ASOS is a fashion retailer established in 2000 and has headquarters in London. ASOS is an acronym that stands for AsScreenOnScreen and is registered with London Stock Exchange as ASOS PLC. It is an online store with over 85,000 products, available in ten languages through a mobile phone application or website, and targets the youth in their twenties. Since its inception, ASOS has continued to produce impressive results due to an innovative marketing strategy. Secondary research methods will be used to collect the financial data of the company. This essay will use the PESTLE method to analyze the marketing environment of ASOS and identify the key factors in the marketing mix that are critical for its success.
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Performance of ASOS
ASOS released its annual financial report for the year ending 31st August 2021. It shows that the fashion store registered retail sales of 3.7 billion and a 20% increase in revenue (ASOS, 2021). There was a 13% increase in net income generated when compared to the same period last year. Total volume sales increased by 15%, a bigger proportion come from the United Kingdom which contributed 36%, followed by the European market at 18% and then the USA at 16%. However, due to lockdown restrictions, distribution expenses rose to £509.5M, a 15% increase from last year (ASOS, 2021). The number of visitors in a retail store directly translates to sales. The number of consumers grew by 12%, with the addition of 1.5 million active buyers.
Analysis of Marketing Environment
PESTLE analysis is an essential tool when analyzing the environmental factors that affect an enterprise. The PESTLE analysis method comprises six main areas: political climate, economic factors, social status, technological changes, and legal and environmental concerns (Schulz, 2019). The main factors likely to affect the business operations of ASOS are Brexit which is covered with a cloud of uncertainty, slow global economic recovery due to coronavirus, and fluctuations in foreign exchange rates since they operate in over 200 countries. Pollution poses a challenge to the manufacturing process, especially in using dangerous chemicals to dye fabrics and the generation of plastic for packaging. It is an energy-intensive process leading to a high carbon footprint, and coupled with the shipment of merchandise; it leads to global warming.
ASOS’ marketing strategy analysis will use the marketing mix model; it includes the seven Ps since it is a service industry. These ASOS marketing mix-based business techniques aid the brand’s success (Palmatier and Crecelius, 2019). This innovative marketing strategy has helped the global company attain its business targets by being competitive in the apparel industry.
Product and Pricing Strategy
ASOS is a leading online store that sells clothing, shoes, and beauty products directly to customers. The products are for both males and females and have an extensive marketing mix product portfolio of over 85,000 products. Customers can choose from more than 850 brands on the online marketplace (ASOS, 2021). ASOS has adopted an affordable and competitive pricing strategy. They have a wide range of products covering the whole spectrum of prices. The products in the store are of good quality but at a cheaper rate. They have mid-season and end-season sales in which they sell products at much-discounted rates. They are popular, especially in overseas territories, since they do not charge a delivery fee most of the time.
Place and Distribution Strategy
ASOS is a worldwide web-based platform for buying clothes and footwear. After customers have purchased the items, they ship to their specified locations. They have numerous warehouses in several locations around the United Kingdom from which they can send the merchandise. As a digital commerce leader, the company has retail operations in more than 200 countries with over 166,000 Click & Collect locations around the world.
Promotion and Advertising Strategy
ASOS’ primary tools for promotion and advertising are the website and mobile phone app. It sends emails and promotional updates to enrolled email addresses regularly. For their promotions, they frequently send out pamphlets and brochures through mail and deliveries. They have built social media groups and communities on platforms such as Facebook, Instagram, and Twitter to keep people informed about their offers and discounts. ASOS is an online company; it communicates with its consumers through social media campaigns and unique video and picture content.
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People, Process, and Physical Evidence
Since ASOS is an internet-based business, it has few workers compared to a physically present enterprise of a similar magnitude. Workers are only for critical departments such as customer service, marketing and branding, management, technical, and logistics (ASOS, 2021). The process of purchasing an item is different from a brick-and-mortar store. Upon selecting the desired clothes, they add them to the cart and pay via a credit or debit card. The ASOS platform is straightforward to use, and the most current discounts and deals are highlighted for customers to take advantage of them.
Target Market and Content
ASOS’s marketing strategy offers niche campaigns with highly tailored content to their target audience that youth in their twenties. As a result of targeted campaigns, the youth easily connect with the message, increasing visitors’ conversion ratio to customers (Akbar, Omar, Wadood, and Wan, 2017). The business understands its target market, wants, and expectations from the stores they prefer to purchase (Li, Larimo, and Leonidou, 2021). For example, the ASOS Facebook page share creative pictures, and students’ posts and even plays word games with its audience. Thus, ASOS understands their target audience, and how to engage them hence easily making them buy their designs.
Use of Essential Topics
ASOS has done detailed research on their target audience, the youth in their twenties, and understands how to please them. They have excelled by addressing subjects that the youth is passionate to hear. With a massive student audience, ASOS has made sustainable development and accountability two of the most important talking points in its marketing initiatives, connecting with consumers through topics related to them (Schulz, 2019). ASOS Twitter account shares the company’s commitment to integrating sustainability across the entire value chain. The two major goals are to achieve carbon neutrality and move towards a circular economy by 2030.
Rewards and Augmented Reality
ASOS is making use of the inequality marketing strategy by rewarding a selected group of customers for buying. Almost more than fifty percent of a business’s customers expect to be treated in a special way (Chan and Mok, 2018). ASOS embraced this marketing strategy by creating an entire Facebook page to assist students; its largest customer base receives a 10% discount on their purchases. ASOS is one of a few fashion stores to integrate technology into their marketing strategy. Augmented reality is built on the concept of digital overlays, which display virtual visuals alongside real-world images. Customers can now use the new ‘Examine My Fit’ tool to see how an apparel item looks on various body shapes (ASOS, 2021). These are not photos; they are digitally enhanced pictures that overlay a certain attire onto a figure that nearly resembles the customer’s body.
Marketing Creativity and Innovation Strategy
Because marketing is amongst the most creative fields, marketers must have the ability to analyze how competitors are implementing strategies and come up with new ideas for doing marketing differently. As illustrated by ASOS’s connection with basketball star Ovie Soko, the retailer’s marketing staff embraces creativity. This was strategic since the majority of ASOS’ customers are youth and value physical appearance. As a result of such partnerships, ASOS draws and interacts with a group of youth concerned about their appearance, precisely what a clothing brand wants. By embracing creativity, ASOS is just using old ideas in new ways, making it a world leader in the fashion industry.
Heavy Social Media Presence
ASOS has a special way of using social media to engage its audience. They allow their customers to showcase their buys on their website for fifteen minutes. Moreover, buyers can become their social media influences by sharing their outfits through Instagram under the hashtag #AsSeenOnMe. The company is excellent in digital marketing through social media platforms, leading to massive growth (Dave and Fiona, 2019). Recently they held four TikTok campaigns that turned out to be highly successful and received more than 15 billion total views (ASOS, 2021). This has helped increase sales and expand to other territories of the world, especially in new markets such as North America.
Prioritization of Customer Service
The company has put the customer first by replying to questions and complaints swiftly. Excellent customer service has helped ASOS increase its market size since consumers love to buy from responsive and fast stores (Burgess and Burgess, 2020). Unsatisfied customers receive a listening ear; hence, they do not cancel their orders (Viardot and Nylund, 2017). The store has a good reputation and addresses all issues not to go public and damage their image. Thus, they take care of their consumers, and in return, they always come back and buy again.
Areas of Improvement
Although ASOS has been successful over the years, there is still some room for improvement. A vital marketing strategy lacking is the creation of physical outlets that consumers can use to try out their outfits (ASOS delivers 24% sales and 275% profit increases – beyond the numbers, 2021, para. 10). Physical presence will increase sales by offering the opportunity to people who prefer to try out outfits before buying. Another opportunity lies in starting a loyalty scheme to reward returning customers. This will increase the rate of retaining customers and raise their store lifetime value.
ASOS was initially available only in the UK, but now it has become a global brand and is available in over two hundred countries. It has leveraged the following marketing strategies: partnerships, social media presence, campaigns, creativity and innovation, rewards and promotions, customer service, and trending technology such as augmented reality. One major success factor is unique collaborations with other brands and allowing them to sell their products on the ASOS store. Therefore, ASOS has grown tremendously and achieved a rare feat in the competitive fashion industry through digital marketing techniques.
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