LONDON, ENGLAND – ASOS recognize the value of celebrity influencer endorsements
If you believed the headlines, you might have been forgiven for thinking that ASOS is in trouble. Even its CEO Nick Beighton admitted in this weeks’ full year annual results, “there remains lots of work to be done to get the business back on track.”
So what’s behind this?
The full year results laid bare the challenges which ASOS have been facing in propelling itself to become a major global player. Operational issues on-boarding new warehouses in Atlanta and Berlin significantly hampering its efforts.
Our focus now shifts to ensuring that we enhance our capability to drive an improved customer experience and leverage the benefits from the investments we have made
Surely a 13% uplift in sales is cause for celebration? Beighton admits that they took their eye off the ball and this had an impact on sales and customer engagement. However, the bold steps taken now are likely to pay off in the medium to longer term. Legacy fashion retailers, take note.
Because over 60% of ASOS revenue now comes from international customers and therefore it was vital to build a robust global logistics platform. The capital investment required to do so inevitably meant that profits fell from the heady days of £100 million to a more modest £33 million.
But encouragingly, investors were quick to realise that the steps being taken were the right ones with shares soaring 16% on the news.
With the operational issues now hopefully behind them, a renewed focus on the customer is a stated priority, for example, homing in on the continued improvement in presentation and social media engagement for the next fiscal year.
Too often in retail these days we learn of short term behavior with owners stripping the organisation bare of all its assets without a thought for the future sustainability of the business.
It’s therefore gratifying to see one retailer who was once the darling of the markets, not afraid to take the brave steps necessary to ensure the future of a business in what is an increasingly competitive marketplace.
In today’s world, for ASOS the days of £100 million plus profits might be a fading memory, times have changed almost out of all recognition even in the last five years, but instead of a failed logistics implementation, perhaps this should be seen as an object lesson in good retail management.
Instead of pinning the blame on online for their woes, one which perhaps many on the high street wou