Money

Are ASOS still the top retailer in the UK?

Published

2 days ago

September 18, 2024

ASOS through the years

Founded in 2000, ASOS (As Seen On Screen) emerged as one of the leading online fashion retailers in the UK, catering to a global audience with its wide selection of clothing, accessories, and beauty products. Initially launched as a platform where customers could buy outfits similar to those worn by celebrities, ASOS quickly grew in popularity, particularly among younger, fashion-conscious shoppers looking for affordable and trendy options.

Over the years, ASOS expanded its offerings and developed its own in-house clothing line alongside the 1,000 brands available on its platform currently. The company capitalised on the e-commerce boom in the early 2000s, building a reputation for fast fashion, variety, and customer service. ASOS became a fashion powerhouse in the 2010s serving millions of global customers, innovating through their app, free returns policy and influence partnerships which are continually more important.

However, despite its early success, ASOS has recently faced significant challenges.

ASOS’s First Operating Loss and 2023 Financial Decline

In 2023, ASOS reported its first-ever operating loss of £248 million. This was a significant blow, as it came after years of impressive financial growth.

Revenue for the year totalled £3.54 billion, which marked a 9.9% decrease compared to 2022.

One of the main factors behind the financial decline was the decrease in active customer engagement. ASOS had 23 million active buyers in 2023, with around 40% of these coming from the UK. While this is still a large customer base, the overall number of orders placed dropped dramatically, from 98.3 million in 2022 to 83.7 million in 2023. This decline in consumer activity highlights the difficulties faced by online retailers amid changing market conditions.

The average basket value increased during this period, rising to £40.88 in 2023 from £38.21 the previous year. This suggests that while fewer orders were placed, customers who did shop at ASOS were spending more per transaction. However, this was not enough to offset the overall decline in order volume.

Several factors contributed to ASOS’s struggles in 2023. Inflation and the cost of living has reduced consumer spending across various sectors including fashion. Households have less disposable income for non-essentials. The rise in competitors and an increase in retailer apps makes it harder for ASOS to maintain its dominant position. Many shoppers are starting to increase their sustainability when finding new items, this includes finding second hand options or shopping less often. This could impact the amount of orders placed with ASOS in 2023.

How ASOS maintained popularity

Despite these challenges, there are several strategies that online retailers like ASOS can employ to maintain or regain popularity in a highly competitive marketplace. First, customer experience remains paramount. Offering features like free and easy returns, fast delivery, and personalised recommendations can encourage customer loyalty. ASOS, the user-friendly app with a vast range of brands, already has a strong foundation in this area, but continual investment in enhancing the online shopping experience will be key to staying ahead.

ASOS is also known for its ability to offer the newest styles and trends at affordable prices to keep up the fast changing landscape of fashion as well as keep up with other fast fashion competitors. Online retailers must balance being trend-responsive with sustainability—an area where consumer expectations are shifting. As more shoppers become conscious of the environmental impact of fast fashion, offering sustainable options and transparent business practices can be a powerful differentiator.

Another crucial factor is adapting to new marketing strategies. The rise of social media and influencer culture has significantly changed how consumers engage with brands. ASOS has a history of successful influencer collaborations, but as digital marketing evolves, it needs to embrace new platforms like TikTok and leverage the power of short-form content to reach younger audiences.

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