Founded in 2000, UK-based ASOS has grown to become one of the world’s most successful online fashion retailers. In 2015, ASOS had ~10 M active customers, 60% of whom were located outside the UK. The site attracted 90 M visits in August 2015 alone, up 20% from August 2014. From last year, revenue increased 18% to £1,119 M, accompanied by a 19% increase in gross profit. It seems that ASOS is well on its way to achieve its goal of becoming the #1 online fashion destination for twenty-somethings.
ASOS sells its broad range of apparel, accessories and shoe wear strictly through its online channel. The site also hosts a Marketplace through which individual designers can set up boutiques to sell their new and used fashions. ASOS collects £20 monthly rent and 20% commission on sales from these boutiques. Additionally, ASOS receives advertising income from its site and fashion magazine.
ASOS’ success stems from its deep understanding of its consumers. The company’s business and operating models allows them to give these young fashionistas exactly what they want, when and how they want it.
With a presence in 240 countries and territories, ASOS invests heavily in creating a robust delivery system. The company offers free 24/7 worldwide delivery for all orders above £15, and free returns in the US, UK, France and Germany. UK customers also enjoy a comprehensive pick-up/drop-off network and home collection returns.
ASOS’ broad product mix is another key source of differentiation. Customers can browse through 800 different brands and over 80,000 products, with 3,000 new lines added each week. Product offerings include women’s wear, menswear, swimwear, shoes, accessories and beauty. ASOS also retails its own brand that includes label lines like ASOS Curve, Maternity, Tall and Petite. With such diverse stock, ASOS ensures that every customer is satisfied.
Importantly, ASOS provides an engaging omni-channel community where fashion lovers worldwide can connect and share. Each of ASOS’ nine local language sites showcase brands tailored to each market and publish daily fashion content. ASOS also publishes a magazine with a circulation of 525,000 (hard-copy and digital). As 60% of traffic and 44% of purchases come from mobile, ASOS offers a mobile-friendly website and convenient Android and iOS apps in certain markets. These apps include personalized product recommendations. Additionally, ASOS boasts 3.8 M Facebook likes, 885K Twitter followers and 3.3 M Instagram followers, as well as YouTube channels in English, French and German. Consumers can follow, read, share and shop ASOS whenever, wherever.
ASOS’ comprehensive distribution system allows it to continuously provide efficient delivery and hassle-free returns. Located in Barnsley Yorkshire, UK, the company’s central distribution warehouse is over 450,000 square feet and has a capacity of 22 M units. While most stock is currently stored here, ASOS plans to hold increasingly more items in regional distribution centers around the globe. Specifically, their “Eurohub” warehouse in Berlin presently dispatches about 40% of all EU orders, while a warehouse in Ohio handles about 25% of US orders. They also have warehouses in Sydney, Shanghai and Poland to process local returns. Additionally, offices in North London, New York and Lille, France allow ASOS to remain locally present.
In 2015, ASOS launched a new “merchandise picking solution”, a warehouse control system that automates the stocking and retrieval processes to improve warehouse efficiency. Under this new system, warehouse employees work in teams within a specific zone of the warehouse. Rather than filling a single order from start to finish, the teams work on a number of orders and retrieve only items from within their zone. This process reduces employee travel time and labor cost per unit, and increases employee utilization, order throughout-put rate and accuracy.
To remain competitive in its different markets, ASOS uses a zonal pricing technology. This system helps ASOS price brands in line with local competition.
Omni-channel customer engagement and service is a strong priority for ASOS. The company has a 200-person customer care staff that is available 24/7. The staff has capabilities in 5 different languages and can communicate with customers via email, Facebook, Twitter, phone, website, Google+, Instagram and YouTube.
ASOS demonstrates that clearly aligning your company’s operational priorities with solutions that address your consumers’ needs is the path to success.
ASOS Annual Report