NA-KD Case Study: A Look into The Brand’s Business Strategies

NA-KD Case Study: A Look into The Brand’s Business Strategies

NA-KD: An Introduction to the brand

NA-KD is a fashion retailer company that was founded in 2015 in Sweden. It was initially started as an e-commerce business that was focused on selling other brands’ clothing. However, this strategy shifted when they realized their customers were much more interested in their own clothing line. This company produces all kinds of products from tops and bottoms to accessories and shoes.

NA-KD has capitalized on the new marketing strategy of utilizing social media to appeal to and interact with its customers. 

NA-KD’s Strategy Shift and Current Product Line

NA-KD’s initial concept was to sell clothing from various different brands and in doing so, appeal to all different price points. NA-KD was initially an exclusively online brand, however, they opened their first physical store in 2015 and have opened a few more within Europe since then. 

Additionally, the brand wanted to appeal to people all around the world but could not ship their product to them in an efficient and cost-effective manner. 

Therefore, NA-KD began to use Asendia’s B2C service in 2018 to appeal to the French market and after that was successful, they used Asendia to reach the Swiss market as well. 

Asendia provides mail delivery services worldwide and decreases the complexity of shipping overseas. They also shifted their product variety after utilizing data and their customer’s feedback that showed that NA-KD’s products were outperforming and were preferred over external products. 

After discovering this information they shifted their focus to selling mainly products from their own brand, with only a few outside brand products.

 Currently, NAKD sells the following products:

  • Tops
  • Sweaters
  • Jeans
  • Trousers
  • Outerwear
  • Dresses
  • Shirts & Blouses
  • Lingerie and Sleepwear
  • Accessories
  • Blazers
  • Loungewear
  • Shoes
  • Skirts
  • Swim & Beachwear
  • Bags
  • Jumpsuits and Playsuits
  • Shorts
  • Hoodies and Sweats
  • Sets
  • Beauty

In addition to these products, they offer the high-quality “Tailoring” collection and a “Reborn” collection and several other collections specifically designed by influencers. As we’ll see in the next paragraph, the role of influencers is central to NAKD’s marketing strategies. 

NAKD’s Influencer Marketing Strategy

NA-KD heavily uses social media and influencers to market its brand and build its consumer base. When the brand was first founded it mainly relied on Instagram for advertising through influencers, however since Tik Tok has gone viral within the past few years, they began to also utilize Tik Tok for the same marketing. Their handle is the same on both platforms: @nakdfashion. They have 3.2M followers on Instagram and nearly 360K followers on Tik Tok.

Some of their influencers include Ida Carlsson, Lisa & Lena, Victoria Waldau, Sorelle Mocean, Susanna Wurz, Klara Montes, and many others. Having influencers post wearing their clothes on Instagram and Tik Tok is very effective. It reaches the audience that their brand is intended for very quickly and makes it extremely easy for a customer to purchase with a quick click of a link.

Social media has quickly become the most valuable marketing strategy for the fashion industry and NA-KD takes that one step further by having its influencers work directly with the brand to design their own lines. Having creative collaboration with the influencers to design the collections fosters more interest from the influencer’s followers because they feel a sense of personal connection to the influencer and feel that they are directly supporting them by purchasing clothing items. 

NA-KD’s Utilization of Data

NA-KD fuels all of its business decisions with data. They rely on both internal data from their own company and external data from companies such as Heuritech. Heuritech is a trend forecasting platform that uses analytics to predict future trends in fashion. Internally, they have all of their data compiled into one data warehouse that allows them to analyze it from different viewpoints and with different filters to obtain the desired information. The brand weighs its own data against the data about the market as a whole to form smart and educated decisions concerning future projects and business strategies. 

NAKD’s Sustainability Efforts and Commitment 

NA-KD is very aware of the sustainability issues revolving around the fashion industry and they are committed to doing their part in helping the world’s environment. NA-KD’s principle idea of having short production cycles and not mass producing already is better for the environment than other fashion retailers who mass produce every product they sell. However, the fashion industry in itself causes many negative effects on the environment that stem from excessive water usage, water waste, chemical usage, raw material production, soil erosion, and emissions. Also, changes in consumer behavior have led to more severe impacts on the environment. For example, the average time that a person wears a piece of clothing has decreased by 36%. Today’s society has become very focused on the latest trend and being seen with new clothes every time which has a horrible impact on the earth. Additionally, only 20% of clothing is actually recycled/reused. This information is what led NA-KD to begin its “circularity” campaign. 

NAKD’s Circularity Model

NA-KD strongly believes that it is crucial for the fashion industry to shift to a circular model in order to decrease the negative impacts caused to the environment. The two most important aspects of the brand for this campaign are being careful and considerate about the materials and designs used in their products/packaging and making their best attempt to prolong the life of their products. They utilize their customers’ opinions and feedback to create reselling, upcycling, and subscription strategies to achieve this model. 

On NA-KD’s website they highlight where they are now in terms of their circularity model: 

Up until the end of 2021, together with our customers, we have prolonged the life of close to 40,000 products, both through second-hand and rental. On average, a NA-KD preloved product sold in 2021 saves 2.6kg CO2e compared to if the same product was sold new. In 2022, we’re working on a collection drop designed for circularity. In 2021, 3% of our packaging was circular to our knowledge. But we believe this figure is higher in reality. The vast majority of our packaging is from the cardboard used for inbound transportation from the factories we work with to our warehouses. Benchmarking the industry, we have learned that the majority of this cardboard may very well be from recycled materials. Therefore, we are working to map out the situation in our supply chain. We are also continuing to review and improve all our packaging, including the bags in which you receive your products from NA-KD. In 2021, 15% of all our product materials came from recycled materials, up from 3% in 2020. In 2021, we reused or recycled 87% of packaging materials from all our sites.” (source)

NA-KD is committed to working on its circularity model and in turn helping the environment. 

The company’s goals for the future include: 

Enabling our customers to prolong the life of five million garments by 2025 through circularity initiatives, saved tons of CO2e through circularity initiatives, by 2022 launch at least one collection designed for circularity, by 2025 have 100% circularity packaging, by 2025 have 50% of product materials from recycled materials, and by 2025 reuse or recycle 100% of packaging materials from all our sites.” (source)

These goals and the model in general are very advanced and creative and could result in very good returns for the brand. 

NAKD’s Pre-Loved Collection

As a part of its Circularity model, NA-KD offers an opportunity for its customers to sell and purchase “pre-loved” products. This means customers can list their already worn/used NA-KD products on the brand’s website and sell them to the brand’s customers at a discount. Customers can then see which items are available as “pre-loved” and purchase the clothes at a discount, all while helping the environment. In this case, NA-KD acts as an online marketplace that provides a space for these transactions to take place free of charge. NA-KD pays for the shipping to the purchaser and the seller of the items and earns store credit to use on NA-KD’s website. This is a very innovative and efficient way of upcycling clothing, especially with how much online retail has grown in the past decade it has made it very difficult for brands to upcycle. NA-KD has paved the path for other fashion brands to hopefully start the same programs.  

NAKD’s Efforts in CO2 Emission Reduction

Similar to the way NA-KD showcases their progress for Circularity, they do the same for the brand’s reductions of emissions. 

Their “where we are now” section says “73% reduction in emissions from our own operations, 28% reduction in emissions from products (and services) sold, 5% reduction in absolute emissions.” 

All of these statistics are from 2021. Based on this information, NA-KD has a commitment to reduce its climate emissions by 50% by 2030, and by 50% per product (and service) sold by 2025. Their 2020 baseline will be utilized to measure the performance of this commitment. They also have a goal of reducing emissions from their own operations by 80% by 2025. These are all very ambitious goals and if achieved, would make strides in reshaping the fashion industry to become less damaging to the environment. 

NAKD’s Diversity and Inclusion Efforts

Diversity and Inclusion have been very relevant topics when discussing companies and the workplace. NA-KD realizes the importance of improving diversity and inclusion within its company and has set many different qualitative and quantitative goals to meet the standards they are planning to achieve. They have goals regarding the representation of women, an inclusive workplace, and fair and equal jobs within their supply chain. These goals include: 

“Influencers representing all five continents. By 2025, 80% of customers perceive NA-KD as celebrating equality & diversity. A balanced representation of women/men/non-binary through the organization; both from a functional and managerial perspective. Maintain our high level of foreign-born co-workers. All staff and recruitment partners to take regular diversity & inclusion training. All staff to take anti-harassment and bullying training during 2021. Equal employee satisfaction between gender/age/departments. By 2025 factories representing at least 50% of our spend enrolled in concrete social sustainability initiatives. By 2025, factories representing 80% of our spend showing high performance in social audits.” 

Conclusive Remarks on NAKD’s Vision and Values

Overall, NA-KD has a very innovative and well-rounded business strategy and they continue to evolve based on trends and data. The brand grew extremely fast and became successful relatively quickly for a fashion company. They are a forward-thinking fashion company with a promising future and if they continue to capitalize on their business strategy they will continue to attract more customers.

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NA-KD Case Study: A Look into The Brand’s Business Strategies
In this post, we're looking into NAKD's strategy and approach to the market.
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