Emmanuelle Koffi, a 20-year-old Parisian bought her designer sweatshirt from Asos, “my fav website ever”.
Since rising from the embers of the first dotcom bust, the company has earned a fair claim to being Britain’s first global shopping giant.
Worth close to £1bn more than Marks and Spencer, the London-based online fashion store has thrived even in the US, long a graveyard for mighty British retailers, including the country’s largest clothing chain.
Now Asos is using Ms Koffi’s image to help sell the sweatshirt, too.
This is the third picture that Asos has picked up after she posted it on Instagram. Now it appears on the company’s social media feeds, and a gallery on the Asos website that is a kind of exhibitionists’ catalogue, where you can click “buy” to copy her look.
“Clothing keeps you warm and covers your modesty,” says chief executive Nick Beighton, explaining that Asos thrives higher up the hierarchy of needs. “Fashion is expressing what you feel in that moment. Our daily mission is to create and curate products that inspire twentysomethings.”
That mission was looking rocky four years ago when the company issued a string of profit warnings after a fire at its warehouse and problems with its international websites.
But lately it has met spectacular success. Asos sales soared 33 per cent in 2017 to £1.9bn, the fourth time that revenue growth has exceeded 25 per cent in the past five years.
The company “has made the transition from a retail business to a verb in the eyes of its target market”, says John Stevenson, an analyst at Peel Hunt. “[They] now regularly ‘Asos things’.”
Part of that is luck. When Asos started out 17 years ago, few thought that internet shopping had a future beyond books.
But fashion is now the most UK’s most popular online category, according to market research company Mintel, which estimates that ecommerce accounts for about one-quarter of all spending on clothes. It says that British consumers spent £16.2bn online on clothes, accessories and footwear last year.
The trend has created a windfall for Asos and its peers, including UK rival Boohoo, Amazon-owned Zappos and Germany’s Zalando, while putting high street chains in a funk.
M&S reported steepening reversals in its clothing business over Christmas, snuffing out hopes of a revival. New Look, another big UK fashion chain, is struggling to staunch double-digit declines in same-store sales. And in the US, Macy’s and Sears both announced yet another round of store closures in January.
It also helps that, by comparison with store networks, online shops are easy to run.
Because they keep stock in a few big warehouses rather than hundreds of widely dispersed stores, they can stock more products in smaller numbers. And they need fewer staff to make a sale.
That makes Asos less like a retail chain than a high-tech image factory. Its head office is housed in an art deco former factory building in north London that once made modish cigarettes.
“It’s a strange place,” says a corporate veteran who spent half an hour in the lobby recently, mingling with computer programmers, clothes designers, photographers and accountants. “You’re sitting in reception, you look up from your spreadsheet, and suddenly you’re sitting next to a model in a dressing gown.”
On the walls, electronic maps pulsate to the rhythm of customer orders, while the selling power of every fashion model and every garment is tracked by a model of the statistical kind.
A suite of 11 photographic studios are part fashion show, part production line, shooting still images and catwalk videos of thousands of new lines every week. “The pictures are really great,” says Ms Koffi. “You get inspired.”
Asos has ploughed the proceeds of growth into better delivery services and new infrastructure that help shorten the wait between inspiration and gratification, keeping profit margins at about 4 per cent even as it becomes more efficient.
“Every so often they might say, ‘We cut our delivery time to New Zealand, and that cost us a bit of margin but we thought it was a great thing to do to keep sales humming away’,” says Andrew Hughes, an analyst at UBS.
Mr Beighton has also spent money on finding ways to make its websites seem more in tune with national competitors, even though most decisions are made in London.
Prices are fixed in local currencies, so they no longer fluctuate with exchange rate movements. Promotions are timed to local events, such as Thanksgiving in the US or the Melbourne Cup in Australia.
And he has bet on continuing success, investing in big warehouse operations in Germany and the US that will only pay off if the company’s extraordinary growth streak continues.
Mr Beighton reckons that Asos will soon have the logistics capacity to handle £4bn worth of sales, double that of today, more than half of which comes from outside the UK.
“Everything could always go wrong,” he says, “[so] we stay very restless, very focused on our customer proposition.”
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