In todays world, the technology world as widely created a digital age with explosive growth in the information, computer and other digital technologies. This digital age has a multiplier impact on the way companies bring value to their end consumers. This digital era has also brought upon a new wave of relationship building tools, communication with consumers and advertisement. According to Kotler & Armstrong (2010), internet is connecting users around the world with each other. The internet has brought in changes in the way the businesses are conducted. Yannopoulos (2011) stated that internet is an extremely critical success factor for business organizations in today’s competitive world. One of such example is of thriving online retailing that is on boom worldwide.
As Seen On Screen (ASOS) has been operating in similar market segment of online shopping industry (ASOS, 2017). This e-marketing report is intended to focus on ASOS and to provide it with information about technology and intuition to utilize trends and opportunities arising in digital media. A quick overview of the organization is given below.
As Seen On Screen (ASOS) is a global fashion destination with fashion related content. ASOS sells over 80,000 brands and owns several branded products that it sells through localized web and mobile experiences (ASOS, 2017). It was founded in 2000 with its first operation in London, United Kingdom and later on launched its website in Australia in 2012 (Asos timeline: from tiny startup to dressing Michelle Obama, 2014). It offers different styles of fashionable clothing and accessories at affordable prices.
In Australia, the online shopping industry has experienced $18.0bn revenue while converting $721.3m into profits (IBISWorld, 2016). The annual growth rate of Australian online shopping industry has remained to be 16.2% over 2012-2017 (IBISWorld, 2016). There are total 47,153 businesses that operate in this industry. Out of whole online industry segment, 20.6% is held by clothing, footwear and personal accessories (figure 1 below).
ASOS launched its website for Australian customers in 2012 targeting “20 something” customers (Waite, 2014). The target market of ASOS is the web-savvy, regular internet users and fashionable men and women aging between 16 to 34 years who demand unique and inexpensive clothes that could be shipped to them at their doorstep.
ASOS is operating in a niche market on online retailing and marketplace (Hammersley, 2016). A niche market is the one in which a smaller section of market segment is targeted. It consists of the small group of consumers whose needs and demands can be easily identified. ASOS also deal in a marketplace where niche retailers can sell directly to the ASOS consumers (Hammersley, 2016). By following a niche marketing strategy, ASOS is able to stretch their product offering while creating a wider proposition for engaging the target demographics.
Mission of ASOS is to become world’s number one online shopping portal for fashion loving people.
The objectives of ASOS Australia are:
To gain the larger Australian Clientele
To rebrand the ASOS web as a portable one-stop shop
TO revamp the ASOS’s image as a lavish brand offering large number of fashionable products at affordable price
This e-marketing strategy report would be used for attaining the mission and objectives of ASOS through digital marketing. The most important objective of this report is to acquire traffic to ASOS web portal. The objective of this e-marketing plan is to increase the consumer traffic and loyalty to ASOS’s website. The following are the main goals of this e-marketing report.
To acquire traffic through digital marketing
To raise awareness through buzz media by getting 2500 potential customers to talk about the brand every quarter
To retain the customers loyalty and preference of 13.4m active consumers
To improve conversion ratios by 10% by December, 2017
To attract 20m unique users a month (previously at 13m a month)
The goals will be achieved through providing:
Platform for interactive communication with customers
Communicating a clear brand identity
Source of inexpensive and trendy lifestyle information
Situation analysis describes the current environment in which the business operates. It provides an answer to question where are we? It can be done through various tools like PESTLE, PEST and SWOT (Green & Williams, 1996). This study will utilize SWOT analysis for analyzing the current strengths, weaknesses, opportunities and threats faced by ASOS while conducting its business.
SWOT is a framework that is used for internal analysis of a company while delivering a resilient and consistent foundation for further analysis (Bohm, 2009). The SWOT analysis for ASOS is given below.
The strengths of ASOS are:
Vast portfolio of products maintain consumer interest
Use of social media for increasing awareness amongst consumers of the new and current products
Celebrity endorsement allows the ASOS consumers to feel connected with them
Blogs and getting to know the insiders, both strategies allow ASOS consumers to make connection with the brand on a personal level
Operating fully online saves time and cost for achieving global expansion.
Low cost of production as users sell merchandize
Fashion destination for twenty something gives a marketing edge to ASOS
Experienced with social media marketing
Free shipping and free returns to its global consumer base
Catwalk feature of website allows consumers to see how the product will look like while wearing
ASOS brings consumers and sellers together on one platform for buying and selling products
64% growth rate outside United Kingdom (ASOS, 2016)
38% growth in retail sales in 2017 as compared to that of in 2016 (ASOS, 2016)
4 m active customers in 2017 (ASOS, 2016)
+26% total revenue growth rate (ASOS, 2016)
The weaknesses of ASOS are:
No physical store (only online shopping)
Shipping time differ
ASOS does not market itself on any offline marketing platform
Not well-known in Australia
Not all cards are accepted here
Almost 30% of the purchases made on ASOS are returned to the company which results in additional costs to ASOS (ASOS, 2016)
Total cost is around 100 million pounds which is faced by ASOS due to free shipping provided by ASOS. (ASOS, 2016)
The opportunities of ASOS are:
Expanding to other countries like BRIC and MENA market that are trade oriented markets.
Online retailing is also increasing and now occupies around 12% of retail sales in Australia (Chaffey, 2014).
Digital media advertisements
Globalization is extending the base of retailers as they are now more able to connect with each other across the globe for growing their businesses
Growth in the popularity of online shopping
Increase in mobile usage that aids people for making more purchases from mobile platforms
The threats for ASOS are:
Uncertain economic issues.
Other larger brands like Marks and Spencer, New Look and Tesco, have both physical as well as digital form of recognition due to which they also gain consumers through foot traffic as well as other online platforms.
Dependent on internet connection
No or lack of television and other offline advertisement usage
Seasons and climate factors due to different local fashion tastes as well as opinions will also impact the globalization
Small company and HR issues as in 2012 womenswear design director, product director, head of womenswear and branded accessories manager left ASOS (Drapers, 2014).
Some countries lack social media and internet coverage due to which social promotions do not reach them.
The main issues identified from reviewing the current digital marketing scheme of ASOS are several. ASOS, when compared to other main competitors, do not odder shopping credit to their customers as compared to its other competitors like Topshop, Newlook and Next (The Times 100, 2015).
The main issue identified in online marketing of ASOS is that it considerably failed to use email marketing as an opportunity for mobile that created usability issues amongst the customers. According to Alabama (2014), ASOS optimized email marketing for mobile but this optimization was not as good as that of Gap and H&M. Moreover, Rigby (2015) pointed out that due to overlapping of messages on mobile screen, high gaps in between the images and improper content led to complexity for users to read out the contents. Furthermore, Felsted (2014) insisted that due to lack of email marketing and mobile marketing, ASOS experienced reduction in online business profitability by reducing it to 18m pounds in 2015.
The product lifecycle depicts the stages that a product goes through over. These stages are introduction, rapid growth, maturity, saturation and decline. The marketing strategy in these stages should be different for ASOS.
Introduction: ASOS at this stage markets its products on its website by giving out links of items directly at homepage and the weekly newsletters.
Rapid growth: During this stage, ASOS ensures adequate stock and promote itself in magazines and newspapers.
Maturity: At this stage, ASOS reminds people about its products online through trend features on website and newsletters.
Saturation: ASOS markets its discounted products at sale prices at this stage.
Decline: ASOS looks for new fashion trends and sell outdated products elsewhere in the world where time lags in fashion industry are evident.
ASOS tends to benefit from its current product lifecycle approach due to its international market share as the fashion trends tend to vary between different regions of the world. Countries do not move in similar way when it comes to fashion industry e.g. winters in UK means summers in Australia.
Apart from using lifecycle approach, ASOS can use Boston Matrix Model as a product strategy for deciding upon the products to exile or to promote (Kotler & Armstrong, 2010). ASOS offers over 60,000 fashion and beauty trends of more than 1000 brands that includes its own labels as well as global designers and brands. The product mix of ASOS includes tops & T-shirts, blouses & shirts, dresses and jeans.
Based on the BCG matrix, ASOS has four choices i.e. to build, to hold, to harvest and to divest (Kotler & Armstrong, 2010). ASOS can use this BCG matrix by converting its question mark and star products into the cash cows of the future through extending promotions. For instance, marketing and advertising its newly launched star products and featured products through social media and celebrity endorsement can convert these products into cash cows. The dogs, the products with low market share and low growth, can be either removed through excessive sales, discounts, promotions and clearance options to new and existing loyal customers. The cash cows (products with high share and high growth), can be sold and the money earned from these sales can be used for developing and promoting stars.
According to Shankar & Bolton (2014), pricing is an essential part of any retail strategy. A pricing strategy can help the companies to determine the speed at which the company can achieve its marketing objectives and aims. ASOS has been using zone pricing strategy. Based on this strategy, the price of products is based on the distance between warehouse and point of purchase by the buyer. The prices of branded goods are priced as they are in other departmental stores. However, its own collection is priced competitively as compared to the other high street brands. At ASOS, self-branded products are offered at minimum price of $4 while reaching the height of $500 (ASOS, 2016). Users can easily find number of goods at different prices. The figure below shows how ASOS uses zonal pricing for a product that is same everywhere.
So, the price of skinny jean on ASOS.au is AUD73.00 while the same product is available at AUD59.33 in Spain. The problem with this strategy is that it is not insured from currency fluctuations. As in 2015, ASOS Australia experienced a slip down of its share prices by around 50%. A weak Aussie dollar against British Pound made products costly for Australian buyers as they had to face 15% increase in price due to currency depreciation.
Dynamic pricing strategy can work wonders for ASOS in Australia. It needs a 24/7 price monitoring system so that prices can change in response to the real-time demand and supply and other external shocks (Hirt & Willmott, 2014). Such a strategy would give ASOS a flexibility to increase or decrease the prices associated with sales in order to minimize losses and increase profits. Pricing intelligence software can scan thousands of products of ASOS while decreasing the burden of manual tracking of prices. AMAZON is already using this strategy and has experienced improvement in its gross margins by 10% in 2016 alone (Snyder, 2016).
ASOS uses multiple platforms for distributing its viral videos to consumers. Social channels are used reflecting ASOS’s belief that consumers utilize various platforms. At ASOS, the content is especially optimized for tablets and mobile phones (ASOS, 2016). Due to these multiple platforms, ASOS has become interactive, immersive and boundless. The greatest victory of ASOS lies in its free returns and free delivery that helps in differentiating ASOS and putting pressure on its rivals. ASOS has never advertised itself in magazines or TV (Burke, 2017). However, it has designed a special magazine for its loyal customers for raising awareness of its current and new products. This strategy of ASOS is known as above the line strategy. However, ASOS also uses the direct mail and newsletter marketing options for engaging the customers more. In order to enter the loyalty list, the customers give out their names and receive discounts (Mackenzie, 2016). This strategy is named as below the line strategy. The third strategy being used by ASOS is through the line. This consists of the aim of reaching mass audience through social media platforms. ASOS relies on this strategy as it advertises on Instagram and Facebook. Instagram users can use hash-tag feature like #AsSeenOnMe to showcase the lookout of the product on them (Mackenzie, 2016). However, in 2015, due to decrease in profits by 10%, ASOS had to cut down their marketing budget by 16%. According to current social media statistics, ASOS is the second most visited fashion website on the planet with 19.3m social media followers (+54.4% increase in 2016 as compared to 2015) (Mackenzie, 2016).
Right now ASOS has low accessibility and low price despite of being an e-commerce and m-commerce store with no brick and mortar shops. Upon comparing with other e-retailers like Boohoo, Shopbop and Net-a-Porter, ASOS was found out to be revolving around average price point of $610 as compared to Boohoo’s $38 and Net-a-Porter’s $14400 (Mackenzie, 2016). The accessibility is measured through number of countries in which e-retailer ships. ASOS ships to 140 countries while Boohoo ships to 225 countries. Currently, ASOS has its marketing office in Sydney apart from New York, Berlin and Paris. The recommended e-marketing promotional strategy is discussed below.
There are six main types of digital media channels including search marketing, online partnership, social media marketing, opt-in-email, interactive adverts and online PR.
Search marketing: It includes search engine optimization, paid search, pay-per-click and paid for inclusion feeds (Kotler & Armstrong, 2010)
Online PR: It includes media alerting, brand protection, community participation and publisher outreach (Kotler & Armstrong, 2010)
Online Partnership: It includes affiliate marketing, sponsorships, co-branding, link-building and widget marketing (Kotler & Armstrong, 2010)
Social Media Marketing: It includes viral campaigns, consumer feedbacks and audience participation (Kotler & Armstrong, 2010)
Interactive Ads: It includes sponsorship, Ad networks, contra-deals, Google Ads, Facebook Ads and behavioral targeting (Colborn, 2012)
Opt-in-email: It includes e-newsletters, e-magazines, co-branding and house list e-mails (Colborn, 2012)
In SEO strategy, the six heading elements are used from H1 to H6 with no constrained headings order (Hennig-Thurau, 2010). These headers tags can aid in SEO efforts. ASOS can utilize the H1 tags on its landing pages for each of its product line. For example using SHIRTS & BLOUSES as H1 with a nice introductory paragraph written for users and wrapped in <p> tags can quicken the SEO effort (see figure below for clear view).
ASOS has been neglecting its internal link titles. Internal linking should not be overlooked as it is very beneficial and is often ignored by many retailers with online businesses like ASOS.