How Asos continues to a retail success?

While the luxury goods sector continues to grapple with the economic downturn, at least one fashion retailer is laughing all the way to the bank. Yesterday, the online boutique posted a 59 per cent rise in first-half profit which, even in boom time, would be impressive, but given the current climate is nothing short of miraculous. By contrast, and only last week, Next – Britain’s second most successful retailer, warned that its customers will face a double-digit price rise, owing to the inflated costs of materials.

When Asos was launched, in June 2000, its initial USP was to come up with copies of celebrity looks everywhere from the red carpet to the streets of LA. The name originally stood for As Seen On Screen, although it has since worked hard to shake that off. It was aimed squarely at A-lister-obsessed teenagers who could snap up the gold Burberry dress Sienna Miller wore to the Met Ball in New York, say, or the purple Miu Miu design that Lindsay Lohan chose for the MTV movie awards, for not much more than £20. Nearly 17 years later the neat twist is the reversal of Nick Robertson and Quentin Griffith’s original concept.

The Asos business model is an interesting mix of careful product curation and editorial content embraced by the global fashionista community. We will now examine how community, curation and content all contribute to the business model and value proposition of Asos.

With nearly 3.5 million likes on Facebook alone, Asos has become every true fashion lovers’ friend. Add Twitter, Instagram, Pinterest and Google+ and you start to gauge the scale of Asos’s social media reach which, not surprisingly, is a ‘built-in’ feature of Asos. They are social media transformers: agile, nimble and comfortable with fashion lovers doing much more than simple online transactions.

Asos’s target customer wants to belong to a community that shares fashion tips constantly, is on trend, is willing to experiment with their look, and uses the online community to help them to look their best strutting in the latest fashion. By creating an integrated set of platforms, Asos has been able to offer a 24/7 fashion lifestyle that is engaging, welcoming – and very sticky. All platforms direct traffic to the main site, which has become a living fashion co-creation space, which injects the Asos value proposition across the globe from China to Russia and beyond. Asos claims that nearly 40% of their official website page views are generated by social media, which shows it is an integral component of all stages of the customer journey, from awareness to purchasing and customer care.

Today Asos offers 75,000 lines, covering over 850 brands and combining high-street and luxury products, new and second-hand items. This would make even Vogue’s editor-in-chief Anna Wintour’s head spin, and that is exactly why Asos has become so adept at product curation and editing, quietly removing ranges not fitting their proposition. They are brave with new initiatives but also know to remove them when they do not add value to the overall portfolio.

The online retailer’s ability to interpret fashion has moved on significantly from the early days when Robertson struggled with selling long, black leather jackets before theming them ‘Matrix’ and then seeing them fly off the garage shelf in no time. Today, Asos has built a strong own-label range to complement their comprehensive brand offering for targeted customer segments – ranging from Asos White for the less price-conscious customer to Asos Curve, Maternity, Petite, Tall, and so forth, thus capturing a wide array of consumer tastes and budgets. Last year alone, Asos’s own brands were 53% of overall sales, proving that having a solid offer in their own product category is a cost-efficient way to respond to fast fashion trends due to shorter lead times in commissioning and distributing new private label designs.

Whereas Vogue was the source for fashion advice and information in the 90s, today’s fashionista turns to numerous blogs, Pinterest, Instagram, Tumblr – and now Asos – for the latest insight into fashion through posts, competitions, games, news and feature articles. The combination of a great product and relevant content seems to be Asos’s winning recipe, advertised either through its own print magazine and daily editorials online or inspired by and co-created with the wider community of Asos users, across all forms of social media platforms and the Asos’s Fashion Finder section. The intention behind celebrating this fashion lifestyle is to drive traffic to the main site and deepen brand engagement, encourage advocacy and loyalty, and ultimately boost sales. is brave with its brand, giving the audience permission and encouragement to make their own mark (or even sell their own clothes!), all under the Asos banner. Today, the website rewards those community members who contribute the most; and these role models are rated and celebrated by their peers. However, the interplay between in-house editors, writers, bloggers and other community members is a carefully orchestrated performance where Asos is in charge. While bloggers increase the credibility of the platform substantially, Asos is the gatekeeper for what will take centre stage (keeping in mind that content comes before the product), making sure that the customer will love Asos’s suggestions.

So in the crowd of online shopping behemoths like Amazon and offline shops entering onto the online space, Asos continues to stand out. The secrets of their success is no particularly special but the combination of which coupled with a devoted implementation has made it a success. The question remains if they can continue this moving forward. Keep shopping.

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