Asos success story has tech investment at its core
Asos has reported that pre-tax profits for the year to 31st August rose 28 percent to GBP102 million (US$133 million), with revenues climbing by 26 percent to GBP2.42 billion (US$3.13 billion).
The online fashion retailer’s long-term goal has been revenues of GBP4 billion (US$5.2 billion). But Chief Executive Nick Beighton now has his eyes on “a significantly bigger prize”. The plan is to continue to invest as the opportunity, both in the UK and abroad, remains huge.
The company splashed out GBP242 million (US$313 million) over the financial year, mainly on warehouse and IT, and will stump up GBP250 million (U$323 million) a year over the medium term.
Its tech capability continues to go from strength to strength, demonstrated by 2,900 tech releases during the year vs 1,300 in the prior year.
Improvements included new sites, new languages, improved recommendations algorithms, and its first meaningful move into AI-driven conversational interfaces. Recently, Asos also took its first step into voice apps with a launch on Google Assistant.
Customers in the UK and US can initiate conversation with Enki, the Asos shopping guide, by saying “Hey Google, talk to Asos” to their Google Home smart speaker or Google Assistant app on Android or iOS.
Using their voice or text, Enki will help them discover and shop the latest products across six of Asos’ top womenswear and menswear categories. The pureplay will be using customer feedback from the initial launch to explore ways to refine and enhance the experience over the coming months.
The right balance
Steve Jobs famously said: “We need to start with the customer and work backward to the technology”. Many retailers consistently fall down on customer service whilst wasting money on tech for tech’s sake.
Asos considers itself to be as much a tech company as a fashion company. And it has also built the whole company around the customer experience.
So, what next for Beighton and company? Perhaps we will see the opening of bricks and mortar outlets, following in the footsteps of Amazon which is gearing up to launch its first Amazon Go store in California.
It currently has five of these stores in play, three in Seattle and two in Chicago (with another one coming to the Windy City in the near future) and, in addition to San Francisco, it is looking at New York.
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Are customers missing the retail experience?
A new Barclays report into the UK fashion retail space shows that brands successfully leveraging their bricks and clicks presence are dominating the market, with sales growth of 3.4 percent over the past two years.
On average, 11 percent of fashion sales (online and in-store) were returned, with the yearn to return having the biggest impact on online players. The analysis revealed that younger customers (25-49) prefer an omnichannel experience, rather than exclusively online, reflecting the popularity of shopping as a leisure activity.
A spokesperson for Asos told TechHQ that no bricks and mortar plans are in place. But, as the Barclays research shows, a physical move would in many ways make sense as the company shoots for GBP4 billion in (US$5.2 billion) revenues and beyond.
3 February 2023
3 February 2023
3 February 2023