ASOS MARKETING STRATEGY

JONNA JARVENPAAj.jarvenpaa1@fashion.arts.ac.uk

TABLE OF

CONTENTS

ASOS MARKETING STRATEGY - IN THEORY AND PRACTICE..................3

ONLINE SHOPPING.......................................................................................................3

ASOS’S STRATEGY....................................................................................................4

MARKETING MIX........................................................................................................5

Product...................................................................................................................5

Price.......................................................................................................................5

Place.......................................................................................................................5

Promotion...............................................................................................................5

SEARCH ENGINE OPTIMISATION – UK.......................................................................8

INTERNATIONAL EXPANSION – FINLAND CASE STUDY.............................................9

Gaining Visibility in Finland...............................................................................10

SWOT ANALYSIS OF MY SKILLS.............................................................................12

References................................................................................................................13

ASOS Marketing Strategy - In Theory and Practice

ASOS is the UK’s largest independent online fashion and beauty retailer offering around 25,000 branded and own label fashion lines across womenswear, menswear, childrenswear, footwear, accessories, jewellery and beauty.

ASOS targets fashion conscious 16-34 year olds and attracts over 5.4 million unique visitors a month. As at 31 May 2009, it has 2.4 million registered users and 1.2 million active customers, who they define as people who shopped at asos.com in the last 6 months.

Online shopping

Only 6% of the UK clothing market is currently online, but this has doubled in just three years to £3 billion. It is expected the market to double again by 2014. Moreover, with minimal effort thus far, ASOS is already gaining 30% of its sales from international markets. The introduction of country and language-specific websites should see ASOS maintain a near triple-digit growth rate internationally.If International growth allows ASOS to continue to maintain its current growth trajectory, the business could have over £800 million of sales in 2014. Even then, it would have just 0.3% of the European clothing market.

(Source; Company Data)

International sales (now to 114 countries) already account for c.30% of the group total. Yet, beyond finding suitable shipping providers and basic currency translation, little has been implemented to date to actively grow this business.

ASOS’s Strategy

Choice“We offer our customers the latest fashion with a target of over 30,000 options. This will be driven through both own label and branded products.” Presentation “The ASOS website is our shop window and we will continue to develop it to ensure that our customers enjoy their time on the site and find it easy to find their way around it.“ Service“We will increase the number of delivery options available to our customers.”

ASOS clearly takes the service element of the business seriously. For example, at the moment, ASOS offers e-mail and text alerts to inform customers of deliveries, 85% of the orders are trackable, customer care is available 24/7, standard delivery promise of 2-3 days and same day delivery in London. ASOS also recently introduced free returns to its UK customers. (Source; ASOS annual report 2009)

(Source; Company Data)

As an online company, ASOS’s very existence and presence is marketing and its corporate culture must be so heavily based on marketing compared with its brick and mortar peers. Whereas retail stores can attract passer-by consumers at a minimum, ASOS and online retail stores need to rely on their integrated marketing strategies.

Marketing Mix

ProductASOS offers over 850 different brands for the online consumer of various qualities. With scale ASOS has recently been able to introduce tiered product architecture on its own-label lines, which should increase product appeal to a wider customer base. It now has a premium ‘ASOS Black’ label in addition to its original ASOS label. Its branded lines have also been extended and dedicated Designer and Outlet (clearance) areas added to the website. In the future, with scale ASOS could choose to reinvest in quality as well as/instead of price. ASOS offers nearly every type of fashion product available and for women, men and children.

PriceASOS aims to offer own-label clothing “of similar quality to Top Shop, but 10-15% cheaper”. On its own-label lines ASOS should achieve better cost pricing as it grows in scale. Additionally, its lower operating cost structure should allow it to price competitively versus store-based peers. On its branded lines where pricing is strongly guided by the suppliers, ASOS’ pricing advantage comes from lowering the cost of deliveries (and returns), which can be funded from operating leverage and scale.

PlaceThe Internet is the home of the company as an online store, UK, however is the company’s biggest end-market although it ships to 114 countries. Continental Europe is ASOS’ largest International market today, representing 70% of overseas sales.

Given that ASOS is not the only multi-brand site for fashion clothing, it is essential that the customer shopping experience is easy and convenient. Internet website operators generally are becoming more sophisticated in terms of narrowing searches and refining by style, size, value, colour, brand, etc. which clearly requires greater functionality. There is a constant need therefore for investment in the presentation and functionality of the website to ensure easy navigation across the site. ASOS’s site is amongst the best and they are also one of the few online retailers that includes catwalk video clips (as does Marks and Spencer), together with alternative view clips (which is standard to most online clothing retailers). Customers can also refine their search by product category or designated shop-in-shop sites, which include search options for designer, outlet, and brands etc.

PromotionASOS is a masterful user of promotions to enhance its image and capabilities with a significant proportion of them being based online. Despite its online presence, ASOS has just begun using traditional marketing methods in parallel.

Traditional marketingASOS has recently teamed up with Coca Cola. By buying a Diet Coke bottle or can and registering on asos.com, the customer has a chance to win £100 outfit every 30 minutes. Through the tie-up with Coke, ASOS has the ability to reach a wide range and amount of potential customers and widen their online database, which is a key competitive advantage in the online business sense.

The first ever outdoor advertising campaign was launched in October 2009.

A measure of the company’s success is evident through its mention via the press. ASOS has an extremely hard working PR agency or PR department, their products regularly appear in magazine, newspaper and TV fashion items. As part of its PR campaign during 2007 there were 2,236 fashion editorial pieces about asos.com and its products in the consumer press. This was an increase of 59% against 2006.(Source; company data)

Online and creative marketing

Social networking sites

In 2008 ASOS joined the conversation with customers through various social media, starting official ASOS pages on Facebook, MySpace and Bebo. They also introduced ASOS Life, which allows customers to talk to each other and key people within ASOS. Dialogue applications both support and create brand experience; people feel part of the brand, addressed as valued customers. This way they can also learn about their customers and their product preferences. People who engage in a site’s structures for dialog tend to stay around much longer. Conversation draws them back again and again, as relationships grow.

ASOS has introduced a new Twitter-based service that provides customers with an easy way to follow fashion brands, bloggers and A-List celebrities. ASOS Follows Fashion is presented as a Twitter dashboard, with the latest tweets from fashion leaders and insiders featured under six categories - The Brands, The Bloggers, The A-List, The Talent, The Insiders and The Fash Pack.(Source; www.mintel.com)

ASOS has its own daily updated style blog; the asos.com. It provides visitors to the website with features such as “Daily Shop”, “Catwalk trends” and the latest fashion

and celebrity news. By having its own blog ASOS is able to control what is said about the brand.

ASOS monthly magazine - online version and printed version. ASOS magazine covers everything from hot hotels around the world to menswear, the requisite dose of celebrity spotting and of course, their latest and greatest garments. The first three issues generated more than £1.5m in sales with an average response rate of 9%. A menswear version of the magazine launched in May 2008, featuring practical style advice, entertainment news, band interviews and aspirational fashion stories to appeal to young male consumers.

ASOS emails a newsletter twice a week to 1.8 million people who have chosen to receive it. This significant investment in creative resources has helped to increase sales from the newsletter by 137% in 2007.

By analysing a database of what its customers typically buy and how often they purchase, ASOS.com is able to target promotions directly at particular segments of customers.

Asos.com takes a ‘best friend’ approach to help build customer relationships. This means that customers recommend other people. Customers feel they have a personal relationship with asos.com and therefore want to share this with their friends. This type of ‘word-of-mouth’ recommendation gives results above the industry average. Research on traffic to the asos.com website indicates that around 15% of customers visit the site following a personal recommendation.

(Source; http://thetimes100.co.uk)

ASOS also has a banner at the top of the website. The banner continuously changes and advertises other businesses. Customers can click on the banner and this would take them to another site. The banner can also advertise certain promotions offered by the business and help the customers to become more aware of this. This is a good way of Internet marketing as the banner is very eye catching.

Search Engine Optimisation – UK

The most important market aspect of an online company is through their search engine optimization, due to the lack of a physical presence. ASOS is extremely good in the UK, appearing at or near the top on the key searches. The strong domestic profile though is not replicated overseas as its brand and website are not actively sought online overseas. This area should be a serious strategic initiative of the company as it is seriously underachieving its potential as an online store.

“According to a new report, online clothing retailer ASOS has been found to be the most successful in the fashion sector when it comes to search engine visibility.”

“Research shows that ASOS had the biggest presence in search engine results for most key search queries compared with its competitors in November 2009.  In terms of effective SEO campaigns and increased presence on the search engines, it suggests that ASOS’s campaign is perhaps more effective than their competitors.”

(Source; http://www.seoconsult.co.uk)

ASOS covers their bases pretty well – particularly when it comes to keyword searches including the word “cheap”. ASOS are in the first page of Google for “cheap women’s jeans”, “cheap evening dresses”, “cheap day dresses” and “cheap women’s clothing”.  Whether this is this an attempt to ride the economic downturn by targeting keywords associated with people looking for a bargain, or whether ASOS have targeted these keywords directly as these are the search terms their core target market are using, it is working for them.

International Expansion – Finland Case Study

Following on the previously mentioned issue of lack of international brand equity and lack of awareness of the company’s presence online, an analysis of a Finland based expansion and strategic re-think is a useful proxy for replication on a global scale. ASOS is already active in Finland although the current country strategy clearly isn’t working.

Finland seemingly is a distant and seemingly low spend nation when it comes to fashion and consumables, however deeper research reveals the opposite. Post the Internet and technical boom, Finland has a high disposable income as much of the profit from the technical boom has been kept in the country. The market exists as evidenced by the fact that the clothing sector grew by 18.5% over 2004-08, reaching €1.34 billion in Finland

Furthermore, it is an increasingly fashion conscious nation as the people travel more to Europe and the Internet has brought international trends to the country. Couple this with the lack of fashionable local retail options and the opportunity is perfect for an established online retailer with good logistics, brand equity and a customer satisfaction culture to succeed in the country.

Disposable Income - EU

The local population is already technologically savvy, given the amount of money made from the previous tech boom. The increase in online shopping is also testament to the fact that the online infrastructure capabilities are in place locally.

From an economic perspective, the foreign exchange advantages also point to advantages in expanding now with the relative movements in the Euro/Pound pointing to favorable purchasing power for the European based euro earners to the pound sterling cost and price base.

(Source: Statistics Finland/Mintel)

Gaining Visibility in Finland

As an online company, the immediate priority must be structured around the consolidated search engine optimization plan. Current searches on local engines and on traditional engines in Finnish, reveals that ASOS is relatively lowly ranked. This must be immediately addressed.

ASOS’s competitors have Finnish website capabilities and this is a must have when expanding into foreign markets. While ASOS already is active in the country it is via an underserved English site. A Finnish webpage will provide access to a larger consumer base particularly in rural areas and certainly increase placing on search engines and around local searches.

As an established company, ASOS can take advantage of its cash position and can immediately purchase results via paid marketing and placing on the established search engines. When searched with certain keywords, the advertisement appears usually above the search results and a cost per click through service is setup which can be moderated with a daily budget. When searched with common fashion related words, many competitors included M&S direct and Simply Be appear via the paid functionality.

Another area where ASOS can ingrain itself into the online social fabric of Finland is through targeting the best fashion and lifestyle blogs and online fashion websites. This can be done either via paid advertising or through links and or collaborations around products and ideas.

A further way to improve not only local fashion collaborations but search engine optimisation is through links, particularly with blogs and other local fashion websites. In Finland, it is clear that blogs are an increasing source of fashion information and web users are increasingly looking to each other about product and services.

Some ideas for attracting potential blog collaborations include:

- Free samples for bloggers- Gift cards- Discounts- Paid blog reviews

- Commission on items sold via the blog link

Current analysis reveals that there is a large amount of negative information about the company on fashion blogs particularly relating to customer service. This can be addressed by installing someone who’s responsibility it is to monitor for global and local fashion blogs to ensure positive messaging for the ASOS brand.

ASOS also needs to target fashion editors, who are vital in determining a product or company’s acceptability to the mainstream. It is extremely important to be visible in local media so people understand that they deliver there.

Furthermore, ASOS should work hard on building its database of interested Finnish consumers. This can be done via word-of-mouth marketing; Forward to a Friend-option for emails etc. The end product is that the database is widened and ASOS increases knowledge of local market and vice versa.

Marketing promotions should also be utilized in order to increase the frequency of purchases and establish the brand as an emerging company. For example an early stage marketing promotion includes free shipping for the first three months for example. This approach may eat into margins slightly although once the consumer has overcome his/her objections to shipping, customer loyalty is developed which can be enhanced. Other ideas include signing up friends and receiving further discounts.

SWOT Analysis of My Skills

STRENGHTS

I have a long experience in fashion industry and I have been working with many online retailers so I can understand their working culture and see the business from different angles

I am an ASOS target customer so I can understand the lifestyle of their target group

Online studies have given me a good understanding of online environment

WEAKNESSES

I am older than the average social network site user so sometimes I feel that I cannot keep up with the newest applications etc.

OPPORTUNITIES

I have wide knowledge of the fashion industry in Finland and Scandinavia I have a large contact database within the fashion industry I am constantly updated with what happens in the fashion world in Finland

and Scandinavia through my contacts

THREATS

Technology is developing so fast that it is difficult to keep up with the new improvements in online environment

References

http://thetimes100.co.uk

www.asos.com

www.internetretailing.net

www.mintel.com

www.seoconsult.co.uk

www.seomoz.org