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ASOS ‘awesome on mobile’ as results show technology drives growth

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ASOS has reported a 26% rise in retail sales and says that mobile is critical to its success – and is part of the IRUK500 Elite retailer’s vision to “fundamentally change the way customers love and shop for fashion”.

ASOS [IRDX RASO] reports revenues of £1.44bn in the year to August 31 – 26% up on the same time last year. Retail sales of £1.4bn were 26% ahead, with UK retail sales up by 27% and international sales by 25%. But pre-tax profits of £32.7m were 31% down on the £47.5m it reported a year ago as the losses and costs connected to its now discontinued China operation reached £10.1m. Before exceptional items, which also included the £20.9m settlement of trademark infringement disputes, pre-tax profits came in at 37% ahead at £63.7m.

But mobile was singled out at the analysts call today as being one of the key drivers of the retailer’s success.

“We now have more than 10m active installs of our app, with 7.5m new downloads during the financial year,” says Chief executive Nick Beighton. “On average, ASOS customers shop on the app eight times a month, spending more than 70 minutes online during that time. As a result, 66% of traffic now comes from mobile devices and 51% of orders are now being placed on our mobile platforms.”

During the year, ASOS launched the brand new iOS ASOS mobile app, which was built completely from scratch using the latest technologies and incorporated a new homepage and design, easier navigation and innovative features such as spotlight search and 3D touch for iPhone 6S users.

“We have also improved the quality of product imagery and the performance of our Video Catwalk function,” says Beighton. “Customer feedback and engagement has been very positive, with the new app earning a 5-star rating in App Stores worldwide.”

As part of its mobile checkout programme, ASOS has also rolled out a brand new localised checkout experience on its Android apps, powered by the new digital platform. This has allowed the retailer to remove third party proxy solutions for language, making the customer experience far more responsive. This feature was introduced to its Russian customers in June 2016, and post year-end deployment is now largely complete across both Android and iOS in all markets.

“We constantly look to improve our mobile offering and during the new financial year, we plan to double investment in this area, delivering a number of initiatives to further improve customer engagement,” says Beighton.

Engaging content and experience

The retailer also understands its customers, said the analyst’s report, and what inspires them and what interests them. ASOS reaches out to them by producing great content, which makes the retailer much more than just a place to shop.

“By becoming a fashion destination offering a unique customer experience, we turn a sale into a loyal customer, who returns to us frequently,” says Beighton. “This is evidenced in our increasing customer engagement metrics, with visits growth of 22%, order growth of 30%, average basket value up 3% and average order frequency up 4%. We exited the year with active customers of 12.4m, an increase of 25% in comparison to last year. “

In the UK, ASOS also launched ‘ASOS A-List’, its loyalty programme, giving customers the opportunity to build up points from purchases which are then exchanged for vouchers for use across its platforms. Customer engagement with ’ASOS A-List’ has been strong and the company is starting to see increases in key metrics such as basket size and order frequency from participating customers.

“We continue to encourage participation across all our social platforms and now have over 19m followers, up 54% compared to last year,” says Beighton. “We always focus on being on the platforms where our customers are and moving nimbly as these platforms evolve. This year we have been testing new formats like Instagram Stories, Facebook Live Video and Snapchat filters and our customers have responded positively. We publish over 60,000 pieces of inspirational fashion and lifestyle content every month to build awareness and brand engagement. Other key highlights this year include launching the first French and German editions of the ASOS magazine, which we sent out to over 60,000 loyal customers in both countries, with a US version soon to follow in November 2016. We have local Snapchat channels going live in Australia, France and Germany and new Instagram accounts tailored to Menswear for France and the US. “

The news echoes research by research from Tryzens, which suggests that shoppers are rapidly changing how they shop, with extra pressure on fashion retailers to adapt to mobile where shoppers can get the sort of experience that they now demand.

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