Mobile, social, technology and logistics were key themes in Asos’ [IRDX RASO] half-year results, out today. Here’s what the pureplay, a Leading retailer in IRUK Top500 research, said about its strategy in those areas as it reported half-year retail sales of £889.2m, 38% up on the same time last year. UK sales of £340.8m in the six months to February 28 were 18% up on last time, while international sales of £548.4m were 54% ahead. Pre-tax profits of £27.3m were 14% up.
Chief executive Nick Beighton said: “Given the current momentum we are seeing, ASOS is making good progress towards its ultimate goal of becoming the world’s number one destination for fashion-loving 20-somethings.”
Asos’ aim is to be “awesome on mobile”, which it defines as an “enjoyable and frictionless shopping experience”. During the half-year it completed its roll out of a new mobile checkout across Asos’ digital channels.As a result, it says, it offers a “cutting-edge customer experience designed and developed with a mobile-first approach, using the latest technologies to provide a new, seamless checkout exerience for our customers.”
Over the six months, Asos saw a 28% increase in daily app downloads. It says its customers visit apps an average of eight times a month, and spend a total of 80 minutes on them. Mobile devices now account for 70% of Asos’ total traffic, up from 60% a year earlier, and 58% of all orders.
The retailer now plans to update the Asos Android App, and to launch Apple Pay on the iOS app and on its mobile web. Updates to apps will include a new My Account section, that brings together order history, delivery and returns.
Social is key to Asos’ work to engage its 20-something audience across channels, using emotionally-engaging content and experiences. It says both follower numbers (+25% to 21.3m) and engagement have grown in the last six months: visits are up by 27%, average order frequency is up by 4% and average basket value by 3%. Active customer numbers are now at 14.1m, 29% up on last year, including 5m active UK customers.
Asos says it has been an early adopter of emerging content formats such as shoppable Instagram stories, Instagram Live, Facebook Live, Facebook Canvas and Snapchat lenses across key channels. This approach, it says, is “enabling us to connect with our audience in a way that feels fresh and evolves as quickly as the platforms themselves.” It says average views per video or broadcast are now above 100,000, while the Asos Snapchat Black Friday lens reached 32m people, and the launch of advertising on Instagram Stories reached more than 13m people.
Another key channel for Asos is the Asos magazine, which was sent to 100,000 readers in November 2016 and is, says Asos, the highest circulation fashion magazine in the UK. It is also available in France, Germany and the US.
Asos is now a year into its A-List loyalty programme, which now offers a dashboard where customers can track their status and loyalty points. Asos says it is testing customer reward levels, different ways to earn points and different delivery options at checkout.
The retailer also promises best-in-class service to its customers, and currently offers that on social media, live chat, email and over the phone, 24/7 using languages that are local to English, French, German, Spanish, Italian and Russian customers, with local language speaking support also available in Dutch, Korean and Mandarin. Asos says it answers emails in an hour, social media enquiries in 15 minutes and the telephone or live chat within 30 seconds. Facebook Messenger has also been introduced as a contact channel for all key markets. It is moving its customer care division from Hemel Hempstead to a new site in North Watford by the end of this year.
Asos says it is focusing on improving its delivery and returns and providing a best-in-class customer proposition. In the UK it reduced standard delivery times from four to three days, and rolled out Click and Collect to all Doddle locations.
Internationally, it extended free returns to Hong Kong, New Zealand and Switzerland, and now tracks deliveries to Switzerland, Finland, Slovakia and Slovenia, and to 10 more countries via standard mail. Australian customers can now change their delivery options in transit, while customers in 22 European markets can now use DHL on demand services for next-day delivery. Standard delivery and express delivery times have also been improved in many markets, while Swiss customers no longer have to pay import duty thanks to a new delivered duty-paid solution. Next day deliver to store was launched in Denmark, a service that will be expanded in the UK and other markets.
These improved international deliveries are built on improving warehousing facilities. A second European distribution centre, Eurohub 2 launched and is set to play a key part in Asos’ global fulfilment strategy, fulfilling all orders to Germany, France, Spain and Italy. Some 25% of US orders are delivered from the US, with the remainder sent from the UK. Asos is now looking for the best location for a US fulfilment centre.
Asos also invested in its technology over the six month period, rolling out a new digital platform across all markets in time for the Black Friday peak trading period. The retailer said in its statement: “Our new platform is the backbone of our entire customer experience on our site and apps; it is fast, it is reliable and it is flexible. The new platform delivers our micro-service architecture with fully native mobile checkouts in our android and iOS apps, and a vastly improved checkout on desktop and mobile web. Our new platform handled record volumes of transactions during our peak trading period which at one point reached 33 orders per second.”
The new platform, says Asos, enables it to innovate and introduce new technologies at pace. First-half updates including the introduction of Klarna payments in Norway, Sweden and Finland, and Premier in Spain and Italy, as well as improving the quality of video and image zoom functionality.
New fulfilment software will allow the retailer to control which country sites have access to which stock pools as well as improve its delivery proposition for each over the coming year. End-to-end merchandising and planning systems are being introduced for retail teams, and the retailer will also personalise customers’ experience across sites, while also improving navigation and order tracking. New payment methods, sites, delivery propositions and languages are also set to be added. The retailer’s personalisation team is exploring how machine learning and artificial intelligence might help in this.
Imvestment is also going into customer data, via a 360 degree customer view, and online customer feedback.
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