ASOS Digital Retail Aspects - Report Example

Digital Marketing Executive Summary The following report analyzes the various aspects of Digital marketing with reference of the company ASOS. ASOS is a renowned online fashion retailer and has a presence over 120 countries in the world. The company however wants that it should be recognized as a fashion destination rather than a fashion retailer. To enable this, the company employs various digital marketing strategies so that the company is recognized as a fashion destination by the age group of 20 all over the world. In analysis of digital marketing strategy that is used by the company it is assessed that the company is going in the right direction as a long as strategy is concerned. It is also found that the going into the future the company should aim at further cost cutting and increasing the reliability and trust factor of the company so that it becomes more appealing to the target customer base of the company. Contents Executive Summary 2 Introduction 5 1.SOSTAC to justify marketing strategy of ASOS 5 1.1Situation 5 1.2 Objectives 6 1.3Strategy 7 1.4Tactics 7 1.5Action 8 1.6Control 8 2.Online customer experience pyramid model 8 2.1Experience 8 2.2Customer- Centric Services 8 2.3Customer Journey 9 2.4Customer Service 9 3.Alternative strategies 9 4.Digital marketing factors contributing to brand equity 11 5.Customer life-cycles 12 Conclusion 14 References 15 Appendix 18 Introduction ASOS is an UK based online retailer selling fashion and beauty products. There are about 75000 products that are marketed by the company some of which are branded and some of which are own label. The main target customers of the company are the boys and girls in their 20s. The strategy of the company is not to remain just as an online retailer but to be synonymous with the concept of fashion and what it means for a 20 year old. The following report is analysis of several aspects of the digital marketing strategy of ASOS in order to identify the area where the digital marketing can be improved. 1. SOSTAC to justify marketing strategy of ASOS SOSTAC stands for Situation, Objectives, Strategy, Tactics, Action and Control. Situation defines the current position of the company. Objectives stand for and define where the company wants to be. Strategy defines the way to reach the desired goal where as tactics defines how exactly the company intends to reach the goals, action defines the goal and control defines the way to get there (Chaffey and Chadwick, 2012). 1.1 Situation The first dimension in analyzing the situation is performance of the 5s. If one analyses the current position of the company with respect to the 5s of the marketing strategy then it can be safely said that the company excels in all the dimensions of the marketing strategy. The second dimension is related to the customer insight. It is found that the target customer base of the company is the average 20 year old. The company is quite aware of the fact that the fashion statement of this age group is constantly changing one and is influenced by their peers, current market trends etc. It is also seen that the fashion statement of this group is based on their reflection of individuality. The company serves these 20 years from a variety of countries across the world. Thus it has to keep itself updated with the latest fashion trends in different countries. The fact that the company is able to this quite effectively is reflected in the fact that the retail sale of the company is increasing year on year (Crossley, 2014). The data for the same is shown in the appendix. The area of the fashion retailing is a booming one and the market potential is increasing year on year. Internally the company wants to see it as synonymous to fashion as Google is synonymous with search and Facebook with online retailing. In fact the company has become second most viewed fashion website of the planet (ASOS Plc., 2015). 1.2 Objectives The objectives of the company can be defined in terms of the digital marketing strategy. The first strategy of the 5s digital marketing strategy is sell; which means to grow sells. ASOS tries to increase the sales by boosting the trust of customers in the online purchase process and ensuring free delivery to the customers (Chaffey and Bosomworth, 2013). The second S stands for speak. ASOS speaks to the customers of the company through the magazine which serves as an important tool in building the brand and influencing sales figure. The third S stands for serve. ASOS invests in the choice of customer service channels which are used to serve the customers of the company (Eid, Elbeltagi and Zairi, 2006). The fourth S stands for Save Costs. ASOS has reduced the spending in the marketing in order to reduce the price of its products and increase the affordability of customers. The fifth factor is sizzle which is used to extend the brand online. ASOS have invested heavily in the community platforms in order to ensure that the social media is used to deliver the sizzle. Going into the future the company wants to improve in several areas. One of the areas is that the company wants to increase the trust that the customers put on the company. One of the areas through which the company wants to achieve this is through accepting of other mode of payments, better quality checking and ensuring faster delivery through increasing the number of warehouses and speeding up the supply chain. 1.3 Strategy There are two types of strategy. One of which is STOP or segment, Target, Objectives and positioning. The other is SIT or Sequence, Integration, Targeting and Segmentation. The strategy that the company intends to use in order to grow is that of the demographic segmentation. The target customer base of the company is the 20 year old. The marketing strategy that the company wishes to follow is to go for a price cut in order to increase the sales volume of the company. According to the CEO of the company the current aim of the company is to increase the price position of the company before the company will go for a marketing push in the future (Vizard, 2014). In line with this strategy the company has decreased the marketing spend by 16% in a bid to lower the prices of the products (Hobbs, 2015). The company also wants to increase the trust levels that the customers have over the company the company is increasing the way in which it can receive the payments from the customers and also ensuring that the products that are shipped match quality expectation of the customers all the time. 1.4 Tactics In order to reach the objective that the company wants to reach it has to improve the 8p’s of marketing. The target customers of the company are 20 something. The company reaches the target customer base by not only being any other fashion retailer but trying to fulfil all their needs, entertain them etc. to keep them glued to the site. The company offers 75000 different clothing ranges, women’s and men’s wear, etc. in order to cover all the latest trends and too at the best prices and quality at equal or better level than the customers. ASOS is not just a fashion website but provides entertainment and other knowledge to the customers. 57% of the total sales of the company come from outside Europe thus having a major emphasis on the effectiveness of the distribution channel and need to improve it further. 1.5 Action In order to reach the desired goal the company needs to leverage the key capabilities of the company and engage efficient people in order to reach the goal. 1.6 Control It is important to keep a tab on the progress through periodic performance check in order to confirm that the development is occurring in the right direction. 2. Online customer experience pyramid model The online customer experience pyramid is shown in the figure in the appendix. The different segments of the pyramid are: 2.1 Experience The company should try and deliver the events that help in engaging with the customers of the company (Chaffey and Chadwick, 2012). It is also required that the company provides relevant means of social engagement and creates; nurtures and engages with the communities (Donna, Thomas and Chatterjee, 1997). In order to ensure this the website of ASOS is not limited to selling of clothes. The company expands into talking and engaging with the customers of the company on different topics through blogs, editorials, magazines, daily edits and updates. 2.2 Customer- Centric Services The services of The Company ASOS are designed to engage with the customers to understand their needs and requirements regarding fashion. The company wants to reach a position in the mind of a 20 year old when thinking about fashion reminds them of the company. The company also engages with the customers in order to understand and appreciate their demands and insight view of the minds of the customers. 2.3 Customer Journey ASUS is marketed as being far more than a mere fashion website. ASOS website is designed in such a way that a 20 year old who is focussed on fashion can reach the website either while searching for fashion, reading about fashion; talking on the topic in social media on whichever devices they are using (Dasgupta and Mathew, 2012). ASUS understands the entire psychology of a 20 something and designed the merchandise on its website in line with the trend. 2.4 Customer Service The company believes that the customers do not just buy products from the company they become a part of the company (Meng and Chatwin, 2013). The company encourages the participation of the customers in their site and believes that this is the thing that sets the company apart from the competitors and any other online shop. In fact this is the feature which turns ASOS into a fashion destination. In fact ASOS as a separate twitter channel in place to respond to the service requests by the customers. 3. Alternative strategies The concerned company mainly focuses on attracting and retaining its customers by improving the efficiency and effectiveness of its websites. It emphasized on designing the website in such a way that it attracts the customers and facilitates the customers in availing the service quickly and easily (Proctor, 2014).The company is likely to face competition from its competitors, therefore in order to gain competitive advantage over its competitors it focussed on various alternative strategies. Figure 1: VRIN framework (Lasserre, 2012) The alternative strategy implemented by the concerned organization is VRIN framework which can be defined as the valuable, rare, inimitable and non substitutable service provided by the company. The ASOS model is certainly considered as valuable with its ability of generating huge profit through its online services. The unique design website and the reliable service offered assist in maintaining high value and attracting large number of customers. The efficiency in its delivery services is considered as another factor contributing towards its success. The resources used by the ASOS model is not rare, therefore it is required to identify the unique resources as compared to its competitors in the market (Onkvisit and Shaw, 2009). The service offered by the company is inimitable since it focused on increasing its customer base through various social media. Its competitors can imitate and follow its online and mobile business model but they cannot imitate the bonding or the relationship that is developed by the company with its potential and prospective customers. The customer oriented business model and the attitude or the process of attracting its customers is excellent and superior as compared to its competitors. Since the online services can be easily substituted, therefore the concerned company focused on adopting new and latest technology for gaining competitive advantage over others (Joshi, 2005). Apart from adoption of the VRIN framework, the concerned company focused on its objectives which is based on four pillars such as it is highly customer obsessed, collaborative and respectful, passionate and restlessly innovative. The company is customer obsessed in the sense that it attempts to collect information about its customers and their needs and requirements, customers are provided top most priority; adopt changes according to the needs and requirements of its customers (Fill, 2006). It focuses on collaboration that is performing the work together for achieving the goals or objectives of the organization, developing various new and creative ideas and providing adequate service to its customers. The organization is restlessly innovative since it is engaged with continuous improvement and development in its quality and it is passionate of providing the best and the adequate service to its customers. The values and the objectives of the company are not easy to achieve therefore the concerned company is inclined towards adoption of various alternative strategies. 4. Digital marketing factors contributing to brand equity ASOS as a company wants to achieve the status that is enjoyed by Google in the domain of search, and facebook is in the domain of social networking (ASOS Plc., 2015a). The company wants to ensure that the experience that the customers have on their website is truly entertaining. The company believes that the fashion lovers in their 20s should visit the company website not only for shopping but to create their own fashion collection. ASOS as a company is making the use of innovative technologies to deliver the customers the type of online experience that they desire. The company also wants to be truly global in its approach and ships to over 240 countries across the world. The company understands that the fashion of different country differs from each other. The company sources from different countries to serve the local taste of the customers and has also opened sales offices in different countries in order to serve the customers (Eid and Trueman, 2002). The company is also working on the business in order to transform it reduce the time in the supply chain and to guarantee that they deliver the right fashion at the right price. The digital marketing strategy of ASOS can be defined in the form of 5s. The company uses various factors in order to boost the brand equity of the customers. The company tries to increase the trust of the customers by giving the customers different modes of payment (ASOS Plc., 2015b). The company also ensures that quality products are delivered to the customers of the company. In order to increase the brand equity of the company, the company tries to increased the number of delivery centres and reduce the delivery timings by improving the supply chain (Chaffey and Chadwick, 2012). The company does not want to be perceived simply as a fashion retailer but as a fashion destination. The company aims to deliver high quality materials at low cost to the customers so that the company serves as a fashion company of choice. 5. Customer life-cycles The customer lifecycle can be compared with the product life cycle due to their similarities. The customer life cycle focuses on the creation and development of the lifetime delivery of its services to its potential and prospective customers (Chaffey and Chadwick, 2012). The concerned company mainly focuses on the need and requirements of its customers. Figure 2: Customer life cycle (Kumar, 2008) The customer life cycle of the company mainly includes are awareness, research, comparison, selection, purchase, experience, loyalty and retention and word of mouth. The company focuses on designing its website for creating awareness of its brands. It launched their f-store on face book in the year 2011 with much more application then other f-stores. The security in face book is considered as an issue or a matter of concern by some of its customers. It focused on immense research for introducing new technology for providing unique and adequate service to its customers. Technology is considered as the heart of the company, therefore the concerned company focused on investment in research and development in order to gain competitive advantages and providing latest services to its customers (Johnson, Whittington and Scholes, 2011). The online service provided by the concerned company is compared with its competitors in the market, therefore in order to retain its customers the company is required to focus on differentiation strategy. The concerned organization assists the customers in availing of the services. Online service is considered as the important service for its customers but the online service is increasing more than its expectation. The company focused on improving the websites from the perspective of customer experience. It emphasizes on attracting its customer for retaining the customers and increasing their loyalty, the customer generally prefers to switch to other brands or retail store due to the unsatisfactory services provides by the particular retail store, therefore the concerned online retail store provides services according to the needs and requirement of the customers. The customer expects excellent customer services and experiences from an online retail store, the expectations of the customers mainly includes the online web designs and contents as well as the online delivery and logistics services provided by the concerned company. The word of mouth is considered as one of the most important source of attracting its customers. The customers generally prefer the comment or the experience of other customers before availing online shopping service. ASOS Company is facing strong competition from its competitors in this industry; therefore the company is required to strive hard for sustaining in the market and gaining competitive advantage over its competitors (Chaffey, and Chadwick, 2012). Conclusion ASOS adopts various alternative strategies for increasing its customer base and market share in the industry. The concerned company mainly focuses on tailoring the needs and requirements of its customers. It developed its websites in such a way that the customers can visit the sites in various languages. It emphasized on the use of videos, since it is more attractive as compared to the plain photos. It offered convenience to its customer for receiving online services. In order to build strong network with its customers it makes the best utilization of the internet and social networks. References ASOS Plc., 2015. 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Asos reveals it has cut marketing spend by 16% as it continues to focus on lowering prices. [Online]. Available at < https://www.marketingweek.com/2015/04/01/asos-cuts-marketing-spend-by-16-as-it-reveals-half-year-results/ > [Accessed 23 June 15]. Johnson, G., Whittington, R. and Scholes, K., 2011. Exploring Strategy. Harlow, London: Prentice Hall. Joshi, R. M., 2005. International marketing. New York: Oxford University Press. Kumar, V., 2008. Customer Lifetime Value: The Path to Profitability. Netherland: Now Publishers Inc Lasserre, P., 2012. Global strategic management. Singapore: Palgrave Macmillan. Meng, S. K. and Chatwin, C., 2013. Measuring E-Marketing Mix Elements for Online Business. International Journal of E-Entrepreneurship and Innovation (IJEEI), 3(3), pp. 13-26. Onkvisit, S. and Shaw, J., 2009. International marketing: strategy and theory. New York: Routledge. Proctor, T., 2014. Strategic marketing: an introduction. New York: Routledge Vizard, S., 2014. Asos: ‘We are investing in price first and marketing second’. [Online]. Available at < https://www.marketingweek.com/2014/12/09/asos-we-are-investing-in-price-first-and-marketing-second/ > [Accessed 23 June 15]. Appendix Figure 3 Retail sales of ASOS over the years Figure 4 Numbers related to ASOS Figure 5 Experience pyramid of customers Read More