Asos says it’s set to achieve its plans to reach £2.5bn of annual revenues two years early. The retailer, a Top50 retailer in IRUK Top500 research, reported group revenues of £2.4bn and retail sales of £2.3bn in the year to August 31 – both up by 26%. Sales were up both in the UK (+23%) and internationally (+27%), while pre-tax profits of £102m were 28% up on last time. Its retail sales grew by more than 20% for the third year in a row – so what is Asos doing so right? We took a look at its full-year report to find out more about how the retailer is investing more while improving the service its customers get – and winning more sales at the same time.
In its chief executive’s words
Chief executive Nick Beighton says the growth has come with record levels of investment. Financial and customer key metrics have all been in positive territories. “Asos is moving fast and is as differentiated as ever,” he said. “The potential for our business is huge and we remain focused on building Asos into the world’s number one destination for fashion-loving twentysomethings.”
Changing UK loyalty
Asos enjoyed what it says was an “outstanding year” in the UK, which was “all the more pleasing given the widely reported difficult trading backdrop. It had 15% more active customers than it did a year before. Notably, the retailer closed its A-List loyalty programme in the UK and says it is now changing to a more global loyalty programme, focusing on its Premier Delivery subscription: customers have said they value this.
Visits to Asos’ websites grew by 19% year on year, while average order frequency was 7% up. Around the world, 18.4m customers bought from it – that’s 19% up on the previous year. Asos has focused on engaging with the student community around the year – student customer numbers were 31% up on last time – and on social media. Its Instagram Stories were viewed 244m times during the year, while overall social media followers grew by 13% to 22.7m. It boasts being the first brand to launch on Instagram Shopping in multiple currencies, while it also worked with the social media platform to launch a geo-targeted shopping feed.
Asos updated its technology through 2,900 releases (up from 1,300 the previous year), which included new customer features and shopping experience changes. Visual search extended to international customers, and changes to recommendation algorithms boosted its personal recommendations and increased personalisation on the homepage. Localisation was enabled both on the rest of the world and rest of Europe sites, while new sites were released for the Netherlands and Sweden.
Operations and logistics
The retailer expects to fulfil all of its US deliveries from its Atlanta warehouse over the coming year. It is also extending its Euro hub and Barnsley warehouse sites. The extra capacity comes as Asos has launched new delivery methods and extended cut-off times around the world. It now delivers same day to Birmingham and Berlin, and next day orders to the EU can be placed until 4pm. Click and collect was launched in Russia and extend in the Nordics and Poland.
Image courtesy of Asos