614 Part 3 Digital marketing: implementation and practice

Case Study 11 ASOS leads the way with social media and reinvents fashion retailing online

More than just an online fashion for 20-somethings, endorsements in PR and promotional campaigns. ASOS
ASOS has pioneered social shopping. Currently one now sells over 50,000 branded and own-label clothing
of the most successful online fashion retailers founded products and offers a much wider product range than
in the UK, ASOS offers tens of thousands of branded its high street competitors. ASOS operates as a fast
and own-label fashion items to millions of 20-something fashion retailer, which has meant overcoming many
men and women around the globe. But when the com- challenges to get goods to the customers on time and
pany was first established in the year 2000 the outlook at the same time manage the high rate of returns. ASOS
for online businesses selling clothing was bleak. Boo has set up systems which enable product lines to be
.com – the online retailer heralded to change the way we replaced quickly. Operating at this level creates many
shop – was on the verge of collapse, the dot-com bub- challenges for ASOS, so, in order to deliver the promise
ble was about to burst and to make matters worse, the of fast designer-look fashion, and to constantly update
word on the digital high street was that no one is going product ranges, ASOS has established an ‘in-house’
to buy fashion items online anyway. design team in Europe, which creates catwalk lookalike
Nick Robertson and Quinten Griffiths, founders of As items that are produced close to the customers, which
Seen On Screen (ASOS), were obviously not deterred aids delivery, and helps the higher returns rate of oper-
by this gloomy outlook. Inspired by watching American ating online rather than in-store.
TV series Friends, Nick and Quinten set about building a
ASOS introduced an ‘independent designer section’,
website which could sell items that potential customers
which we established to provide a shop window to
had seen on television. Initially, ASOS sold copies of
new design talent, has been very successful, and
clothing worn by celebrities but soon the company
we plan to add an additional 30 designers to the 16
began developing its own brand. This focus enabled the
­designers with whom we currently work.
company to start to build a reputation that was attrac-
The most significant development in 2008/9, how-
tive to young fashion shoppers.
ever, will be the launch of our branded clearance
In the past, it has been suggested that it is not
section, ASOSRed. eBay has proved that the Inter-
possible to develop a successful online fashion busi-
net can be a very efficient channel for clearing end-
ness but by 2004 ASOS had introduced its own-label
of-season and markdown stock. We also know from
women’s wear and in 2006 it was the first company in
research that eBay and other sites where this type of
the UK to launch online catwalk shows. By 2010 ASOS
stock is available are popular with our customers. We
began expanding into European markets and currently
firmly believe that by applying the ASOS presentation
the company has offices in Sydney, New York, France,
techniques to this end of season stock we will be able
Germany and Russia.
to enhance the image of the brands and the product
By 2011, ASOS had grown into the UK’s largest
and provide an overall better customer experience.
online fashion retailer and the ASOS Annual Report
The offer will initially consist of approximately 20
for 2011 proclaimed that ‘Asos was the third most
brands, expanding to around 50 brands within six
visited fashion website on the planet’, averaging 13
months.
million unique visitors a month with 5.3 million regis-
tered users and 3.2 million active customers (defined
as having shopped in the last 12 months). The main Online value proposition
site ( www.asos.com ) targets the original UK market, Product choice is at the core of the ASOS proposition:
but the company has grown: its share in other markets tens of thousands of branded and own-label products
including France (www.asos.fr), Germany (www.asos.de) available, with hundreds introduced each week. On
and the USA (www.us.asos.com). It has increased its pricing, ASOS is price competitive with its Price Promise
country delivery list to 196. (a price match offer): if you see a branded (non-ASOS)
The company’s competitive strategy aimed at devel- product cheaper on another website, the company
oping a unique market position by selling a specialist will match that price. ASOS describes its website as
range of products which have ‘the designer fashion ‘evolving constantly as we find better ways of presenting
look’. Nick Robertson, the company’s founder, started our products’. The essence of the brand communi-
selling branded clothing as seen in films and on televi- cated in its annual report is ‘restless innovation for our
sion. Not only did this enable the company the opportu- customers’. The main elements which ASOS aspires to
nity to create a market but it also benefited from celebrity are: ‘Inspire and power your fashion discovery’.
 Chapter 11 Business-to-consumer digital m
­ arketing practice 615

that it had invested in a customer contact management

system which will enable staff to respond to customer
care emails more quickly and efficiently. customer care
working hours have also been extended to enable the
average response time to be reduced from 60 minutes
to 30 minutes.

Partnerships
Promotional tie-ups and associations are very impor-
tant to ASOS. In June 2008 the company launched
a limited 100 design collaboration with the London
College of Fashion. A capsule collection of 100 one-off
pieces each sold on the ASOS website. The promo-
tion received media coverage, including two full-page
features in the national press. The collection sold out in
minutes.

Marketing communications
In 2011 the ASOS magazine had a circulation of
nearly 500,000. ASOS doesn’t publish details of online
marketing, although it does invest in Google AdWords.
Figure 11.8 ASOS brand wheel The company is now less reliant on affiliate marketing
which at one point contributed 30 per cent of revenue.
There is much discussion about the value of this. Nick
Other elements of the ‘brand wheel’ (see Figure 11.8) Robertson of ASOS said at the time of stopping the
are: programme (in an incident known in affiliate marketing
● External: The world’s best fashion, the best fashion circles as ‘Grubbygate’), ‘I’m not saying we couldn’t
experience, the service I want, inspire and engage me. do more in the online marketing space. Next year we’ll
● Internal: Passionate about people, continuous impro­ reintroduce affiliate marketing, but as it should be. No
vement, fashion with integrity. silly commissions being paid to grubby little people in
grubby studios growing income at our expense, getting
In 2010 ASOS.com launched its marketplace platform,
in the way of genuine sales.’
which enables boutiques, vintage collectors, individuals
J e s s L u t h i , w h o p re v i o u s l y w o r k e d o n t h e
and designers – established or unknown – to trade from
programme, justified investment as follows:
their own virtual market stalls to customers across the
world. It differs from other online marketplaces like eBay Affiliate refers a new visitor (average order basket at
and Amazon in that each vendor can customise their the beginning £35.00) affiliates get £3.50 + network@
shop front and, for £50 each month, will have access £1.05 = total commission payable £4.55. So it’s cost
to an account manager at ASOS and some premium ASOS £4.55 for acquiring a new customer? Nope not
promotional spots on Marketplace. quite, let’s say a customer comes back and orders
a further (I will be very generous here) say three
ASOS service times within the cookie of (I can’t remember if it was
Working with their logistics partner Unipart, Asos says it 90 or 120, let’s say 120 days) let’s keep the basket
has been able to improve the speed and accuracy of deliv- at £35.00. This new customer has just cost ASOS
eries to customers. Today, 95 per cent of all orders placed £18.20 in total, after the cookie expires ASOS own
before 2.30 pm leave the warehouse the same day, even if the customer. If we take into account for overheads,
the customer has not opted for next day delivery. let’s say the customer cost ASOS, £20.20 (I have
This has had the effect of moving the standard added £2.00 for odds and ends). But the customer
delivery terms from 3–4 days to 1–2 days. In October has bought goods x 4 (goods have markups, they are
2008 new delivery options were introduced including not selling at cost) ASOS could not as long as I was
a named day service, including Saturday and both there tell me what the lifetime value of a customer
morning and afternoon delivery options. ASOS reported was, thing is they didn’t know then.
616 Part 3 Digital marketing: implementation and practice

Search marketing identify a customer’s propensity to spend (a value-

The range of terms ASOS targets for search are evident based segmentation), their trigger points and whether
from the <title> and description tags on the home they tend to shop at the weekend or during the week.
page, which are also used to communicate key brand ASOS also ensures that its communications only
messages: include items in the appropriate spending bracket since
there is a spectrum of goods on sale from bracelets for
<title>ASOS| Shop women’s fashion & men’s clothing £5 to £1000 designer handbags. Through data mining,
| Free Delivery & Returns</title> ASOS can even consider the customer’s favourite
colour.
<meta name = “Description” content = “Discover the
The communications strategy integrates both online
latest in women’s fashion and men’s clothing online.
and offline media through:
Shop from over 40,000 styles, including dresses,
jeans, shoes and accessories from ASOS and over ● a print magazine sent to 500,000 active customers to
800 brands. ASOS brings you the best fashion encourage loyalty, with some content repurposed as
clothes online.”/> a 24-page supplement in magazines such as Glam-
our and Cosmopolitan;
● twice-weekly newsletters sent to the site’s two mil-
Social media marketing lion registered users.
The growth of the company in recent years has largely
been driven by social media. ASOS has contributed a Both of these activities are a significant investment,
great deal to the digital high street. Apart from showing with a team of ten dedicated to the twice-weekly
that it is possible to sell fashion online profitably, the e-newsletters.
company has also pioneered Social shopping, where The approach to re-activating lapsed customers
customers use online social network sites to share through email marketing is described by Ladha: ‘We
product ideas before they buy. ASOS has success- have three attempts over several weeks to try to reacti-
fully used social media to build a community of fash- vate them. If this fails, we might try a discount to entice
ionistas who are prepared to share their views and them back. After that, they would become a non-target
opinions on Facebook, Twitter and Google plus and to unless we ran a separate reactivation programme.’
share ideas of what to wear, giving its young shoppers
Basket analysis
fashion inspiration. With approaching 5 million followers
on social media sites, the company has made a signifi- Basket analysis approaches were described in an
cant commitment to community on its own site through interview with marketing and operations director Hash
the ASOS blogs at http://community.asos.com/ and the Ladha: ‘One of the most interesting things we found
social network sites where it has over 1.3 million Likes was that men tend to buy for their partners as well as
on Facebook. It runs regular promotion events inte- themselves. We previously thought this might work the
grated across the social networks and email such as other way around.’
#ASOSSavvySunday: Using this data, email content was generated by the
company’s in-house editorial team. Generic content
included a round-up of current fashion trends and
How ASOS has also targeted customers ‘best buy’ recommendations. The personalised content
through email marketing took into account favourite brands and budget, recom-
According to the 2008 annual report, email marketing mending items below a certain price limit. Emails were
accounted for 9 per cent of sales. Hash Ladha, the sent twice a week. Other strategies, such as encour-
ASOS marketing and operations director, told The aging customers to refer a friend to the company, and
Marketer magazine in April 2009, ‘with 20,000 products sending viral campaigns, were also used at this time.
live on the site at any time and 800 new product lines ‘Our best customers visit the site every day. Shopping
being added every week, that it’s crucial that a custom- habits do vary, but most customers like to browse the
er’s marketing message is personalised to include the site between spending’, says Ladha. He adds: ‘A twice
kind of items they are most likely to buy’. weekly email gives them a direct link straight to the site
The company has used the SmartFocus CRM and keeps it fresh in customers’ minds.’
system to define eight different customer types ASOS also wanted to lure lapsed customers back to its
based on purchasing habits including frequent shop- website. It targeted these individuals with tailored content
pers and those who bought specific brands. There that aimed to remind them why they had previously
are five female and three male customer profiles that shopped online for designer and high-street clothing.
 Chapter 11 Business-to-consumer digital marketing practice 617

Ultimately, ASOS has developed a large target audi- for advertisers to know how well their campaigns are
ence for its products through the use of digital media performing (Mortimer, 2015). The main thing for the
and it is able to communicate new product ideas very ASOS team is being where their customers are and
effectively to keep customers interested. ASOS’s inno- being able to engage in the dialogue.
vative use of social media has enabled it to influence Sources: ASOS (2011, 2013); BBC (2013)
the way young shoppers interact with online fashion
retailers. Moreover, this is likely to be a massive
growth area and social shopping is likely to continue Questions
to reshape the way we shop for the foreseeable future. 1 Describe how ASOS applies the marketing mix
Always keen to be ahead of the competition, ASOS is online?
currently experimenting with Snapchat – the social app 2 Summarise the integrated communications strat-
for sharing photos – to see how this technology works egy used by ASOS?
with its customers. However, it is struggling to find 3 What risks do you anticipate as ASOS expands
an advertising model which works due to the lack of overseas?
data provided by Snapchat, which means it is difficult

Summary

1 This chapter has focussed on online retailing from two perspectives: the consumer and
the retailer. In doing so the chapter has raised questions about the different types of
customer that shop online and the various types of retail strategies used to create an
online presence.
2 Online consumer behaviour is influenced by a number of factors, which shape and
influence an individual’s intention to shop online and have important managerial
implications for retailers when developing target marketing strategies and looking for
market development opportunities.
3 The online customer profile is made up of two distinct sub-categories: classification
variables and character variables, which are ultimately used to interpret the meaning of
any online shopping experiences.
4 Online consumer behaviour is made up of a set of beliefs about the Internet that are
shaped from attitudes which influence an individual’s intention to shop online. Over
time an individual’s behaviour can be modified by positive and negative online shop-
ping experiences.
5 Websites that do not deliver a good online experience are unlikely to succeed. Online
retailers need to develop a sound understanding of who their customers are and how
best to deliver satisfaction via the Internet. In the future, more retailers may begin to
develop more strategically focussed websites, integrated into support systems.
6 Trading via the Internet challenges online retailers to pay close attention to the online
markets they want to serve and to understand that there are differences between on-
and offline customer expectations.
7 Website quality is important as it is a key determinant of customer satisfaction and
eventually customer loyalty.
8 Given current levels of growth in adoption from both consumers and retailers, the
Internet is developing into a well-established retail channel that provides an innovative
and interactive medium for communications and transactions between e-retail busi-
nesses and online consumers.
9 The Internet and web present opportunities for companies to adopt different online
retail formats to satisfy their customer needs, which may include a mix of Internet and