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The Truth Behind the Rumour: Is ASOS Opening Physical Stores?

Rumour had it that the British online fashion and cosmetic retailer ASOS planned to open an actual physical store for customers to try on and buy clothes. This seemed to be bucking the trend slightly with high street retailers falling by the way side due to the growth in online sales. Does this mean the start of another change in trends or is it a one-off?

Why is ASOS one of the UK’s biggest e-commerce success stories?

From a pestle and mortar used by Jamie Oliver to a wallet that appeared in Pulp Fiction: founded in London by Nick Robertson, ASOS launched in 2000 with the name “As Seen on Screen”, selling a profusion of goods and fashion sported by celebrities in films and on TV. The company adopted the Asos acronym in 2002. It launched its first own-label womenswear in 2004, the year the company made its maiden profit of £120,000. Its creations were a big success, worn by singer Rihanna and by Michelle Obama, who sported a chequered red-and-white ASOS dress on the campaign trail with her husband in 2012. The British online store ASOS is classified as the best online shopping site in the UK and overseas. Thanks to social media channels, especially Instagram,  the British online retailer created a global online community of fashion lovers, building a loyal customer base across the world. All that happened for four reasons:

  • technological investment
  • focus on growth
  • accessibility on mobile devices
  • international markets.

The company continued expanding their reach by improving the ASOS experience internationally. According to the 2013 report, ASOS delivered to 237 countries and territories. Its international strategy included:

  • dedicated websites in strategic country markets (the UK, US, France, Germany, Australia and Russia)
  • in-country teams and locally-relevant product offers
  • payment methods
  • currencies
  • delivery options.

ASOS won’t be making an Amazon-style move into physical shops

It turns out that Nick Robertson (ASOS CEO) claimed to the BBC journalist Kirsty Wark that the idea of opening a store was counter-intuitive. He said: “When we ask new starters what percentage of fast fashion they buy online, I get figures of 70 to 80%. Why would I open a store?” At the moment, Asos won’t be following Amazon’s footsteps, bringing its brand onto the high-street. In fact, would it be the right strategy to invest money and time in physical stores? The phrase ‘clicks and brick’ or ‘clicks and mortar’ have never been so relevant! Retailers such as John Lewis have had great success by understanding how the internet and their existing shops can work together. John Lewis announced in February 2013 that it will extend the reach of its online empire via a network of thousands of corner shops joining the Collect+ scheme. The only difference with ASOS is that its starting point was online rather than high street retail. Therefore, companies like John Lewis realised there is still a huge market of shoppers wanting to touch, feel and try on items. Once people become confident in buying from a particular retailer they will start to purchase more online.

Should ASOS open physical shops?

ASOS now have the financial power to be able to open a store which is far more costly than an equivalent website. If you ask me, this is now the perfect strategy for opening and growing a retail business: start with an E-commerce website which has fewer overheads than a high street shop, grow the customer base until the sales figures can finance a shop opening. You can select a few profitable places to open and probably get cheaper rent and rates due to shops closing because of their traditional business model weighed them down. Then you have the perfect combination of Clicks and Bricks!

 

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