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Critical Analysis Of How Depop Understands, Creates, Communicates, and Delivers

Customer Values

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Introduction

Customer value is one of the most important concepts in marketing. For a company to

achieve great success, it must have an in-depth understanding of customer value. That is because

by doing so, the company will put in strategies that will help to ensure a significant increase in

its customer value. For clarification, customer value refers to how much a particular product or

service is worth to customers. Also, according to Payne et al. (2017), customer value is the

measure of the entire costs and benefits linked with a particular service or product. It can further

be understood as what a certain product or service can do for a certain customer. Some examples

of customer value include quality, price, energy, and emotional costs that particular consumers

consider when evaluating the value of a product or service. It is worth noting that customer value

is not entirely about money. Instead, it is normally created through the solution offered by a

particular product or service, not just to the buyer but also to the company. It is worth noting that

customer value is subjective because even though the cost of the product or service is the same,

the value or utility that every customer will draw from the product or service will vary,

depending on several factors, such as customer experience. This paper is a critical analysis of

how Depop understands, creates, communicates, and delivers customer values.

Overview/ Background of Depop

Depop is a peer-to-peer social e-commerce firm that is based in London, UK. However, it has

additional offices in different parts of the globe, including New York, Milan, and Manchester.

Over the last few years, Depop has been expanding its global presence in different countries,

including the U.S, the UK, New Zealand, Italy, and Australia. The company’s business model

allows its users to sell and purchase various items, most of which include used and vintage

pieces of clothing. Simon Beckerman founded the company in 2011. He raised €1 million in
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funding in 2013 after which he employed Faroese Reistrup as the company’s CEO. In addition,

in 2015, he secured another investment capital amounting to $8 million from Holtzbrinck and

Balderton Capital ventures, which was used for the expansion of the company (Ul Hasan & Lang

2022). Most of its clients are based in the UK, Australia, and the USA. In 2016, the company’s

CEO claimed that most of Depop’s success was achieved through word of mouth. The company

is about capturing the experience of the clients by ensuring closeness with customers, providing

easy means of communicating with the company, and providing feedback concerning user

experience. For example, to ensure that it is close to people, the company’s services can be

accessed through the Depop mobile app. The ability to access the services through a mobile app

means that users can access the company wherever they are provided they have an internet

connection on their devices (Ul Hasan & Lang 2022). Also, the company has a presence on

different social media platforms whereby it has allowed open communication. Through social

media platforms, especially Facebook, Twitter, and Instagram, users can communicate with the

company and provide the necessary feedback to the company.

Understanding Values

One of the easiest ways to improve customer value is by understanding the customers that

the business serves. When the company understands the characteristics of the customers that it

serves, it is best placed to offer products and services that deliver the greatest value or utility to

those customers (Payne et al. 2017). Depop best understands that. One of the characteristics of

Depop’s customers is price sensitivity. The majority of the people who purchase their clothing

products at Depop are normally low-income earners who mostly comprise Gen Z consumers.

Thus, these customers’ objective is to purchase products at low prices at Depop than they would

purchase from Competitor Companies. When customers are price-sensitive, they can easily shift
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their loyalty to competitor firms if the company increases its price (Natarajan 2017). Depop has

understood this characteristic of price-sensitive customers and can strategize to ensure that the

company does not experience an exodus of clients. To avoid the loss of loyal clients, the

company has always ensured that the prices of products posted on the platform are cheaper as

compared to the prices of competitor companies.

The primary target audience of Depop is Gen Z and millennial consumers. According to

Lunden (2019), Depop primarily targets millennial and Gen Z consumers and for that reason, as

per the company, more than 90% of its active customers are aged below 26 years. UK is the

company’s home market and according to Lunden (2019), 33% of the people aged between 16

and 24 years in the UK have registered on Depop. Maguire (2021) describes Gen Z and

millennial consumers as being fluid and craving for flexibility. For this reason, this group of

customers thinks that second-hand clothes are cool. Also, the target has targeted this market

since according to Maguire (2021), Generation Z will make up about 40% of the luxury market

by 2035. Therefore, targeting this consumer segment is sustainable for the company.

There are different ways through which insight is generated by Depop. Mainly, Depop

generates insight through its social media platforms. The company has a massive following on

different social media platforms, including Facebook, Instagram, and Twitter. On these

platforms, customers and potential customers comments on aspects of the company that needs to

be improved and the changes they want to be affected. Through such comments and feedback

through social media from customers, the company can understand the needs and preferences of

the clients and change accordingly to meet those needs. Another way through which the

company generates insight is by conducting research in collaboration with other firms. For

example, in 2021, Depop, in collaboration with consultancy Bain conducted research that sought
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to understand the consumer behavior of Gen Z and millennials, who are the target audience of

Depop (Maguire 2021). The main value that customers expect from the Depop brand is a wide

variety of cost-effective secondhand clothes.

How Depop Creates Values

One of the ways through which the Depop Company creates value is through its pricing

policy. For clarification, the pricing policy is a firm’s approach to determining the price at which

it offers a product or service (Klenert et al. 2018). To fit the purchasing power of its target

audience, the company uses a low-pricing policy. With this approach, the company ensures that

its products are sold at a relatively low price as compared to the price that competitor companies

offer. The company has laid out several strategies to achieve the low-pricing strategy. Mainly,

Depop has ensured that the charges it imposes on each transaction are extremely low. This

ensures that the seller does not transfer huge charges to the customer. For example, according to

Smith (2022), Depop takes or charges a 10% fee based on the final sale price and the shipping

cost. The fee that Depop charges is deducted from the seller’s PayPal or the Depop Payments

accounts 21 days following the sale. Also, the company runs special discount offers for sellers.

The discounts enable the sellers to sell their products at minimal prices and make a profit. In

most cases, the company announces special offers on its social media platforms. Also, to ensure

the low pricing strategy is successful, the company does not charge listing fees.

Also, the company creates value through its communication media. Mainly, Depop

communicates through its social media platforms, such as Twitter, Facebook, and Instagram.

Through social media platforms, the company announces all the discounts and offers that the

company might have. Also, on social media platforms, the company uploads images of some of

the merchandise that it has on its platform. Also, it engages clients on these platforms to
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understand their opinions and resolve their complaints. A good example is a screenshot in figure

1 between Depop and Fran Galore, one of the company’s followers on Facebook.

Figure 1: communication between Depop and Fran Galore on Facebook

Also, the company posts images of some of the products it sells on its platform. A good

example is the image below, which the company posted on 22nd October 2022.

Figure 2: An image of a product posted by Depop on its Facebook Platform

Also, the company creates value through its collaborations and partnerships. For

example, in 2022, Depop partnered with Benetton. News.depop.com (2022) claims that Benetton
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and Depop partnered in order to celebrate Benetton’s boundary-pushing heritage, which is

channeled through Depop’s creative community’s self-expression and energy.

Depop’s Communication of Values

One of the ways through which Depop communicates value is advertising. The main

advertising approach that Depop uses is social media marketing. According to Mancilla (2022),

the Depop app uses social media as the backbone of its marketing campaigns. The decision of

Depop to use social media to advertise its products via social media makes a lot of sense since

the company targets the Gen Z audience. The main strategy that the company uses is reposting

cool images that the Depop community creates. Furthermore, the Depop community comprises

diverse and styled users. This is important since it ensures diversity in the images and content

that the company posts on social media. There are several benefits associated with social media

marketing. As per Jacobson et al. (2020), social media marketing builds brand awareness and

leads to the generation of conversation around a brand. Also, Alalwan et al. (2017) claim that

social media marketing helps the company understand the interests of its target customers and it

helps the company to collect data about its audience.

Furthermore, the company utilizes social media influencers. Numerous celebrities and

high-profile social media influencers use Depop to sell unwanted clothes. In some cases, the

influencers use the profits from the sales to donate to charity activities. One of the most popular

social media influencers on the platform is Sophia Tuxford. With over 64Kfollowers on Depop,

she regularly updates her profile with clothes and products she no longer wears. According to

Mosley (2021), Sophia Tuxford has sold more than 1,200 items on Depop. Another popular

influencer of Depop is Holly Laing. Laing is popular and renowned for sharing her love for

Depop on TikTok. She uses her Depop account to sell many things, including phone cases,
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clothes, jewelry, and hair accessories that she no longer uses. Many people have developed a lot

of trust in Depop because of Laing and Sophia’s influence.

Delivering Values

One of the ways through which Depop delivers value is through availability. To ensure

availability, Depop offers its products through its Depop app, which is installed on mobile

devices. Since the Depop app is installed on mobile devices, people can access it from any place

across the globe provided they have internet access. Therefore, people can trade on the Depop

app from the comfort of their homes or office. Furthermore, the company delivers value since it

provides an opportunity for after-sales service and complaints. Customers can comment on the

company’s social media platforms about their purchase experience. This feedback is important

since it enables the company to improve customer experience.

Another way through which Depop delivers value is through buyer and seller interaction.

Everything that is not marked as “SOLD” in the Depop app is available for purchase. Also, the

app provides both the customer and seller with a chat function to message one another and

negotiate the prices down (Bae et al. 2022). This interaction between the seller and buyer is

important since it increases trust in the platform.

Conclusion

Depop is one of the most innovative companies in the world. For the few years the

company has been operating, it has achieved immense success. One of the factors that have

contributed to its success is that it offers value to customers. Among the challenges the company

faces is sustaining the current innovative trajectory. Maintaining the prevailing innovative

trajectory will assure the company of competitiveness over its rivals. One opportunity the
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company can exploit is expanding its target audience to include Gen Alpha. Doing so will

increase the company’s customer base.

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Mancilla, A. (2022) Depop redefines social media marketing, Hollywood Branded Blog.

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