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Asos reports fast growth in sales as it engages more customers, via mobile and social

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Asos today said it was winning more business from more customers as it reported fast sales growth. But while mobile and social helped fuel “exceptionally strong” customer engagement, investment in warehousing and staff meant profits grew by a modest 1%.

In the next six months the fast fashion retailer is to launch a new loyalty scheme that enables customers to collect points and unlock rewards. Asos Rewards will initially launch in the UK.

Asos unveiled revenues of £1.15bn in the year to August 31, 18% up on the same time last year. Retail sales of £1.2bn were 17% ahead while pre-tax profits of £47.5m were 1% ahead.

Some 60% of traffic came from mobile devices over the last year, while 44% of transactions were placed on mobile platforms. During the year the fast-fashion retailer launched localised Android and iOS apps in overseas territories including China and Russia. It also ran its first mobile-only promotions and optimised its checkout for mobile.

The company highlighted the importance of talking to its customers over social media. Asos has more than 12m social media followers, and publishes more than 2,000 pieces of fashion and lifestyle content a month. That happens in foreign markets as well as at home: French and German YouTube and Instagram accounts have been launched in the last six months, while Asos stylists also operate over social in these markets, with the aim of inspiring and helping customers. These stylists now have a collective following of more than 850,000 customers.

Delivery was also an important point of customer service, and membership of Asos’ Premier Delivery membership scheme, in the UK, US, France, Germany and Australia, rose by 63% during the year, compared to the previous year. The cut-off for ordering for next day delivery was extended to midnight six days a week, and that for next-day delivery for Sunday to 5pm. Customer returns to Doddle stores and Hermes Parcel shops, InPost lockerboxes and home collection returns were also launched.

A click-and-collect trial in partnership with Boots is now operating in more than 30 stores, with plans to add a further 70 stores over the next year. Next-day delivery is available to customers in 10 European markets, and 38% of EU orders are now delivered from the Asos Eurohub in Germany, while its Polish returns processing centre handles nearly all returns from the EU. A Eurohub warehouse is now being built near to the Eurohub distribution centre, while in the UK investment has continued into the Barnsley warehouse.

Nick Beighton, reporting his first results as chief executive, said the figures showed “encouraging progress.”

“We are attracting more customers with a continued expansion of our delivery proposition and mobile offerings,” he said. “Customer engagement has been exceptionally strong, with increases in average order frequency, basket size and value. We now have 9.9m active customers, up 13%.”

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