In today’s InternetRetailing newsletter, we’re reporting in the week that Asos bought Topshop, Topman and Miss Selfridge and in so doing took a significant slice of UK high street fashion online. The deal, which does not include any of the retail brands’ 70 shops, is part of Asos’ ambition to the number one online retailer for its target market of 20-something fashion followers. Most (85%) of Asos’ sales are made via mobile – and the retailer aims to use the brand awareness that these brands already have to boost its own online success. The assumption is that 20-something shoppers don’t need to go to shops to buy clothes – and certainly they have little choice in a pandemic. But clothes shops are all about trying things on and seeing what looks good on. If shoppers are now to buy from home, then the bedroom is the new fitting room. Clothing retailers that mostly sell online must expect high levels of returns and have the systems in place to deal with that. Before Covid, online brands from Swoon to Boden teamed up with department stores to sell their goods through concessions. Doing so increased their brand awareness and boosted sales. In the longer term, we predict a post-pandemic return to the high street for more online-only brands. It’s likely such a shift will start out cautiously, with fewer stores and following adjustments in the cost of retail space. But multichannel selling remains an opportunity that most retailers won’t want to shut down long-term.
Two other acquisitions - both in the US - are in the news this week. THG has bought US skincare specialist Dermstore, while JD Sports has bought US athletic footwear retailer DTLR. The US market is also cited as a strategic reason for Asos to buy Topshop and its sister brands. Are UK brands shifting to US-led international strategies in the wake of Brexit?
If so that’s likely to be as the realities of the post-Brexit EU/UK free trade agreement become clearer across industries. Fashion retailers and brands this week join an industry call for the government to mitigate the effects of the deal.
We’re also reporting as buy-now-pay-later providers welcome the government’s decision that the sector now needs to be regulated following fast growth over the last year.
Today’s guest comment comes from Hamza Khan of McKinsey & Company, who has advice for retailers looking to improve their ecommerce growth in a pandemic.