Given that the UK has fully embraced e-commerce and Internet shoppers now contribute more to the nation’s GDP than other country in the G20, it is perhaps unsurprising that it spawned one of the world’s leading online retailers – ASOS (As Seen On Screen). When launched in 2000, the website was aimed at providing consumers a tool to buy clothes and accessories that had been worn by celebrities, or otherwise items ‘As Seen on Screen’, but has since grown to a global online fashion store that has over 65,000 products that are targeted at the ‘20-somethings market’. ASOS ideal customer is a female, 20 year old, fashion-lover: an avid consumer and communicator who are inspired by celebrities and the media. ASOS aim to gain an increased understanding of their target customer so they can offer them the fashion they want, they do this by building an online relationship.
ASOS ideal customer would have online, digital lives to ensure the instant access to information as ASOS is web-accessible on any device they happen to be using – mobile, tablet or laptop/PC. ASOS sells a wide range of brands to target different individuals. ASOS sell their own label and other world-renowned brands, and also give individuals and boutiques the chance to sell, new and pre-worn fashion, through their ASOS Marketplace channel. ASOS now has eight local language websites (UK, US, France, Germany, Spain, Italy, Australia, China and Russia) but also provides free shipping to 234 countries in total. Its website attracts 29.5 million unique visitors a month (excluding mobile) and has 14.8 million registered users. With the Group’s chief executive recently claiming that £1 billion in annual sales are firmly in the company’s sights, ASOS is truly an online giant. How does ASOS use the Internet?
ASOS use the Internet in a range of different ways to strive to gain the most from the company. As the company is online only, their main use of the Internet is through their own website. By using their website they can convey the company’s message, to inform existing and potential customers of the features and benefits of the company’s products and/or services. This enables the customers to browse through the products available and purchase them online at their own convenience. As customers of ASOS become part of the company by having their own personal accounts, ASOS can use direct mailing when promoting new offers, products and services. They can also use direct mail to support customers when tracking orders placed online. ASOS can also use the Internet to promote the company through Search Engine Optimization (SEO).
Search Engine Marketing (SEM), which is marketing a website online via search engines, either by improving the site’s ranking through search engine optimization (SEO), buying pay-per-click (PPC) ads or purchasing pay-for-inclusion (PFI) listings in website directories. By doing this, ASOS can use popular search engines such as, Google and Yahoo!, to sponsor any links of theirs, this instantly gives them a competitive advantage over competitors. ASOS can also use the Internet by advertising through banners etc. Social Media is another way ASOS can use the Internet. Social media marketing, this can involve social networks like Twitter, LinkedIn, and Facebook. ASOS can use these sites to gain customers and also enhance the popularity of the company. The products provided by ASOS target a range of customers with a wide array of high street and designer brands. These are all promoted alongside ASOS own brand to gain an increased recognition from potential customers.
What are the benefits?
By using the Internet, ASOS have been able to obtain a number of key benefits. The main key benefit for ASOS is the ability the Internet brings to provide a service to a wider target audience. The convenience of the store and the 24/7 access enables ASOS to obtain an increased amount of customers. By being an online store they can also target customers worldwide, which further expands their ever-growing target audience. Another benefit of using the Internet as a business is the ability to use direct marketing, via Email, text etc. ASOS are able to contact customers directly through their account information and they do this to inform them of the latest sales/promotions. This is a huge benefit for ASOS in terms of sustaining customers and it builds a customer/company relationship and increases the loyalty of the customers.
What challenges did ASOS overcome?
In order to excel to become one of the world’s leading online retailers, ASOS have had to overcome a number of challenges. The most substantial challenge, which greatly impacted ASOS financially, was in the form of a warehouse fire in 2006. The warehouse fire caused 45% of stock with an overall profit of 3.8million to be lost; this incident saw a great downfall for the company. Unfortunately, the incident fell during December, which resulted in the loss of thousands of Christmas presents that had also been paid for by customers worldwide. Not only was this a financial issue this also hindered ASOS reputation and brand image due to the lack of trust and decreased loyalty from their customers. In the wake of the 9/11 and the collapse of the dot-com boom craze, ASOS shares were falling towards one of the worst market collapses for a generation.
An instant decrease in share prices similarly caused a challenge for the business. ASOS also faced challenges with the lack of support from high-end, designer brands. To build the companies reputation, attracting larger fashion labels was crucial. By 2004, ASOS was selling stock from a number of prestigious brands; this greatly increased customers and therefore increased profits and popularity of the site. The brand image including the re-brand of the company from As Seen On Screen to ASOS, which was another vital decision ASOS had to make to suit customers demands and needs. By doing this they tailored their company to fit the desired needs of their customers, which succeeded in building the relationship between the company and the customers. After the incident of the warehouse fire, ASOS faced financial struggle and faced interim payments over 12 months to strive to put the business back on track. They thrived in doing this with a growth of 116% in 12 months – and revenues of 42.6 million. Today, ASOS still faces challenges with issues such as, technical difficulties and securing payments online.
How do they meet the customer needs?
As a highly successful company, ASOS meet customer needs in a number of diverse ways. The website itself aims to meet customer needs by targeting their design and layout to appease customers. The website features a navigation bar, drop down menus, a help page and contact details for customers. When featuring a product on the site, ASOS offer customers with a wide range of colour and size options, catering for customers needs. The website also makes this easy for customers to find their desired product with the use of filters when browsing products. The website is also used to promote sales and special offers for customers all year round. Recently ASOS have expanded their services by providing, ASOS VIP Premier (for just £9.95 a year). This allows loyal customers to become a VIP member of the site with extra services such as unlimited next-day delivery, free returns and early access to sales.
This is highlighted to enhance customers desire to shop with ASOS and also provides increased benefits when becoming a VIP ASOS customer. As well as the ability to become an ASOS VIP Premier customer, customers can join the website (free of charge) with their own personal account. This includes sharing personal details when ordering and tracking products. Due to security, some customers may see this as an off-putting aspect to ordering online. However, ASOS ensure security recognition, in the form of a verified icon, focuses that ASOS is a secure site. By becoming a member, customers are automatically placed on the direct mailing list. This allows ASOS to keep customers up to date with special offers and also help to sustain customers. As well as using their own site, ASOS also uses a variety of social networking sites to help their customers feel more connected to the business. This also enables them to be informed of any updates.
ASOS also use popular search engines, such as Google and Yahoo! through sponsored link; this means that when users search ASOS, the page is automatically the first link to appear on screen. By using sponsored link this enables ASOS to gain recognition of customers and also makes it more convenient and easier for customers to find the page. To meet a wider customer audience, ASOS ensure their site is accessible to all, with the option of 8 different language and currency selections to suit a specific customer. This meets customer’s needs as it enhances ASOS target audience therefore generating an increased profit for the company.
How don’t they meet the customer needs?
Despite having a wide range of benefits that do meet ASOS’ customer needs; there are still a number of factors that hinder success for ASOS. Primarily, with ASOS being an online only business, there is no direct service for customers. Although the website provides an email service there is no direct service available for customers, which means customers can not ring the business or speak to an employee face to face. This may be a huge disadvantage to the ASOS, as they do not provide a particular service that customers may feel is a must. The website itself, although fresh and tidy with its black and white colour scheme, when browsing the site customers may find the design to be boring and dull in comparison to an exciting and living shopping trip experience.
This may hinder customer’s use of the site and result in a loss of customers and profit. As well as the design of the website, images of products featured on ASOS, may also deter customers desire to purchase from the website. Some of the images on the ASOS website are unreliable which makes it hard for customers to gain a realistic vision of what they are potentially purchasing. This could possibly be a disadvantage for ASOS as customers may face disappointment on the arrival of their purchase, as they do not have the ability to view the product in high detail before buying. When browsing ASOS, it can be highlighted that some of the pages show a different layout than others on the website. This could be seen as inconsistency within the website and give customers an unprofessional image of ASOS.
In conclusion, ASOS is effective in meeting the desired needs of its customers. The figures in 2007 of 42.6 million in comparison to the predicted turnover of £1 billion expected by 2015 show the growth of the company in past years. This growth is down to the overall service providing by ASOS and use of the Internet. This is shown through benefits such as; navigation of the website, popularity through other sites, including search engines; direct mail and accessibility. Despite this, there are several drawbacks to using Internet market, which may prevent ASOS to strive to reach their fullest potential. Drawbacks within; overall customer service and inconsistency throughout the site, which may be seen as a huge disadvantage when using the website and may hinder the future growth of ASOS in the aspect of gaining and sustaining current and potential customers.