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Why Aritzia's CEO sees influencers as a part of the company's future

(Yahoo Finance Canada)
(Yahoo Finance Canada)

The death of the retail industry may have been greatly exaggerated – but that doesn't mean the industry isn't currently going through major disruptive and fundamental changes. For this special series, Yahoo Finance Canada will look at how the retail scene is developing, what companies are doing to adapt, and what could come next. Click the image above to see our full coverage of what the future holds for the Canadian and global retail scene.

It was the Instagram post that spurred countless memes – and made an Aritzia Inc. (ATZ.TO) coat the must-have item of the season.

When Kendall Jenner shared a photo to her 100 million Instagram followers of her wearing a red $250 Super Puff coat, it stirred an online frenzy – and marked what Aritzia chief executive Brian Hill called “an extraordinarily successful” campaign.

TORONTO, ON - NOVEMBER 12: The Aritzia store at Fairview mall in Toronto, Ontario.        (Todd Korol/Toronto Star via Getty Images)
TORONTO, ON - NOVEMBER 12: The Aritzia store at Fairview mall in Toronto, Ontario. (Todd Korol/Toronto Star via Getty Images)

“I think being in the fashion business, you have to be looking at influencers,” Hill said in an interview with Yahoo Finance Canada on the sidelines of the Retail Council of Canada’s Store conference last week.

“You’re going to get a certain amount of influencer wearing your products organically, but if you really want to push something and get specific about a product, you’ll have to end up going with some paid influencers at time.”

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Influencer marketing has been on the rise for years, becoming a key part of many retailers marketing budgets.

Hill has even cited “celebrity influencers” – including Hailey Bieber, Gigi and Bella Hadid, Kaia Gerber and Kendall Jenner – on quarterly conference calls with analysts.

“I’m excited by the level of support have we have from key fashion influencers in the industry,” Hill said on a call earlier this year.

“Our influencers will continue to be a part of our marketing strategy as we move forward.”

Aritzia has managed to find success, not only among paid influencers like Jenner, but with what Hill calls “organic influencers.” (Aritzia coats worn by the Duchess of Sussex Meghan Markle tend to sell out immediately.) Lately, the company has been exploring partnerships with Youtube and other social media influencers. Hill told analysts earlier this month that customers responded “extremely well” to a post from a YouTube personality with around 16 million followers.

“Within a day, we acquired 10,000 new Instagram followers and our rate of sale for this item increased by over 700 per cent,” Hill said.

The influencers and their reach on social media have certainly helped raise Aritzia’s profile at what is an important time for the company.

Aritzia plans on opening at least six new stores in the United States next year as its popularity continues to rapidly grow in the American market. In the fourth quarter alone, U.S. revenues grew by 40 per cent. Hill credited the marketing efforts as one of several factors that helped accelerate brand awareness in the U.S.

It has also, in part, helped contribute to the success of the company’s eCommerce business, which is expected to make up about 40 per cent of the company’s forecasted revenue growth through to 2021.

“eCommerce momentum remains strong heading into (2020), underpinned by robust consumer uptake, enhanced brand visibility as Aritzia expands into new markets and initiatives and investments around digital marketing driving significant traffic growth,” RBC Capital Markets analyst Irene Nattel wrote in a note to clients this month.

Going forward, Hill said he expects the company’s growing footprint in the U.S. will surpass its presence in Canada within the next decade.

“We have a huge opportunity ahead of us,” Hill said.

“We have great momentum there, and our growth is great in the U.S., so we’re going to continue to work on that.”

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