Successes of Asos - Case Study Example

CASE STUDY: Successes of ASOS BY YOU YOUR ACADEMIC ORGANISATION HERE HERE HERE Case study: Successes of ASOS Introduction ASOS is a rapidly-growing online fashion retailer which targets the 16-34 year old consumer group, offering a wide variety of boutique-style and trendy clothing at prices much less than those found in the original bricks-and-mortar stores which offer these fashion items. ASOS has found tremendous success, at the strategic level, in areas of marketing, public relations, and understanding the current mindset of the buying audience. Through careful planning and innovation, ASOS is experiencing explosive growth in sales and is outperforming many long-standing retailers because of its strategic business model. This case study report identifies what drives successes at the retailer ASOS with a focus on marketing, consumer research and knowledge, and stakeholder relationships. ASOS strategic success tools ASOS recognises the importance of marketing and building a positive brand image in its customer audiences. The 16-34 year old market group is one which is not burdened, largely, with complicated lifestyle obligations such as the high mortgage payment, therefore this group often has more disposable income than others. From the very basic levels of strategic planning, ASOS recognises the demographic and psychographic trends of its best, potential client group and then seeks fashion offerings which fit these lifestyle trends. Rodoplu (2008) describes psychographic segmentation as the process of identifying with specific lifestyle needs of buyers in order to gain a marketing connection with customers. The 16-34 year old target group is drawn by more visual elements and celebrity endorsement, therefore the images used on the company’s website are of trendy, youthful looking models and actors which appeals to this lifestyle need in the youth group. At the strategic level, ASOS recognises the importance of fully understanding the lifestyle priorities of youth buyers and attempts to highlight all of its online fashion merchandise with flair, vanity, and other youth-oriented appeal. Other retailers which do not understand their clients at the lifestyle level, through psychographic research and segmentation, are trailing behind ASOS because strategic knowledge about buyer groups is not being achieved or fulfilled. ASOS also recognises that this youth group is drawn to social networking sites, brought on by the rise of PC ownership both in the UK and abroad and the lure of social connection for this market group. ASOS is on Facebook, Twitter, MySpace.com and Bebo, with this presence clearly advertised on the company’s home page (asos.com, 2009). When considering what strategic steps to take to make the company have more public visibility, ASOS realised that the online environment is both low-cost and relevant to customer lifestyles. Therefore, the business uses this online forum to create social buzz at the marketing level, as both guerrilla-style promotion and for positive public relations. This low-cost marketing effort is a strategic tool to ensure that ASOS is reaching its desired youth audience and can post innovative graphics and videos, at lower cost than television or radio advertising, and actually reach their intended 16-34 year old buyers without having to filter out other demographics, such as the 50-65 group who use social networking sites much less. At the strategic level, ASOS scans the external environment looking for budget-conscious methods to build more brand visibility, which is leading to the company’s successes. Says one expert in business, using sites like Facebook for marketing ASOS “keeps the company front of mind and front of feed, and fans are happy with it. Job done” (Margolis, 2009, p.10). Furthermore, having such a strong online presence has given ASOS.com over 1.83 million registered users (Cookson and Killgren, 2008), something that many long-standing online retailers have not been able to manage through their own promotional tools. ASOS is also capitalising on a growing trend toward corporate ethics and honesty by offering a new innovation in the sales websites: A blogging portion of the purchasing website where consumers real-time comments and opinions can be posted for public view, both positive and negative (McEleny, 2009). Having this type of comment forum shows customers that the business takes their viewpoints seriously and is willing to show consumers when the company is making mistakes or making efforts to improve service or fashion merchandise offering failures. Corporate social responsibility is a very important trend in businesses today and ASOS is taking a proactive lead in using consumer sentiment to give the company a positive ethical image. By making the website more interactive, it invites consumers, through incentives, to explore the website further. This strategic aspect of the selling philosophy of the company uses its own mistakes and dedication toward self-improvement to outperform competition at the ethical and moral levels. This is likely another contributing factor to why sales continue to climb. ASOS has experienced growth rates in international sales of 112 percent, with international customers even outperforming domestic sales in the United Kingdom (Davies, 2009). ASOS decided to market its fashion products to customers outside of the UK, an expansion-focused philosophy, which quickly gave the new brand a presence in different areas of Asia and Europe. Many other companies must devote years and offer up very sizeable financial investments toward the development of an integrated communications campaign simply to gain brand awareness internationally. This is often only accomplished through proactive radio and television websites, direct mailing literature, and the development of a retail catalogue or incentives promotion to get customers interested in certain product brands. ASOS realised that it could expand its upscale products at discounted prices to mass markets in international markets by appealing to their youth needs for trendy fashions, attractiveness, and the ongoing bargain. Discounting and bargain pricing seems to be a universal concept in many different mass market groups of consumers, therefore ASOS did not have to, strategically, rely on large financial investment to get international buyers to favour the brand. The company simply relied on the psychological tendency of buyers to build interest in sales and bargains to build immediate loyalty in international markets. “There is a demand for designer fashion at markdown prices. When it’s presented as a private sale, it not only protects the brand, but gives the consumer the idea that they are within an inner circle” (Anniss, 2009, p.5). The sales philosophy of ASOS is a strategic tool to appeal to needs for exclusivity in buying which is demanded by many different international markets. Because the 16-34 buyer, generally, cannot afford the higher prices of boutique fashion buying at bricks-and-mortar stores, this provides ASOS with the ability to create private sale perceptions so that even the more budget-conscious buyer can feel more like the upscale and elite buyer. Again, at the strategic level, ASOS manages to use psychology as a tool for gaining buyer interest in domestic and international sales environments and does this successfully with marketing, pricing structures, and sales presentation. ASOS also seeks out the most creative and rewarding business partnerships and alliances possible in order to gain competitive advantage or sales edge over competition. Most recently, ASOS partnered with Shellys, a boutique-priced, elite shoe brand, to offer high-class fashion merchandise at much-lower-than-boutique prices. Says Nick Robertson, the CEO of ASOS, “Shellys is a successful high street retailer and a great new arrival for our growing Shoe Boutique which houses a mix of the most fashion-led labels in the UK” (openpr.com, 2008, p.1). At the strategic level, ASOS does not want to become a fashion discounter which offers merchandise that can be commonly found at other low-cost retail competition. Instead, the leadership of this company considers the needs of buyers and begins to seek retail agreements with reputable brands that have a well-established history of quality or exclusivity. Using the brand power of existing fashion producers, the company again saves considerable financial resources in areas of marketing and in stakeholder relationships by relying on the products’ reputation to gain buyer interest. If the company were not seeking out these ongoing partnerships or retail alliances in this fashion, ASOS would likely not be offering products that give an impression of boutique quality. Conclusion ASOS definitely understands how to maintain quality stakeholder relationships with many of its customers by simply understanding how they define themselves and use fashion merchandise to make personal statements. ASOS is able to save on many of the costs that other mid-sized companies have to endure such as extensive brand-building exercises and integrated communications campaigns. Rather, ASOS relies on its ability to provide instant information to customers in the online environment in order to save costs and still give the impression to buyers that these are exclusive, boutique, and youth-oriented purchases. However, without knowledge of what drives the buying habits of 16-34 year-old buyers, ASOS would not be as strategically-competitive as it is today. ASOS recognises that its target buyers are Internet-savvy and will continue to create marketing buzz about the brand in domestic and international marketplaces. The role of a strategist is to make sure the company saves on costs and provides more visibility about the fashion offerings to improve interest and brand loyalty. ASOS uses its strong focus on corporate social responsibility, as part of further stakeholder relationships, to outperform its rivals in multiple categories. Marketing is the company’s largest strategic strength. References Anniss, E. 2009. Innovative retail ideas go on the net. Financial Times, London. 15 Jun, p.5. Asos.com. 2009. ASOS: The online fashion store. http://www.asos.com. (accessed 1 Jan 2009). Cookson, R. and Killgren, L. 2008. ASOS gets a boost from web shoppers. Financial Times, London. 2 October, p.24. Davies, G. 2009. International growth boon for ASOS. Investor’s Chronicle, London. 16 November. Margolis, N. 2009. Digital choice: ASOS.com and Facebook. Marketing, London. 11 November, p.10. McEleny, C. 2009. ASOS launches site showing real-time customer opinion. New Media Age, London. 19 November, p.4. Rodoplu, K. 2008. Travel and tourism – psychographics. Bilkent University, School of Applied Technology and Management. http://www.tourism.bilkent.edu.tr/~benice/restonews/page52.doc (accessed 1 Jan 2009). Young, S. 2008. Fashion shoe brand Shellys now available online through ASOS.com. http://www.openpr.com/news/32536/Fashion-Shoe-Brand-Shellys-Now-Available-Online-through-ASOS-com.html. (accessed 31 December 2009). Read More