Category: ASOS

Executive Summary

ASOS must consider the following three recommendations based on the following themes: 1) New Product Development ; 2) Brand Positioning; and 3) Use social media to create emotional brand attachment. ASOS must prioritize strategies related to new product development.

It is aligned with the need to create a new product line for children. Corporate leaders and the members of the marketing team must work together for the implementation of the said strategies, because it is the only way to sustain its competitive advantage, and increase the companys profitability in the long run.

In order to enhance value of the companys brand, ASOSs corporate leaders must evaluate the impact of three recommendations based on the following themes: 1) New Product Development ; 2) Brand Positioning; and 3) Use social media to create emotional brand attachment.

An overview of ASOS business model reveals the fact that new product development is not a priority for the company (Botha, Strydom and Brink, 2007).. However, it is high time to consider the value of new product development, especially when it comes to the clothing needs of children.

New Product Development

Corporate leaders and the head of the marketing department must seriously consider the application of new product development principles. The purpose of the new initiative runs parallel with the companys tag line stating that ASOS is a one-stop fashion destination. It can be argued that young parents purchasing clothes for personal use will find it convenient to find clothing merchandise suited for toddlers, preschoolers, and grade-schoolers.

Brand Positioning

After making the decision to create a new product line, the next step is to apply the principles of brand positioning (Gitman and McDaniel, 2009). The main thing to keep in mind is to offer something different. Thus, ASOS must create a new product line that sells clothes with a parent-children theme.

For example, there is a sub-category in the product line wherein parents are able to purchase clothes that matches those for their children. Thus, it is not enough to simply create clothes for preschoolers and grade-schoolers. This strategy is enhanced by the application of brand hierarchy principles that enables the company to differentiate products depending on the target market.

Although the parent-children theme is already evident in the new product line, the company recognizes the need to supply high-end products and affordable products for those looking for top quality wear in an affordable price range.. In this group, the clothes are more expensive with products that were created using more complicated materials and manufacturing techniques. The second group is comprised of customers looking for high-quality products at a more affordable price range.

Social Media and Emotional Attachment

ASOS must develop a clever strategy to leverage the power of social media platforms like Facebook and Twitter, as well as video-sharing websites like YouTube. The appropriate use of social media will enable ASOS to strengthen the emotional appeal of their products. In the past, the use of mass media tactics created an impersonal approach to product distribution and product promotion processes (OConnor, 2012).

In other words, in using social media, ASOS will make the customers feel that they are valued and that their inputs matter to the company. ASOS must learn to move away from conventional promotion strategies that only promotes the value of the product without considering the needs and aspirations of the consumers.

In the case of ASOS, the company must go beyond the creation of a website in order to satisfy the basic requirements of e-commerce. The next step is to create a link within ASOSs website that opens to a new portal. The purpose of the new portal is to focus the spotlight on customers feedback and how they enjoy the clothes they purchased online. The creation of the said site will create two types of advantages for the company. First, it will make the customers feel that they have a personal connection to the brand.

ASOS must make the customers feel that the company values their feedback. In the new portal, customers can share their ideas on how to improve the product line. ASOS will benefit from this interaction if customers feedback are integrated into the development of new products.

Aside from the creation of a dedicated site that enhances the interaction between the company and its customers, the company must develop creative ways in leveraging the power of social media. For example, ASOS will create a Twitter account, and the followers of the said Twitter account will receive exclusive invites from ASOS.

Thus, loyal followers will receive rewards from the company. In a typical invite the company will provide information about a product launch or how to access discount coupons. The company must develop similar promotional strategies, because these strategies will create more endearing moments between the company and the customers.

ASOS must never underestimate the power of social media in its ability to deliver a specific message to a specific target market (Manrai, 2014). Facebook and Twitter possess certain capabilities beyond the reach of traditional promotional strategies that were created on the foundation of mass media networks like Fox News or BBC (Meiselwitz, 2014).

Consider for instance a social media networks ability to connect people from all walks of life and compels them to interact over a particular image or video (Dennhardt, 2014). Thus, ASOS must create a Facebook page that allows the company to announce a corporate sponsored competition with the exclusive participation of customers. Prizes will be given to participants sporting the latest product from ASOS.

ASOSs ability to improve certain aspects of customer relationship marketing creates an indirect enhancement of the brands value in the eyes of consumers. Creating a new product line strengthens the companys competitive advantage.

The inspiration for this strategy comes from the companys mission statement that says ASOS is a one-stop shop when it comes to menswear and womenswear. At the same time, the implementation of these three strategies will make customers feel that the company is doing everything in it power to satisfy their needs in the context of the fashion and beauty industry.

The company will face challenges along the way; however, corporate leaders and the members of the marketing team must never allow the roadblocks and other constraints to force them to stop the initiative in creating better services for their customers. It is the only way to sustain its competitive advantage, and increase the companys profitability in the long run.

References

Botha, J., Strydom, J. and Brink, A. (2007). Introduction to marketing. Cape Town, South Africa: Juta and Co. Ltd.

Dennhardt, S. (2014). User-generated content and its impact on branding. New York: Springer.

Gitman, L. and McDaniel, C. (2009). The future of business: the essentials. San Francisco, CA: South-Western Cengage Learning.

Manrai, L. (2014). The Routledge companion to the future of marketing. New York: Routledge.

Meiselwitz, G. (2014). Social computing and social media. New York: Springer.

OConnor, R. (2012). Friends, followers and the future. CA: City Lights Books.

Executive Summary

Asos Company trades in clothing and markets its products online. This year, the Company is planning for an advertising campaign through TV channels and weekly magazines.

The budgeted amount for the campaign is $500,000 and the advertisement will start from the month of July. The TV advertisement will appear three times during the sport news and cost $60,000. The campaign will also appear in a weekly magazine in an A4 spread and cost $42,000 (Pozzi 2012).

The objective of the campaign is to increase the sales by the end of July by 5%. The objective is based on the growth of online sales in Australia, which have increased to 61% from 59% during the last financial year. Going by the strategies in place, by the end of July sales are expected to increase by 5%. The online advertisement is aiming at evoking interests from a wide range of customers especially women (Marquis & Udo 2001).

Background of ASOS Company

Two people namely Nick and Quentin founded ASOS in June 2000 in the United Kingdom. The acronym refers to “as seen on screen”. The company started as a small business that specialized on online sales of products that were associated with celebrities. ASOS has about 1000 employees and approximately 50,000 brands on fashion.

Within one year after the Company was created, it joined London Stock Exchange and continued growing in size. ASOS has developed strategies to attract attention from women from the year 2005 by introducing a beauty line and men’s line in the year 2007. Today, the company is the leading retailer in the United Kingdom (Brynjolfsson & Smith 2001).

Introduction

ASOS Company is targeting to evoke interests from 16.6 million unique customers on monthly basis from different parts of the world where the targeted customers are aged 18 years and above. Last year alone, the number of online users registered with ASOS Company reached 8.7 million while those who had already shopped from the Company reached 4.7 million from 160 states (Marquis & Udo 2001).

ASOS Company specializes in Unisex clothes and brands in fashion but the current strategies also aim at evoking the interest of older women by meeting their special needs. ASOS’s campaign is unique in that no other Company has explored the target market of older women. The older women being targeted by the company are aged between 35 and 50 years (Pozzi 2012).

Reasons for targeting women aged between 30 to 50 years

There are many reasons why the company should target women between the age of 30 and 50 years (Brynjolfsson & Smith 2001). Women at this age are always occupied with their families either attending to their kids at home or taking them to school as well as outings on weekends and holidays. They do such activities every time they are free from work.

Such women therefore require to dress in outfits that give them confidence as their activities involve interacting with people of their class (Marquis & Udo 2001). On the other hand, women approaching the age of 50 years become less busy with most of their children being through with schooling thus reducing the number of commitments.

At this time, women like spending their extra time in going out and socializing with friends. It is therefore paramount for them to improve their appearance. ASOS Company wishes to help such women style their appearance at a price they can afford (Brynjolfsson & Smith 2001).

Women aged 30 and 50 years experience change in fashion through their peers and like adjusting their wardrobes to match the new social group. Therefore, women aged between 30 and 50 years like being confident and careful when choosing their attires.

ASOS will ensure that the campaign includes seeking the input of women at the specified age and pays attention to their comments about what they enjoy wearing as well as observing the fashions being worn by similar women in different parts of the world (Marquis & Udo 2001).

More focus will be on creating awareness for the prospective women customers at this age than provoking their behaviour towards the products because this strategy follows the hierarchy model.

According to the model, the number of those who are interested with awareness and knowledge is always high but as the pyramid goes up the number of those who can change their behaviour towards a particular brand decreases (Marquis & Udo 2001).

The women who may be unaware of the products require awareness by recognizing the products in the adverts using repetitive messages bearing the name of the products offered by the company. This will be difficult because some women may have their attention captured but fail to note the brand offered by the company (Whit 1998).

ASOS will concentrate on building the knowledge base of the women targeted because they may be aware of the products but lack more information them.

The advertisement will target women to make them comprehend the names on the different brands of clothes sold by the company as well as what the names of the brands represent. ASOS will focus on ways to convince customers how its brands are different from those of its competitors as well as identifying the specific appeals based on their benefits to the women (Pozzi 2012).

The Company will build the preference for the women customers by promoting the quality of the clothes and other features such as high performance and value because the women may like the brands but not prefer them to products from the competitors.

ASOS will measure the success of the campaign by checking the preference of women before and after the advertisements. The Company will also build on convincing the targeted women because making them prefer its brands to others may not necessarily mean they will be convinced to buy (Marquis & Udo 2001).

The final step in the campaign will be targeting women to purchase the products because they may be convinced to make the purchase but fail to get around to actual purchasing. The customers may continue waiting for more details about the brand or decide to make the purchases later (Pozzi 2012).

The campaign will ensure the targeted women take the final step by reducing the price of the clothes and introducing premiums for the products.

The targeted customers will also be allowed to try out the products of their choice by searching out for more details about the brands. Thus, the campaign by ASOS Company will be systematic. The stages will start with building awareness and end with the purchasing of the brands (Brynjolfsson & Smith 2001).

References

Brynjolfsson, E & Smith, M 2001, ‘Consumer decision-making at an internet shopbot: brand still matters’, Journal of Industrial Economics, vol. 49, pp. 541-558.

Marquis, G & Udo, J 2001, ‘Factors affecting e-commerce web site effectiveness’, Journal of Computer Information Systems, vol. 42, no. 2, pp. 10-17.

Pozzi, A 2012, ‘Shopping cost and brand exploration in online grocery’, American Economic Journal Microeconomics, vol. 4, pp. 96-120.

Whit, A 1998, ‘At far too many sites ‘buyer be lost’ applies’, Internet World, vol. 98, no. 6, pp. 23-26.

Introduction

The British company ASOS is an example of a company that has very successfully adapted to the new age of the Internet. The brand launched its online store in 2006 and began selling its clothes and shoes. The new generation of millennials was the company’s target audience. Now the total revenue of ASOS is growing very fast. ASOS demonstrates how online commerce can allow the company to become an international market leader. The promotional events held by ASOS and the wide range of products help the economic growth. However, the current measures are not enough to ensure such intensive growth.

The Context of the Problem

The emergence of online commerce has opened up new opportunities for both manufacturers and consumers. The world economy has evolved significantly with the advent of the Internet. A powerful logistics system made it possible to deliver goods worldwide and provide services remotely. Large firms managed to create a particular model of doing business on the Internet. Its features include incentives, a focus on the global marketplace, and the integration of new technologies to drive growth. All of this saves customers time and, during discount periods, saves them money. The Asian, U.S., and European sales market has moved almost entirely online, and major local and international leaders are emerging.

The sharp decline in ASOS quotations at the end of 2018 led the media to believe that the end of the era of online shopping was near. Sales are no longer as intense as they used to be, and therefore profits are down. The reason for this is the fact that traditional online retailers cannot keep up with a market ruled by infrastructure companies. Shoppers are no longer satisfied with waiting weeks for an order and demand next-day delivery. However, due to logistical difficulties, not every company can meet this demand. This level of quality is not yet available to many companies. In addition, revelations about the nature of sales promotion have driven some customers away from retailers.

ASOS should have thought about competing with stationary retail outlets, where customers can hold goods in their hands and start using them immediately, without waiting for order delivery. Promotions and special offers have spoiled European and American shoppers. That is why they are often unwilling to accept discounts of less than 50%, for example, during the pre-New Year period. ASOS, an experienced player in the market, has to take this factor into account. The company monitors sales dynamics and, if necessary, can pull up the statistics by stimulating marketing activities. However, it did not do so, for example, when the stock collapsed at the end of 2018.

Three Solutions to the Problem: Improved Logistics

Solutions to the problem can include ways such as teaming up with other companies, changing the existing logistics system to focus on Amazon’s experience, and improving the site to meet customers’ high expectations. Long delivery times are one of the most common customer complaints. Amazon, the largest online commerce site, deals with this problem quite effectively. In particular, the company has begun reserving space for its shipments on cargo ships. This helps the company get rid of go-mediators, which will make the delivery process faster. Amazon is also working with its fleet and testing drone delivery. The company plans to create a flying warehouse, which will also reduce logistics costs.

ASOS should consider using Amazon’s expertise. The company does continue to implement a single warehousing system between the U.K. and the U.S. and promotes the development of partners’ operational capabilities. In addition, the firm’s investment in improving logistics is significant, and there are known cases of building partnerships with firms in this area. However, more intensive measures, such as those taken by Amazon, are needed. Amazon’s separate, powerful analytics system calculates the most economical way to deliver packages. It calculates the shortest route for each parcel, saving the company millions of dollars in fuel costs. ASOS’s revenue allows the firm to budget extra money for better logistics.

Improving Site Performance and Design

The Internet is a significant source of growth for the company, but the retailer’s surge in popularity has repeatedly caused numerous website glitches. In addition to technical errors, some questions are raised by the ASOS interface, which would lead to improved customer satisfaction. Although the company has several subsidiary brands, its advertising is poorly represented. In addition, there are problems with positioning – most customers know ASOS only as a clothing store. Moreover, the case analysis mentions that visitors to the site and its primary customers are women and men between 16 and 34. People in this age category make up only twenty percent of the total number of online shoppers. Accordingly, some aspects of the ASOS site and its appearance could be improved.

The solution to this problem has to do with site analysis. As noted in the case study, the staff at ASOS is now organized by hierarchy. There are separate departments that deal with specific tasks. Therefore, it would be advisable to assign or create a department that would conduct a UX audit to verify the site’s usability. The result of a usability audit is usually a document that explains the site’s problems in detail and suggests solutions and notes best practices as examples. Due to the customer information collected on the site, online retailers know exactly what customers are looking for. Accordingly, ASOS needs to make sure that the site is performing as well as it should in order not to lose profits.

Company Growth through Integration

The integration process leads to the merger of companies operating in the market. Horizontal integration is the merger of companies producing the same type of product. Its benefit is to reduce costs and increase market share. After this type of merger, the product made remains the same. Companies resort to vertical integration to reduce operating costs. The company already has a successful integration experience, for example, with Topshop. ASOS then reported results for the second half of the fiscal year 2020. According to it, even in a pandemic, there was an increase in profits. Immediately after the merger, a significant increase in traffic was recorded. Accordingly, integration can be an effective way for the company to grow further.

Eliminating Two Solutions

The company should not consider a website redesign only based on aesthetic needs. Changing the external interface has no direct correlation with an increase in the company’s income. And in an attempt to create the perfect site, clients and performers lose a lot of time that could have been spent on more productive changes. Website redesigns can cause an adverse reaction, even if the previous site was far from perfect. It is necessary and keeps in mind that radical modifications often lead to unpredictable consequences. All of the above suggests that ASOS should pay attention to other ways to increase company growth and profits.

Vertical integration coordinates the various components of an industry chain in an environment where bilateral trade is not profitable. While this type of integration usually reduces some risks and transaction costs, it also requires significant upfront capital investment. Moreover, the effectiveness of such coordination is often questionable. Horizontal integration increases resource efficiency, lowers prices, and lowers costs. However, weaker competition and increased concentration of sellers in the market worsen the efficiency of resource allocation, which poses a threat to monopoly. Integration is not the best way to develop ASOS because efficiency is questionable and monetary costs are high.

Creating an Action Plan with the Remaining Way to Solve the Problem

ASOS sales growth seriously slowed down late last year due to the difficult situation caused by a new strain of Omicron coronavirus infection. Revenues fell by one-fifth, the exception being the local U.K. market. One should pay attention to Amazon’s experience. The company has shown tremendous growth and has a talented supply chain. Moreover, Amazon’s automated technology increases customer satisfaction with service quality. Boeing rentals and cargo ship seats ensure that the company delivers quickly and smoothly. After purchasing electric vans, Amazon can now claim that express shipping is environmentally friendly.

Robotic systems such as Kiva movers have fully automated the process of storing, picking, and packing goods. With the help of robots, the Internet giant reduced operating expenses by 20%, which amounts to 22 million dollars per warehouse in monetary terms. Its network of postal terminals allows customers to receive their parcels conveniently and without queues. In addition, it allowed the company not to lose revenue due to FedEx’s decision to stop deliveries. ASOS can successfully use all these logistical methods. The fact that regular postal distribution points are far away from buyers was the cause of buyers’ complaints, as well as confused delivery dates of goods.

A common reason for a customer to refuse an order is inconvenient delivery and receipt conditions. The need to wait for a courier or the inconvenient location of the pickup points worsens the customer’s inclination to make purchases. The best way to overcome the problem of returns and increase customer satisfaction would be to improve logistics. For now, ASOS promises next-day delivery of orders only in the United Kingdom, while this option is available to Amazon users in countries other than the United States. ASOS’ investment in logistics is still significant, but the company does not resort to such radical methods as, for example, renting seats on planes.

Conclusion

ASOS grew quickly in online sales, but new solutions need to be implemented to ensure further growth. Of the three paths discovered, two had to be found unsuitable for one reason or another. Thus, the only possible way to ensure further development of the firm is to improve the logistics. Logistics costs can be reduced by eliminating unproductive operations, such as cargo handling. ASOS needs to ensure optimal warehouse locations and eliminate activities and intermediaries that do not add value for consumers and other supply chain participants. Optimizing the use of vehicles by capacity and mileage to minimize delivery costs and other solutions can also increase company profits. ASOS should choose this path to ensure the company’s growth.