ASOS has pioneered online social shopping and is one of the most successful online fashion retailers in the United Kingdom. ASOS offers tens of thousands of branded and own-label fashion items to millions of 20-something men and women around the globe. The brand is constantly reviewing the online marketplace for threats or opportunities for expansion and responding accordingly. This case study explores the growth and competitive strategy of this iconic online retail fashion brand.
The ASOS strategic pillars (see Figure 4.18) summarise its business model, including the target audience and the importance of customer experience and sustainability.
Nick Robertson and Quentin Griffiths, founders of As Seen on Screen (ASOS), were inspired by watching American TV series Friends, and these friends set about building a website that could sell items that potential customers had seen on television. Initially, ASOS sold copies of clothing worn by celebrities, but soon the company began developing its own brand. This focus enabled the company to start to build a reputation that was attractive to young fashion shoppers.
Despite industry commentators’ doubts about selling clothing online, by 2004 ASOS had introduced its own-label women’s wear and since has achieved the following landmarks:

• 2006 – became the first company in the United Kingdom to launch online catwalk shows;
• 2007 – launched ASOS own-label for men;
• 2010 – began expanding internationally into Europe, Russia and the United States and established sites to serve these markets and launched ASOS marketplace;
• 2011 – app launch and Australian, Italian and Spanish sites established;
• 2012 – began to consolidate online expansion, opening international offices in Sydney and New York;
• 2015 – partnered with PayPal to connect directly with student markets;

Figure 4.18:

• 2016 – invested in artificial intelligence and voice recognition to improve social media applications;
• 2017 – market valuations made ASOS more valuable than M&S, the United Kingdom’s largest seller of clothing;
• 2019 – dip in online fashion sales, ASOS’s significant investment in restructuring and transitions costs led to lower decline in overall valuation of the brand;
• 2021 – ASOS explores expansion opportunities in the United Kingdom with possible acquisition of one of its wholesale partners and leading fashion brand Topshop.

ASOS has grown into the United Kingdom’s largest online fashion retailer by deploying a competitive strategy, which has established a unique market position:
selling a specialist range of products that have ‘the designer fashion look’. Nick Robertson, the company’s co-founder, started selling branded clothing as seen in films and on television. Not only did this enable the company the opportunity to create a market, but it also benefited from celebrity endorsements in PR and promotional campaigns. ASOS now sells over 100,000 branded and own-label clothing products and offers a much wider product range than its high-street competitors. ASOS operates as a fast-fashion retailer, which has meant overcoming many challenges to get goods to the customers on time and at the same time manage the high rate of returns. ASOS has set up systems that enable product lines to be replaced quickly. Operating at this level creates many challenges for ASOS, so, in order to deliver the promise of fast designer-look fashion, and to constantly update product ranges, ASOS has established an ‘in-house’ design team in Europe, which creates catwalk lookalike items that are produced closer to the customers, which aids delivery and helps the higher returns rate of operating online rather than in-store.
ASOS continues to be one of the top ten online retailers globally, but recently other high-street brands, Macy’s and Next plc, have grown their e-commerce operations to become more significant competitors. In 2018, faced with growing global competition, ASOS’s CEO Nick Beighton talked of how the company had invested heavily in expanding its global platform capability in order to improve customers’ experience and facilitate global expansion in new and existing markets (Skeldon, 2019). The increasingly competitive nature of online fashion means ASOS has to plan for its future growth and market development. The company’s mission is to be the world’s number one destination for fashion-loving 20-somethings (ASOS, 2019)...........

Questions 

1 Apply the SOSTAC model to ASOS and highlight why it has become such a successful online fashion brand.
2 Describe how ASOS uses digital channels to engage its customers.
3 Discuss how ASOS has used digital marketing to develop its differentiated market position.

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Our strategic pillars provide the framework for our global business model... 2. Truly global retailer for fashion-loving 20-somethings The ASOS brands 5. 3. The ASOS platform The ASOS customer experience Effective, efficient and sustainable model ...and are underpinned by our corresponding strategic priorities 1. Expand our global reach and local scale by accelerating growth in key markets 2. Grow our unique ASOS brands by launching new brands and improving on both speed to market and price 4. Improve our personalised customer experience through the application of data science and experimentation to deliver the most engaging experience 3. Enhance our flexible and multi-brand platform by growing, high potential categories, implementing flexible fulfilment and improving proposition 5. Develop our effective, efficient and sustainable model by transforming our organisation including upgrading talent and capabilities, improving cross-functional ways of working and further driving responsibility for everything we do