Asos had to make a number of tough decisions during the height of the Covid-19 pandemic to mitigate the impact on its business. This included turning off its next day delivery service for seven weeks in the UK and increasing its standard delivery proposal to 11 days.
While these are what CFO Matthew Dunn describes as the “cornerstones” of Asos’ proposal, he had to make the changes to make sure he didn’t disappoint customers or strain his supply chain. to take excessive risks. The key to ensuring there was little negative backlash from customers was to be âopen and transparentâ.
“We made a number of decisions with customers to avoid driving demand that we couldn’t serve effectively to make sure we didn’t disappoint customers on our delivery promise and also to make sure no one was taking the risk. unwarranted in our supply chain, âhe said, speaking on a call with analysts after the brand’s latest results.
“[This is] something that we were clear on with customers before the point of order. Our capabilities here are the cornerstone of our client proposition and we believe that open and transparent communication is essential to building trust with our clientele.
Allegations about rival Boohoo’s supply chain – that Leicester factories that supply the fashion company are guilty of exploiting workers who failed to pay minimum wage or provide adequate protection during the pandemic – have also led Asos to realize the importance of the messages it communicates.
The brand had already started talking about areas such as supply chain, sustainability and recycling with customers, but says it is “always more important”.
Our delivery capabilities are the cornerstone of our customer proposition and we believe that open and transparent communication is essential to building trust with our customers.
Matthew Dunn, Asos
âOne of the things that we build into our communications, and we were doing more of it anyway, is telling stories about how we protect the people in our supply chain, how we make products with use. final in mind, how we source cotton sustainably, how our clothes can be recycled, how our packaging is recyclable, âexplained CEO Nick Beighton.
âIn light of Boohoo’s claims, it is increasingly important to tell these stories to customers about what we do on their behalf. “
Asos sales rose 10% to Â£ 1 billion in the four to 30 months, as the retailer noted “steady improvement” despite the Covid-19 crisis. UK sales fell 1% from the same period in 2019 to Â£ 329.2million, while international sales rose 17% to Â£ 654.1million.
The online retailer increased its active customer base by 16% to 23 million during the period, noting strong growth in new international customers. The company attributed its agility to refocus the product line in response to customer demand, focusing more on casual wear and loungewear as demand for evening dresses, formal wear and footwear s ‘collapsed.
The company also ârelaxedâ its promotional schedule and cut back on performance marketing spending, in part to ensure it could meet demand. However, customer engagement remained strong, with Asos calling for its performance on social media. May was a record month with 9 million likes, comments and shares, up 90% from previous highs.
Asos has now returned to a “more normal” promotional schedule, but Dunn admits that the fashion promotional environment is “busy”, although such levels are not “out of the ordinary”. The company is preparing as usual for Black Friday and Christmas while showing flexibility, especially around the product mix. âFlexibility is the key,â Dunn adds.
Nonetheless, Beighton believes Asos is in a good position to emerge from the pandemic. âWe are on the right path to becoming a stronger, more resilient company. We believe that we [saw] 10 years of digital disruption in the past four months, we are well positioned in this context.