The Fintech Cash app reaches customers through an in-house clothing line.

  • Cash App launched a new clothing brand, Cash by Cash App, during the pandemic.
  • The payments player has launched three different collections, with plans for a fourth in October.
  • The race is on to attract customers as startups compete to be the funding app of choice.

Cash App equips its customers to build brand loyalty as it seeks to compete in an increasingly competitive financial app landscape.

Companies usually settle on practical merchandise such as t-shirts and baseball caps for their loyal customer base. But there’s always a handful that stray from the so-called normal swag in hopes of leaving a more lasting impression – think of the legendary Wall Street banker’s bag that fell into the trend among young Wall Streeters over the of the last four decades.

Cash App, the personal finance app that’s a subsidiary of payments giant Block, seeks to do just that. In a bid to stand out in a crowded payments market, Cash App launched a fashion brand, Cash by Cash App, in 2020.

The line initially offered an athleisure style amid the pandemic. Then, last November, Cash App worked with rapper Megan Thee Stallion on an exterior, limited-edition collection that Liang Shi, head of Cash by Cash App, said sold out of the few hundred units created. In April, Cash App followed that up with the Future Nature collection, its second in-house line.

Now the company is working with an as-yet-unnamed outside designer on its fourth collection due out in October.

“For us, a big part of our brand ethos has long been about empowering financial independence, creativity and self-expression,” Catherine Ferdon, head of marketing and brand at Cash App, told Insider. “We recognize that fashion is actually another major means of self-expression.”

Block executives have expressed their desire to see Cash App become the go-to super app for consumers. But the race for super app stardom for many fintechs is fiercely competitive. Consumers can turn to new digital offerings from established incumbents like JPMorgan and Goldman Sachs, rookie-turned-financial giants like SoFi or PayPal, and even companies without traditional banking experience, like Walmart.

The crowded marketplace has put even more emphasis on how apps manage to acquire new customers. And while traditional marketing and advertising spend remains a mainstay for most, some fintechs have gotten creative with how they engage people, from producing original content, like podcasts or newsletters, to high-level partnerships with influencers.

Some experts say that adopting non-traditional advertising approaches can pay off big time.

“The most important marketing tool today is word of mouth and word of mouth,” Allen Adamson, co-founder and managing partner of marketing firm Metaforce, told Insider. “People share pictures more than words, and taking your marketing out of the rational world of ‘let’s explain why this app is easy to use’ and into the emotional world is what’s needed to pop.”

Trevor Williams, senior vice president of payments and fintech equity research at Jefferies, told Insider that he thinks Block is unique among large-scale fintech companies in targeting younger users and thinks it’s a “smart way” to engage with consumers before they start a bank. relationship with a traditional financial institution.

It positions “Block to potentially increase its mix of users over time who use Cash App as their primary bank account,” Williams said.

Block focuses on how he budgets for marketing

The launch of a third fashion line by Cash App comes as Block executives take a closer look at how it markets itself in tough economic times.

Block’s chief financial officer, Amrita Ahuja, said in August that the company plans to cut its planned operating expenses by $250 million for the rest of the year. “We’ve reduced experimental and less effective go-to-market spend, adjusted risk loss estimates for more current trends, and slowed the pace of hiring,” Ahuja told analysts on the earnings call. of Block’s second quarter.

But Ferdon told Insider Cash App was “eager to invest” in the lineup.

Three women model Cash App dresses and Fenty Beauty casual wear at Afterpay, Cash App & Tidal's Front Row To NYFW Party on September 13, 2022 in New York City.

Three women model Cash App dresses and Fenty Beauty casual wear at Afterpay, Cash App & Tidal’s Front Row To NYFW Party on September 13, 2022 in New York City.

Anna Webber/Stringer/Getty Images

“Money is a way of life and the next generation feels that and expects their bank to understand that about them,” Ferdon said. “A big part of our strategy at Cash App is to make sure we recognize that and highlight it.”

While Cash App declined to specify how much it has spent growing its apparel efforts, financial data from parent company Block offers insight into its marketing and brand spend.

In the second quarter, Block spent $531 million on sales and marketing across its businesses — which now include Square, Cash App, Afterpay and music streaming service Tidal — a 42% year-over-year increase. other.

Cash App represents an important source of income for Block. First launched in 2013, Cash App brought in around $705 million in gross profit in the second quarter, nearly half of Block’s total.

Cash App investments to close the loop

Prices for items in the Cash by Cash App range range from around $20 for a t-shirt to $200 for a raincoat. All proceeds from the last two collections were donated to charity, nonprofits like the Power Shift Network, a group of climate and social justice organizations.

A bestseller from the Future Nature line was a bomber jacket, emblazoned with a bitcoin “B” on the outside and embroidered on the inside with the table of contents from Satoshi Nakamoto’s original bitcoin white paper.

But the most popular choices were t-shirts and hoodies, according to Shi. Former Victoria Secret model Elsa Hosk was reportedly spotted wearing a black Cash by Cash App hoodie from the company’s debut collection. Both Shi and Ferdon declined to specify how many items in total had been sold.

It’s not just about marketing. Dan Dolev, senior analyst and fintech equity researcher at Mizuho Securities, told The Wall Street Journal in 2020 that the availability of Cash by Cash App apparel to purchase through the company’s app — and the fact that Cash App receive a 25% discount for doing so – “could be a test for a closed-loop checkout button for e-commerce.”

Insider previously reported that Cash App has focused on owning more of the payment rails used by merchants, keeping businesses and consumers in the Block ecosystem rather than relying on networks. traditional ones like Visa and Mastercard. Closing this loop, experts said at the time, would mean that Cash App would not have to pay fees to incumbent financial players.

Cash App’s Ferdon said Cash by Cash App “is pretty well integrated” into the company’s broader payment “ecosystem”.

“Going forward, you’re going to see those integration points come even closer together,” Ferdon added.

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