London - Succeeding within the retail industry remains a tremendous feat -especially within the fickle fashion market. As consumers around the globecontinue to shift how, when and what they buy, keeping pace is vital partto any success story. But within the fashion industry, which continues tobe plagued by record breaking store closures, bankruptcies and extremediscounting, there stands one British online pure-player which continues tobuck this trend - Asos. Not many fashion retailers can boast of a 32percent increase in sales, but that is precisely what the London-basedretailer reported.
For the four months to June this year, Asos reported a total of 660.1million pounds in sales and expects full year profits to hit 79.4 millionpounds. With a market capitalization of close to 6.5 billion dollars (5.05billion pounds), Asos is the most valuable online fashion retailer in theUK. But what is the secret to Asos's success story? FashionUnited takes acloser look at the secrets behind Asos's success and shares 5 main reasonsbehind Asos recent achievements.
1. Embracing the New
One of the main areas driving Asos business is its focus on the new. As theonline retailer remains committed to offering its consumers the latesttrends, Asos continually offers new products. Close to half (41 percent) ofthe online fashion retailer's current product assortment arrived in storeover the last three months, with Asos offering between 2,500 and 7,000 newitems every week, according to data from Edited, retail analytics firm.Asos also times the drop of its trends as well, rather than launchingsingular styles it waits until it has a full assortment before droppingthem in one go, solidifying its position as a fast-fashion trend authority.
For example, in response to the ongoing athleisure trend, Asos hasincreased its sportswear offering by 268 percent during the first half of2017 compared to the same period one year ago. In the same period, fullprice sell outs have increased by 100 percent. The top five most stockedbrands Asos currently offers are Under Armour, Nike, Puma, Nike Running,Nike Training followed by Adidas and Reebok.
2. It’s not about being the cheapest
Another area helping push Asos forward is price. Rather than focusing onbeing the cheapest, like many fast-fashion retailers, Asos offers a widerange of branded goods at different price-points. These third-party goods,which come from a number of brands, tend to be higher priced than its ownin-house goods. This is strategy is much more in line with traditionalcatalogue retailers and helps Asos differentiate itself from other onlinefashion retailers, like Boohoo. In addition, Asos also focuses on offeringstand-out, exclusive products which can’t be found anywhere else.
Prices on these ‘exclusive’ products tend to skew higher than the restof the assortment and also help establish Asos trend-leading reputation,according to Edited. Asos uses these exclusive products to drive specifictrends it is offering as well. For example, the online fashion retailerrecently featured exclusive athleisure products with Puma. Nike andEliesse.
3. Strategical Discounting
Even though many retailers still struggle when it comes to discounting,Asos has developed a strong system for strategical discounting. Rather thanlumping its discounted products together with its full-priced, Asos has adedicated ‘outlet’ section on its website. This means that sale shoppersknow exactly where to go if they are looking for a bargain and regularshoppers can focus on browsing through the new collections - although Asoseven introduces new branded products directly into its outlet section aswell.
Outside of its outlet, Asos does offer promotional discounting which ismostly driven by email discount codes. Key dates are in June and December,although over the last three months 20 out of 40 women’s newslettersmentioned sales, according to Edited. Trends are not immune to discountingas well. At the moment 37.2 percent of Asos’s UK sportswear offering isdiscounted by an average of 37 percent.
4. Solid Core
Although Asos is a trend driven e-tailer, the backbone of its fashion salesremains core items, which account for 8 percent of all its products,according to data from Edited. This includes wardrobe staples such asown-brand blue and black denim for men and women, Tommy Hilfiger shirts formen, Nike, Converse and Birkenstocks footwear, as well as simple own-brandshirts and blouses. In addition, Asos own Curve and Maternity lines alsooffer a range of core pieces, which continue to sell well.
5. All about the brand mix
Asos’s leading trump card remains its breadth of its brand mix. Asos’sown-brand assortment, which accounts for one-third of all its products,spreads across a range of categories including petite, tall, plus size andmaternity lines. At the same time, Asos also focused on niches, such aswedding, reworked vintage and premium sectors, which help the fashionretailer expand its consumer reach and appeal to a diverse demographic.Asos’s own branded strategy sees the fashion retailer focus on uniqueproduct over price-point, which gives Asos own-house label room to remainprice competitive. Outside of Asos’s own-brand offering, its best sellingbrands remain New Look, River Island, Nike, Boohoo, French Connection andTed Baker, according to Edited.
“Asos’s ability to grow in an increasingly crowded marketplace is animpressive feat, based on a careful combination of factors leading tobottom line growth,” says Katie Smith, Senior senior fashion and retailanalyst at Edited. “By moving quickly to offer a strong depth and breadthof assortments, Asos is viewed as both an attractive and highly convenientretailer to the consumer.”
Photos: Asos AW17 Lookbook
