Nasty Gal | Get Hooked. Shop The Coolest Clothing, Shoes, and Vintage." They certainly figured out how to hook their audience. Here's how they did it.
How Nasty Gal Excels
1. The Power of an Engaged Audience: Amoruso demonstrated from day one in her company, a powerful ability to relate to her customers, cater to them, reach them where they spent their time online, and satisfy their needs. It's apparent that NastyGal.com's conversion rate is dramatically higher than the industry standard of 3%, simply by observing the fact that about 140,000 customers visit the site daily for six minutes, and their top 10% of visitors return more than 100 times per month. The company's audience is extremely engaged, and they've built a culture that customers want to be a part of. Amoruso instilled the importance of this into Nasty Gal, and given the rate at which their social media presence is growing, the company's only getting better at it.
2. Leveraging Social Media: Because Nasty Gal's ideal customers are very active on Facebook, Instagram, Tumblr, and Pinterest, that's where the company's taken to create a cult-like following. Nasty Gal's unlocked the secret to monetizing social media like never before. The company has over 860,000 followers on Instagram and 846,000 fans on Facebook. They use social media as a channel to build a culture around the brand, convert fans into sales opportunities, promote new products, and effectively address customers questions & concerns. An example of this in action is how Amoruso challenged her Facebook fans to come up with the best titles for vintage products and gave gift cards to the winners. It's that constant conversation with customers that has created such a loyal following.
3. Hiring Passionate People: The first employee Amoruso hired at Nasty gal was Christina Ferruci and she found her through a Craigslist posting. Five years later, Christina is now the Buying Director for the brand. Amoruso has focused on hiring employees that are not only passionate about the world of fashion, but often fit within the company's own ideal customer profile.
4. Not Taking Investor Money Right Away: Amoruso took Nasty Gal down a very different route than most startups tend to go these days. Nasty Gal has grown profitably with no debt since they started, and they didn't take on investor funding until 2012 when it became apparent that additional funds would be necessary to take the company to the next level. This timing is no coincidence, it's very strategic. Amoruso only opened up the line of discussion with investors once she had created a proven business model, acquired customers, and developed a contagious company culture. She's created a successful, scalable business and because she did that first, investor backing is worth so much more.
5. Outstanding Product Photography: Nasty Gal's company-branded products are photographed by notorious fashion photographer Terry Richardson, which lends the company not only a highly respected status in the industry, but an unparalleled level of quality & style. Nasty Gal pulls off product photography flawlessly, and this comes from the company's beginnings when Sophia set out to use only models who were approachable and “looked like nice people, not dead people,” as she put it. The company only uses images that invoke a compelling response from their customers, and this visual mastery has won them their reputation in the industry.
6. Always Adapting: Nasty Gal adapted their selling process to reach their customers where they wanted to be. When Sophia began with selling vintage clothes on eBay, she received an overwhelming response from customers and realized that she needed to have a better user-experience online in order to reach a larger audience. NastyGal.com is a very well-designed, thought out ecommerce site that has been formulated to appeal to their target market. The company also realized early on that their customers were very active & engaged on social media sites, and the company's since poured significant resources into engaging with customers through this channel. Nasty Gal's made the most of uncovering their customers buying patterns, and it's allowed them to be debt free and profitable since day one.
What else can be learned from Nasty Gal's incredible success story?