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Asos invests in logistics and technology to drive profitable growth

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Asos today said investment in product, delivery and price had driven a 26% rise in retail sales during its latest financial year. It said resources would continue to go into both logistics and technology – with a doubling of spending on m-commerce – as it focuses on improving the customer experience, while growing sales and profits.

Asos, a leading retailer in IRUK Top500 research today reported group 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.

Chief executive Nick Beighton said he was pleased with the progress in the business. “The strength of these results reflects our unwavering focus on delivering great customer experience, supported by rigorous execution of our investments. We continue to target our growth opportunities, so we’re accelerating investment in both logistics and technology. The pace at ASOS is continuing in the new financial year, which we are looking forward to with confidence.”

Customer engagement was strong, said Asos, with active customer numbers up by 25%, average basket values up by 3% and average order frequency up by 4%. Social media followers grew in number by 54% during the year.

The retailer said that 66% of online traffic now comes from mobile devices, with 51% or orders coming via its mobile platforms. Asos shoppers that buy via its app, now used by more than 10m active customers, do so up to eight times a month, spending more than 70 minutes online during that time. A new iOS mobile app now features spotlight search, and 3D touch. A new mobile checkout has been introduced across its markets on both Android and iOS. Asos now plans to double its investment in mobile.

In logistics, the retailer introduced a four-hour estimated delivery window for standard delivery and returns collections and extended order deadlines for click and collect and next day delivery. Using a new ‘Precise Delivery’ service, customers can select a one-hour delivery window.

Internationally, it introduced unlimited free next-day delivery to both home and store for French Premier customers and free next-day delivery for German and Northern Irish Premier customers, as well as next-day delivery in 14 additional EU countries, including Austria, Cyprus, Finland, Greece, Luxembourg, Portugal and several Eastern European countries, in a move that makes next-day delivery available to all 29 EU member states. Free returns have also been extended to the whole of the EU, and to Australia.

Premium express services are now available in 66 new countries, with the cost reduced in several countries.

There is now planning permission for the company to expand its Barnsley warehouse, while its European operations continue to expand both in its German Eurohub and in a second, Eurohub 2, building.

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