NA-KD has taken the online fashion retail market by surprise with its innovative approach to influencer marketing. The Swedish company, founded in 2015, generated more than €100 million in revenue in the past year and has more than 2 million Instagram followers.
By working with micro-influencers, NA-KD has been able to grow exponentially. The retailer had the option to either work with famous influencers who have more followers or micro-influencers who have fewer followers. By choosing the latter, they were able to reach more people at a lower cost.
At the beginning, NA-KD did collaborations with well-known influencers. However, they quickly realized the levels of engagements were low and it was simply not a cost-effective marketing strategy.
Why are micro-influencers better? It comes down to engagement with followers. Viral Nation states that when the number of followers increases, the engagement rate decreases. This is shown in the graph below.
Engagement rates are low with well known influencers because followers have less resemblance with them. Imagine seeing a recommendation made by your college friend vs Kim Kardashian. Kim has a larger following, but each of them is less likely to be influenced compared with someone like your friend.
The secret sauce to NA-KD’s success is the measurement
While most companies work with influencers without proper tracking (the horror), NA-KD does it differently. The retailer gives each micro-influencer a promo code which they share with their followers. Not only do users love discounts, but this allows them to carefully track which influencers produce direct sales and which don’t. Then they keep on working with influencers that are “winners” and drop the “losers”.
NA-KD doesn’t just collaborate with influencers for a short period of time, they nurture the connection for months and even years. This way, the retailer is able to grow a community of followers and customers who will be loyal in the long run.
The retailer also spends a substantial amount of resources on influencer marketing. This means hiring employees with the purpose of managing relationships with every influencer. As of time of writing, we counted approx 20 employees at the company working on this project, which is almost 10% of the entire organisation. This shows how much ROI they get from these activities.
Website User Experience
NA-KD’s shopping experience is interactive because of the high-quality images. Each product is shown in many angles so shoppers get an accurate feel for fit.
The “Shop Instagram” section encourages users to upload their images with their hashtag #beNAKD in order to be featured. This allows NA-KD to obtain high-quality images from their users at little cost but while also building brand loyalty. But we wonder how much resources goes into reviewing this content?
Shoppers are able to click on the images from Instagram and later choose to purchase part of the outfit. Part of the reason why this strategy is clever is that shoppers trust users and people who have purchased the product already, so they are more inclined to buy it themselves.
NA-KD is growing rapidly and becoming a prominent fashion retailer in Europe. In fact, NA-KD is becoming famous within the influencer world with their trendy products and clear marketing strategy. This goes to show that user content from micro-influencer is powerful in converting shoppers into buyers. This content is authentic, of high quality, and beneficial for all online retailers.