It was a Perfect Storm: 2017 rocked the retail industry with unrelenting waves of new market pressures. Amid digital transformation, retail companies had to navigate store closures at a rate more than triple that of 2016, a running tally of retail bankruptcies and an over-reliance in discounting to lure customers – just to survive. Even now, it still seems with each passing week, there’s yet another challenge to keep brands and retailers on their toes. It’s clear the sector is struggling.
Yet, amid all this drama, UK-based apparel retailer ASOS is bucking the trend. The company recently defied retail gloom to post an impressive 23% sales jump. Demonstrating astounding agility, ASOS can produce merchandise in 2-4 weeks, compared to 5 weeks for Spanish fast-fashion giant Zara.
Fast fashion is starting to look slow now with ASOS’s ultra-fast fashion. Now even industry experts are wondering: Is Zara being left behind?
A Sprinting Giant
Admittedly, there’s no size comparison between the two retail rivals. Zara’s revenue of $17.2 billion far exceeds ASOS’ $2.6 billion. However, no matter how hard Zara is trying, ASOS has a leg up on online retail, boasting a 27% growth rate, compared to 9% for Zara’s parent company Inditex and ASOS outperforms Zara for visitors among the leading global fashion apparel e-commerce sites.
How is ASOS doing it?
Streamlined supply chain means serious speed
Consumers need speed; they crave fast (and free) shipping worldwide & ASOS delivers. Its same-day and next-day delivery locations multiplied over the past year. While Zara is world-renowned for its supply chain excellence, ASOS also excels in this area. Establishing regional hubs in key markets like France, Germany, Italy and, Spain shortens ASOS’ supply chain, which improves agility. The retailer also prioritizes warehousing and delivery, and these distribution efficiencies helped ASOS ship to several global destinations within 48 hours. The convenience of fast service appeals to consumers
One giant shopping mall
Variety is always in style at ASOS. Its e-commerce website assortment runs both broad and deep, designed with a diverse array of young adults in mind. The super-vast catalog spans petite, tall, plus size and maternity lines, and niches include wedding and vintage assortments. It’s a convenient one-stop e-shop.
Prices start at the cheaper end with ASOS-owned labels. Two-fifths of sales are private label, which gives ASOS greater control over its supply chain, including cost efficiency and speed to market. At any moment, ASOS has about 85,000 products in stock.
Further along the pricing spectrum, ASOS offers a wide range of branded goods like Adidas at different price-points. To reinforce its leadership as a savvy fashion influencer, ASOS also focuses offers stand-out, exclusive products, which are usually priced higher than the rest of the assortment, up to the $200 bracket.
To align with its broad audience, ASOS’ marketing campaigns are woke – enlightened and relevant – touching the issues the retailer’s customers appreciate . The campaigns reflect diversity and inclusiveness, including a wide range of ethnicities. Its enlightened campaigns infer that ASOS’ culture aligns with younger, values-driven consumers who are driving the movement toward conscious capitalism and respect for individuality and authenticity.
The company also remains relevant through careful curation by people of the same age as ASOS’ target group to resonate among its customers. Social listening also helps ASOS stay on top of trends. Its funky, fashions and marketing strategy consistently encourage customer participation and earn word-of-mouth through social sharing.
Try before you buy (and pay later)
To boost consumer confidence and decrease their risk of ill-fitting appareal, ASOS allows online shoppers to pay only for items they keep (rather than pay for an an entire order up front and then wait for a refund on returned items).
Similar to Amazon Prime Wardrobe, ASOS lets mobile app shoppers only pay for items they keep by selecting the “Pay Later” option to get 30 days to use either their credit or debit card to pay for the items they want.
As ASOS CEO Nick Beighton “Twentysomethings play their debit and credit card cashflows, so being able to try on fashion without being charged is a much better scenario for them.” This customer-friendly policy helps ASOS deliver a superior customer experience, which increases brand trust and consumers’ willingness to buy.
Keeping it fresh
As ASOS declares “newness drives the business.” Its focus on “new and now” is apparent, as 41% ASOS’ current product assortment arrived in store over the last three months. To keep its merchandise hot, fresh and trendy, the retailer launches 5,000 new products on its site each week.
The power of now matters – especially in fast fashion – as McKinsey found consumers have raised expectations of customer experience, including greater scrutiny on newness.
Planning it right
To gain an edge over its fast-fashion rivals, ASOS also times the drop of its on-trend merchandise. Rather than launching singular styles, the retailer waits until it has a full assortment of a hot trend before dropping all the products in one go. Why wait? ASOS can maximize the market impact it makes by giving consumers a complete look with strategic (versus random) assortments. Offering a complete assortment can also enhance ASOS’ reputation as a leader in emerging fashion trends.
It’s not about being the cheapest
Don’t let the “fast-fashion” tag fool you – not everything at ASOS is cheap. As mentioned, ASOS offers a range of offerings, including lower and higher price points for select affordability. Rather than blending its latest products with stock it wants to reduce, ASOS partitions discounted items into a separate “outlet” section, which accounts for nearly 18% of its total offering. This way only the most ardent shoppers will know to look for outlet sales, as well as promotions and email discount codes.
What is ASOS doing right?
Ultimately, there’s no one-off trick. ASOS is triumphing as an ultra-fast fashion leader through a combination of well-designed strategies on multiple fronts.
The company uses an inclusive, consumer-centric strategy to sell a broad assortment of apparel to younger shoppers. ASOS offers full assortments at a range of prices and lets shoppers pay later. ASOS keeps production close to its headquarters and key customer markets. As a pure-play e-commerce retailer, ASOS avoids warehouse-to-stores roadblocks and delivers a fast, seamless online customer experience. ASOS focuses on the power of now to stand out from rivals. Its agile, collaborative network delivers ultra-fast fashion that reflects the times and emerging consumer trends. Leading with these strengths helps ASOS conquer the challenging apparel market – and accelerate the pace of fast fashion.
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