ASOS PLANS £4BN TURNOVER
Pureplay Asos [IRDX RASO] has set out how it plans to more than double its sales to £4bn a year, after a year in which revenue reached £1.9bn. Fast-fashion trader Asos, a Leading retailer in IRUK Top500 research, said that group revenues of £1.9bn for the year to August 31 were 33% up on the same time last year, or 27% once currency fluctuations were discounted. Retail sales of £1.88bn were 34% ahead. UK sales of £698.2m were up by 16%, while international sales of £1.2bn were 47% up on last time. Pre-tax profits of £80m were up by 145% – or 26% before exceptional items.
Chief Executive Nick Beighton said: “It’s been a great year for Asos, with continued growth in sales and profits. Our international performance was excellent, as we reinvested FX tailwinds and benefitted from our continually improving customer proposition. In a competitive UK market, we achieved strong full price performance whilst further increasing market share.
“At the same time, we ramped up our investment in building the increasingly strong and differentiated Asos proposition. Our new agile technology platform is allowing us to accelerate our pace of innovation with great benefits for our customers, including new payment methods and additional language sites to come. The investments we are making will see us add 1,000 new heads and will lay the foundations for a c.60% increase in unit capacity and c.£4 billion of net sales.”
Here’s what Asos said about how it plans to get there:
Boosting capacity through technology: Asos’ new technology platform gives it micro-service architecture with a native mobile experience through both Android and iOS apps, as well an improved checkout. “The platform allows for significantly greater transaction volume at enhanced levels of stability,” the retailer said in its financial statement. It pointed to the increased ability to deliver technical change and innovation at speed.
During the last year alone it counted 1,300 technology releases, up from 490 the year before. Among them were the roll out of Apple Pay, a reworked My Account section, and new image search capability. In the year ahead it plans still more improvements, including new payment methods, new language sites and stronger customer engagement. Currently it has seven country-specific sites and it plans a further six over the coming year, with an ultimate target of reaching all of its more than 200 markets.
Boosting capacity through warehousing and logistics: Asos is working to double the capacity of its Eurohub 2 fulfilment centre, and is also opening a new fulfilment centre in the US, expected to be up and running by next autumn. It says its investments in logistics will lay the foundations for a 60% increase in capacity and for net sales of £4bn a year.
It has now taken its click and collect service into markets including Italy and the US, where it has a total of 11,000 collection points across the two markets. In the UK it now offers collection from a choice of 9,000 pick-up points. Expansion will continue in France, Germany, the Netherlands, Sweden and Australia over the coming year.
Delivery has also seen improvements, with order tracking now standard in 61 markets, same-day delivery in London, and, to come, evening next-day delivery in Germany.
Boosting sales: Asos says that it still has a “relatively modest” share of online sales, especially in its international markets, and will continue to grow the business “at pace” to take advantage of the global opportunity. In addition, it says that the shift towards online retail will gather pace, and that it is well placed to benefit from that. Already, the online apparel market has, it says, grown at more than twice the rate of the overall apparel market.
Asos is also continuing to develop its own brand clothing, which currently accounts for 41% of its sales. Students are a particular focus for marketing in territories from the UK and the US to Italy and Germany.
Improving customer service: Asos ended its financial year with 15.4m customers – a 24% rise on the previous year. Visits were also up by 24%.
THIRD PARTY LOYALTY AT RAKUTEN
Rakuten [IRDX RRAK] has expanded its loyalty programme to third party retailers, with the effect that Rakuten Super Points can now be earned at partners including Waterstones, Zavvi, TK Maxx, Asos and more than 200 other retailers when shopping through Rakuten.co.uk.
Customers in the UK and Spain will be able to collect and use points towards purchases at third-party retailers. UK shoppers can then use those points to buy credit to use both online and offline at retailers including Tesco, M&S and Currys. Up until now, points could be redeemed against Rakuten services including Rakuten TV, Rakuten Kobo and Rakuten Viber.
Rakuten first introduced its global loyalty rewards programme, Rakuten Super Points, 15 years ago it has proven a success in its Japanese home market, where it has become the most used loyalty point scheme.
“Rakuten is a membership company and Rakuten Super Points are at its centre. Each Rakuten service owes a large part of its success to being part of the bigger Rakuten ecosystem and its over 1 billion members,” said Arjen van de Vall, President Europe at Rakuten. “In Europe, this ecosystem will also be our key to success, and by opening up our loyalty scheme to third party retailers, we are taking a major step towards that.”
JOHN LEWIS REINVENTS THE STORE
John Lewis [IRDX RJLW] has unveiled its latest take on the 21st century customer experience at a new store that puts services at the heart of retail. Services and experiences, from eye tests and nail bars to car fitting advice and technology training, will take up a fifth of the floor space at the new store in Oxford.
Service staff working at a central “experience desk” led by a “brand experience manager” will take a concierge-style role as they help customers plan their day, book them into a workshop, match them with a style or home design adviser, or find them a table in the rooftop restaurant.
Staff from Oxford Playhouse were drafted in to train all the 322 staff at the new store in voice and body language skills. Their new approach to customer service will include hotel-style tours of the store, while staff uniforms will be based on pieces in John Lewis’ own-brand Kin clothing range.
Paula Nickolds, Managing Director at John Lewis, an Elite retailer in IRUK Top500 research, said: “As part of our plans to differentiate the John Lewis brand and to reinvent the department store for the 21st century, our shops continue to be a place where customers come and experience our brand – the physical manifestation of what we stand for.
“More than a route to selling things, our Oxford shop is a place that aims to inspire and delight our customers and is entirely focused on customer experience with Partners and finishing details at the heart of that.”
NEW HIGH FOR SHOP DIRECT
More than half of Shop Direct [IRDX RSDG] sales were made via smartphones for the first time in its latest financial year. The home shopping group behind brands including Very, a Top50 retailer in IRUK Top500 research, Littlewoods.com, a Top100 retailer and VeryExclusive.co.uk, said that 53% of sales were via smartphone, and 69% via mobile devices – smartphone plus tablet – in the year to July 1. A third (32%) of all mobile sales at Very came via its MyVery app, up from 21% a year earlier.
The retail group turned over £1.93bn in the year, up by 3.7% in total, or 5.6% on a like-for-like basis, while pre-tax profits of £160.4m were up by 10.2% on last time.
Shop Direct said its investment in mobile personalisation before, during and after customer journeys drove smartphone sales. Measures included working with Google and Facebook to identify users who look like Shop Direct’s most valuable customers and serving them relevant and timely ads and recommendations. It also applied machine learning to identify customers who are showing signs of lapsing. Those customers were then contacted with an incentive to buy. Machine learning also helped it to predict when a customer would run out of a product by sending a reminder for them to stock up. That approach, it said, had generated “strong results” across beauty products and scented candles.
Alex Baldock, Group Chief Executive at Shop Direct said: “Artificial intelligence is already driving results for us and we’ll soon launch one of UK retail’s first AI-powered chatbots for customer service. Longer term, we believe AI will bring scale to personalisation so digital retailers like us can be every bit as personal as stores. Very Assistant 2.0 will be another step closer to us democratising the personal shopper.”
MAPLIN EXTENDS EXPERIENCE ONLINE
Maplin [IRDX RMAP] is working to take its in-store service online by improving its flexibility and customer choice. The technology business, a Top100 retailer in IRUK Top500 research, is working with Ensono on a new digital offering, which includes both moving all appropriate applications to the SAP Hybris commerce platform while also moving mission-critical services to Amazon Web Services (AWS).
The move represents a shift to the cloud for Maplin and one that it is expecting to make it more agile in responding to the changing demands of the retail market, helping deliver better customer service. That should also help it to meet spikes in demand in the Halloween to Boxing Day quarter.
Omnichannel retailer Maplin sells 30,000 products across 800 technology categories and prides itself on the advice and information it can offer its customers in the store. Ensono was selected to help take this experience online. Since the work started, Maplin has achieved its aim of shortening its release cycle.
Alan Kay, Director of IT at Maplin said: “This is the first time we are moving mission critical applications into AWS, which made it necessary to work with a partner that not only has the technical knowledge and experience but really understands our goals in the hyper-competitive retail market. We needed a partner that can help us truly deliver the best customer experience. Ensono proved itself to be just that partner, and we have been extremely impressed with their speed of delivery and how the Ensono team has integrated with ours.”
Paul Morris, Europe Managing Director, Ensono, says: “We’re pleased to be working with Maplin on realising its vision to provide its signature instore first-class customer experience to today’s multichannel retail environment.”