Thursday, April 02, 2015

Asos Sacrifices Profits to Gain International Customers

Asos Sacrifices Profits to Gain International Customers:

'Asos' Magazine's most recent cover girl, Nicola Peltz. Photo: Asos
'Asos' Magazine's most recent cover girl, Nicola Peltz. Photo: Asos
The last time we checked in with Asos — that would be a month ago, to be exact — the retailer reported a big improvement in its international business. This was the result of an investment in reducing prices outside the UK to make them more competitive within local markets. The only downside to that move? Coupled with investments in Asos's global distribution network, it drove profits down 10 percent to £18 million in the six months leading up to February 28.

That's not to say it wasn't worth it: making prices more appetizing to international shoppers while expanding fulfillment capabilities for those same shoppers is only going to help build Asos's customer base abroad.

Moving forward, to further incentivize shopping, the British e-commerce site is also working on developing its convenient "Pick-Up-Drop-Off" network, which blurs the line between online and offline shopping by allowing customers to collect and return clothing to locations near them. (Unfortunately for U.S. shoppers, that service is only available in France, Spain, Belgium, Luxembourg and North London.)

Despite that drop in profit, Asos is doing fine: revenue grew 14 percent over the six month period, to £550 million, and UK sales were again a standout, having grown 27 percent. Even as Asos expands its international reach, its British fans still want more, more, more.

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