Nick Robertson FASHION ENTREPRENEURS * MA CONTEMPORARY FASHION BUYING * ANJINI V DUGAL * Class 1 * 31th May 2018 *
contents
4. Description of the Internal Environment 1. Introduction 4.1. Direct rivalry from direct competitors 1.1 Brand timeline 4.2. Bargain power of customers 2. About 4.3. Baragin power of supplier 2.1 Eary life 4.4. Alternative products 2.2 How it started 4.5. Potential new comers 2.3 Problems faced 2.4 The exit & Divorse 3. Description of the External Environment 3.1 70’S 3.2 80’S 3.3 90’S 3.4 2000
5. Conclusion 6. References
1
introduction The following paper is the study of the entrepreneurial journey of Nick Robertson, Co-founder & former Chief Executive of asos.com. An e-commerce website founded in 2000 in the United Kingdom (Goodley, 2015). The website sells cutting-edge fashion and offers a wide range of fashion-related content, making it the hub of a thriving fashion community. Over 80,000 branded and own-brand products are sold through localized mobile and web experiences and delivered from fulfillment centers in the UK, US, Europe and China to almost every country in the world (ASOS, 2018). Described as being both confident and self-effacing, Asos co-founder Nick Robertson seems to strike the balance between authoritative and practicality to a degree seldom seen. In just fifteen years, Robertson, led ASOS to become UK’s most popular fashion website. Fellow directors have often described him as being realistic about what he does know and doesn’t know, and has the confidence to build a strong team around him to fill the gaps in his knowledge. His insight into what makes a successful fashion website stems from common sense and practical experience, rather than formal education (Scotsman.com, 2010). He was awarded an OBE, Most Excellent Order of the British Empire in 2011 (Brianne,2015).
1.1 BRAND TIMELINE
2000 2001
ASOS Founded
ASOS PLC Holdings admitted to AIM on London Stock Exchange
2004
Introduction of ASOS label for Women Reports a maiden profit, with sales almost doubling in its first half.
2005
Buncefield Fuel depot explosion, ASOS closed for 6 weeks
2006
First UK online store to launch catwalk videos of models wearing products.
2007
Launched ASOS Magazine distributed throughout the UK monthly Introduced ASOS own label for Men.
2008
Launched ASOS Outlet. Won Online Retailer of the Year Awards from the Cosmopolitan Online Fashion Awards, Retail Week Awards, In Style Shopping Awards and the Company High Street Awards.
2009
Launched Little ASOS, ASOS Black, a luxe, evening wear collection.& the Designer Store. Launched ASOS Life, a section of the site which allows users to create their own profiles and communicate through forums, blogs and groups.
2010
2011
Launched the Green Room, a section of the site to target ethically minded shoppers. Launched USA, French and German site. Launched ASOS White, a daytime-friendly collection. Launched ASOS Mobile, whereby users can browse the site on their mobile phones by product sub-category, brand or by trends. Launched ASOS Marketplace, an online fashion community where customers can sell directly to each other. Launched Facebook Store at the end of January, which allowed customers to make purchases from the store without having to leave the social-networking site.
ASOS receives the Best Pure Play Etailer Award from the Drapers Etailer of the Year Awards. Chief Executive and founder of ASOS, Nick Robertson receives and OBE for services to the fashion industry in the Queen’s Birthday Honours List. IiPhone and iPad app launches along with Australian, Italian and Spanish sites
2012
First international office in Sydney opens, followed by New York
2013
More international offices open in Lille, France, and Berlin; Russian and Chinese language sites launch
2014
Fire in their Barnsley warehouse caused them to stop taking orders for almost three days. March More than £400m wiped off Asos' market value after profit warning June £1.5bn wiped off retailer's market value after another profit warning
2015
Nick Robertson leaves Asos has over 4,000 employees and is the UK’s largest independent online and fashion beauty retailer.
2017
ASOS launched its makeup collection Teamed up with GLAAD, to launch a gender-neutral capsule collection.
2018
In February 2018, Asos launched activewear line for both men and women.
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about 2.1 EARLY LIFE
The ascent of Asos founder Nick Robertson isn’t a story of newfound wealth. The 50-year-old is the child of a highflying publicizing official, the great grandson of the founder of fashion label Austin Reed and younger brother of millionaire Nigel (Robinson, 2014). Like his sibling Nigel, Nick Robertson neglected to get anything over a “D” at his A-levels while an understudy at the independent Canford School in Dorset.However, this didn’t prevent him from getting an occupation as a media purchaser in the wake of leaving school at 18.Unlike most, Robertson didn’t especially require the work. He had a comfortable upbringing in suburban Surrey financed by his father’s career as a successful advertising executive. In any case, the more youthful Robertson (Scotsman.com, 2010) went ahead to work for publicizing office Young and Rubicam until 1996 before moving to rival Carat(Robinson, 2014). Soon, however, at the age of 29, he got involved in the business of product placement and began his own office, Entertainment Marketing, in 1996. Providing “free props, for example, jugs of Carlsberg or boxes of Weetabix to the producers of projects. This gave Robertson an understanding of the connection between big name supports and brands. By 2000, he and prime supporter Quentin Griffiths had set up the site AsSeenOnScreen – later abbreviated to Asos – with the underlying point of itemizing items utilized as a part of movies and TV. The firm started with 2.4m in start-up money – 1.1m from Robertson’s sibling Nick a web business visionary, who sold his Scoot professional resource firm for 30m out of 1998 (Scotsman.com, 2010).
2.2 HOW IT STARTED In 1999, two ordinary British men read a stat that when the programme Friends aired, NBC got 4,000 calls about a lamp placed in one of their apartments asking where it could be purchased (BOF, 2014). This gave them the bright idea of starting a fashion business which copied the trending styles and designs worn by popular celebrities. The mix of celebrity style and fast fashion was an instant hit, and neither Nick Robertson or partner Quentin Griffiths anticipated that. The name ASOS is an acronym for ‘As Seen On Screen’, although many customers of the brand are unaware of this fact. Initially known as ‘AsSeenOnScreen Limited’, the company soon shortened the name to ASOS in less than a year (Robinson, n.d.). One of their first hires was buyer Lorri Penn, whom they scouted from Arcadia – Sir Philip Green’s umbrella retail group, which includes Topshop and Dorothy Perkins. She believed deeply in the potential of focusing the business on fashion (rather than furniture and other goods). However, it wasn’t their first fashion buyer came in, that they were pushed in that direction. They soon realised that fashion was where they got the most returns for the business. Rather than saying ‘here’s a standard top’, they could say ‘here’s a top that Jennifer Aniston wore in Friends (Adams, 2017). The company acknowledged customer demand, and shifted As Seen On Screen from a website for odd celebrity-linked products to fast fashion. Soon building Asos’ relationship with “the global population of twentysomethings who love fashion” became one of the key pillars of Robertson’s strategy. “I employ a thousand twentysomethings in the building, who love their fashion, love their Internet, love their social media… all the energy is here. I’ve got the easiest strategy job in the world because I’m just delivering what they want” (BOF, 2014).
2.3 PROBLEMS FACED It hasn’t always been pure bliss for Robertson, especially when it comes to commerce. In spite of his advantageous family associations, there were periods within the early days of Asos when he battled to pay the bills. Launched in 2000, the site had the misfortune of going public in the wake of the collapse of the dotcom bubble. Robertson at that point drifted Asos on the Alternative Investment Market (Aim) in October 2001. Shares at the time were headed towards the bottom of the most exceedingly bad market for a generation, following the 11 September 2001 terrorist attacks within the US (Scotsman.com, 2010). Then as deals were picking up energy, more calamity struck: a blast at the Buncefield fuel terminal in Hertfordshire harmed Asos’s only distribution center, rendering millions of pounds worth of stock unsellable (Finch, 2008). The company’s shares were suspended from trading as Asos was forced to end operations for six weeks amid the vital Christmas period. But with offer assistance from Arcadia’s Green – who sent over Anthony Harris, one of the country’s best insurance loss adjusters, to negotiate on behalf of Asos – Robertson quickly got the business back up and running. Though undoubtedly he had terrible luck, Robertson has had a hand in making a few of his own hardships. He provoked shock within the industry in 2007 when he assaulted the operators who offer assistance to drive online sales for firms such as Asos. Pronouncing that Asos would end its existing affiliate marketing arrangements, he said there would be “no senseless commissions being paid to grubby little individuals in grubby small studios developing salary at our cost, getting within the way of genuine sales”. He has also at times scrutinized his supporters, in spite of the fact that it isn’t clear how this has influenced those working connections. In spite of the fact that he claims to “love” Topshop, he told one writer in December 2006 that the chain had made millions “at the cost of poor girls who want to look great. They’ve been tearing clients off for a long time. “We’re 20 to 25 percent cheaper for precisely the same product,” he included, still referring to the Topshop brand, owned by Green’s Arcadia group (Scotsman.com, 2010).
CAREER
1987 Young & Rubicam, mediia buyer 1991 Carat, media buyer 1996 Entertainment Marketing, founder 2000 -2015 Asos, chief executive
FAMILY
Divorced, two children
INTERESTS
Skiing, Fitness Cycling, Chelsea FC, and armchairsport
NET WORTH
£220 Million (2016) Source: www.theguardian.com/business/2008/apr/18/retail.internet
2.4 THE EXIT & DIVORCE Robertson, who has won several entrepreneurs of the year awards and was once described by a newspaper as one of the “greatest entrepreneurs” of the century, stepped down as Aso’s chief executive in September 2015 (Telegraph.co.uk, 2016). The reins were handed to Nick Beighton, the company’s long-time finance director, who was promoted to the chief operating officer only a year before. Mr. Robertson, however, still owned an 8.4% stake in the company that was worth more than £208m at the time. He stayed on the board as a non-executive director (Frizell, 2015). Even though the company declined to comment on the move, for many it did not come as a surprise as it came after a troubled period for the business (Goodley, 2015). After shares hit an all-time high of 7,050p in March 2014 the business had to announce three profit warnings in the course of six months. Then, a fire at its Barnsley warehouse in June destroyed £22m worth of stock and didn’t exactly help and by October its shares had slipped to 1,785, their lowest level since Spring 2012 (Torrance, 2015). Many familiar with the company applauded Robertson for stepping down from the business he created. Many entrepreneurs cling on as bosses even if they do not possess the skills to run established businesses. It was best for him and the business to move on (Goodley, 2015). Further, Robertson’s divorce settlement also affected the company. He met his former wife Janine in 2002 and got married in 2004. The couple who have two children together separated in 2013. In 2016 though he was forced to pay his ex-wife £70 million following a High Court divorce battle which was sparked when he moved in with his former PA Charlotte Balin (Awford, 2016). This forced Nick Robertson, who had stepped down as chief executive just a year before to sell 1.3m shares through a placing with institutional investors. The share disposal plan, revealed after the stock market had closed, would raise £46.4m based on the closing price of £35.71 (Wood, 2016).
DIVORCED RCED
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external environemnt Pestel Annalysis UK
70’S
POLITICAL Since 1973 been a part of the European Union Fluctuating political parties in government, Britain was dubbed “the sick man of Europe”- desperately difficult years for Britain, both politically and economically. Terrible industrial relations (29m days lost to strikes in 1979) London became a global, self-confident city, attracting expats from all over the world. 1979, Margaret Thatcher country’s first female prime minister. Second-wave feminism began to dominate Power cuts - doubling of oil prices in 1979 Terrorism in the 1970s – the IRA. The IRA was linked to over 40 bombings and a number of fatal incidents throughout the 1970s, culminating in the death of Lord Mountbatten in 1979. Unemployment, racial tensions, the “troubles” in Northern Ireland and a wave of strikes in the 1978 with civil rights riots breaking out across urban areas
ECONOMIC Inflation at almost 30% and a humiliating bailout from the IMF. The first recession since the war (1974–75) followed very vigorous growth in the opening years of the 1970s, and coincided with a large jump in oil prices, a sharp rise in inflation, and acceleration in wage growth. The 1.4 per cent fall of GDP in 1974 broke the run of uninterrupted growth, saw the weakest average GDP annual growth at 1.9%
SOCIAL In 1971, the male employment rate was 92.1% ,women stood at 56.2% Unemployment at a low point of 888,000 in 1973. 1970 average gross weekly earnings of men were £30.00 for an average week of 43.7 hours. Women received £16.30 for 37.6 hours It was a decade which saw people choosing to rebel (Punk culture) and break away from the gentle, domestic and materialistic way of life People found that they didn’t need to commit much of their day to housework and cooking, which meant that many women could take up jobs of their own. In 1971, British tourists took some four million holidays abroad - which then seemed an awful lot. But by 1973 that figure had jumped to nine million and by 1981 it was more than 13 million. From professional working women to long-haired footballers, from pornography in the corner shop, the cultural texture of British life The 1960’s baby boom, population growth slowed during the 1970s and the UK population actually fell between 1975 and 1978.
TECHNOLOGY Tech’s golden eras - first digital watch, Walkie-Talkies. first cellphone available for the public to buy., Walkman Most households were full of labour-saving devices (such as microwaves) One of the first computer games Computers in the office, 1970,One of the first handheld televisions, the MTV-1, is developed by Sir Clive Sinclair. Steptoe and Edwards successfully carried out a pioneering conception which resulted in the birth of the world’s first baby to be conceived by IVF, Louise Brown on 25 July 1978, in Oldham General Hospital, Greater Manchester, UK. 1979, One of the first laptop computers, the GRiD Compass, is designed by Bill Moggridge
ENVIRONMENT New political parties formed, such as the People Party (now known as the Green Party) who put sustainability and care for ecology at the heart of their manifesto. Another radical movement focussed on environmentalism, and aimed to gain entry into British politics as well as to educate the public away from consumerism. 1979, The tree shelter is invented by Graham Tuley to protect tree seedlings 1974-Scientists suggest for the first time that chlorofluorocarbons (CFCs) may be causing a thinning of the ozone layer.
LEGAL It was a decade of change: contraception became free of charge for women in 1974 and the Sex Discrimination Act in 1975 made it illegal for employers to discriminate based on gender in a number of industries. Three day working week was implemented in the early 1970s to conserve electricity due to industrial action from coal miners. 1971, women were banned from going into Wimpy Bars on their own, after midnight, on the grounds that the only women out on their own at that hour must be prostitutes. 1970 Equal Pay Act. although it did not come into full force until 1975. 1971 Industrial Relations Bill, designed to regulate trade union activity, 1975 Employment Protection Act, - outlawed dismissal on grounds of pregnancy and introduced maternity pay. 1976 Race Relations Act, intended to make racial discrimination and segregation illegal
THE POPULATION
80’S
POLITICAL A war was successfully fought with Argentina in 1982 Early 1980s, - change from Democrat to Republican administrations End of the Cold War. America was now the sole superpower. A period of radical change and of political giants - Thatcher, Reagan, De Klerk, Yeltsin, Gorbachev. Free Market Capitalism was adopted across the world. End of the class war. A decade of Thatcher meant women were treated as having equal potential as men. All issues of the 70s, such as race, feminism and gay rights, re-emerged - and those movements were very powerful. The end of the 1980s had some great events - the end of the Soviet era and the fall of the Berlin Wall Diminishing the power of the trade unions. The Royal Wedding/Princess Diana Racial tensions spark riots in Brixton and other areas Racial tensions spark riots in Brixton and other areas Major national industries are privatised
ECONOMIC Due to the severe recession, unemployment rose to 3 million and the high unemployment persisted throughout the 1980s. Highest levels of unemployment since the Great Depression and precipitated riots in many inner cities during the summer months of 1981. Black Monday came in 1987 The early 1980s’ recession saw the largest post-war fall in GDP of 2.1% in 1980. The 1980s saw the second highest rises in consumer prices in the pos war period, with the housing group experiencing the fastest growth in prices, reflecting in particular increased costs in mortgage interest payments and local taxation (for example, council tax). Employment levels fell by 1.2 per cent in both the 1980s and 1990s., fall in the % of jobs lost in the recession of 1980s, at 3.6% (985,000) Poor industrial relations and a relative economic decline. Six pence coin is withdrawn from circulation
SOCIAL UK population grew again (with the exception of 1982 when it fell by 0.12%, its biggest fall since 1951) Through the 1980s recession, total working hours fell by 5.3%, compared to the fall in employment of 2.4%. It was the decade of entrepreneurialism and possibility, where ordinary people could make something of themselves. Pop music was magnified to new extremes John Lennon is shot dead in New York - Dec 8 1980 Pop culture - stars led the trends. Boy George, Duran Duran and Princess Diana became icons People were out to have a good time in a way that didn’t infringe on responsibility. Cross-dressing was crucial and Leigh Bowery and Trojan,were must-haves at any club or party. Decade of advertising and branding. It was all about “designer” The rave scene began, freely circulating drug ecstasy. The Face magazine and iD were the style gods Aids crisis
TECHNOLOGY 1984, One of the world's first computer games to use 3D graphics, Elite, is developed by David Braben and Ian Bell. 1989- Sir Tim Berners-Lee writes a proposal for what became the World Wide Web. The following year, he specified HTML, the hypertext language, and HTTP, the protocol. New credit cards noisily swiped through those countertop machines Shiny compact discs Television became the most influential political medium for the first time. It came of age as a global force, and that was a huge change. Digital watches - usually made by Casio, and which sometimes doubled as calculators. Arcade/computer games - Pac-Man, Frogger, Donkey Kong, Pole Position.
ENVIRONMENT Acid rain was one of the defining environmental issues of the 1980s, causing acid deposition in streams and rivers, making them uninhabitable for many species.
LEGAL The 1980 Housing Act comes into effect, giving council house tenants of three years’ standing in England and Wales the right to buy their home from their local council at a discount Civil rights laws Coal Industry Act 1990 Employment Act 1989 Finance Act 1988 Industrial Development Act 1985 Supply of Goods and Services Act 1982 Oil and Gas (Enterprise) Act 1982 Industry Act 1980 Introduction of new local taxes sparks ‘poll tax’ riots in London Law prohibiting the promotion or teaching of homosexuality in schools
90’S
POLITICAL Hong Kong, was handed over to China in 1997 Reaches agreement with Spain to re-open its border with Gibraltar. Zimbabwe becomes independent of the United Kingdom Sterling’s exit from the European Exchange Rate mechanism in 1992 1990 - Margaret Thatcher looses to John Major who becomes prime minister. Helen Sharman. became the first British astronaut and the first woman to visit the Mir space station in 1991. Channel Tunnel opens, linking London and Paris by rail 1 May 1997 - Labour wins the general election, with Tony Blair as prime minister 31 August 1997 - Diana, Princess of Wales, dies in a car crash in Paris 31 March 1990, Introduction of new local taxes sparks ‘poll tax’ riots in London 1994-First women priests are ordained by the Church of England
ECONOMIC Price deflation and rising imports The increase in import penetration made it impossible for many large-scale UK manufacturers to survive, GDP fell by 2.5 per cent Apparel accounted for 10.3% of household spending in 1960. By 1975, this share was down to 8.7%, and to less than 6% by the end of the 1990s The late 1990s saw large discounting multiples develop, under-cutting prices in the mid-market (variety stores and fashion chains), and even designer brands were being heavily discounted by the end of the decade. The period from 1990 to 2005 has seen prices rise by an annual average of 2.8%, with inflation of less than 4% in each year except 1990 and 1991. Fall in the % of jobs lost in the recession of 1990s, at 3.7 per cent (1.1 million jobs) Going into the 1990s recession, nominal wage growth was around 10%, with inflation around 11% (including mortgage interest payments). Began with a severe recession, and a humiliating exit from the ERM, leading to higher unemployment.
SOCIAL Buying clothing by brand, rather than by store name, late 1990s. 1998 to 2000 - employment in UK manufacturing as a whole was declining Grunge and light-wash denim are back, Britpop and the Spice Girls defined the era. Nineties weren’t serious, there was a lot of irony (in the sense of liking something because “it’s so bad it’s good”). ’Clubbing’ lifestyle, combined with a sense of economic well-being - light clothing and footwear. In the late 1990s, ’dressing down’ for work. Interest in health, fitness and sport, allowed sports wear to dominate Wide ranges of ’style’ or ’lifestyle’ magazines available targeted at both men and women. The male employment rate reached its lowest point of 74.9 per cent during 1993 By the 1990s, only 1/7 was an active member of a Christian church, more claimed to be believers. A stable level of population growth The rise in net migration in 1998 can in part be attributed to instability in countries in Africa, Eastern Europe and the Middle East.
TECHNOLOGY The cheap imports and constant upgrades of the 1990s saw the British home experience a whirlwind of technological progress. It’s the decade of giant satellite dishes, brick-sized mobiles and ever-evolving computers. 1992 - first SMS message in the world is sent over the UK’s GSM network. The Game Boy. The PlayStation. The SEGA Mega Drive Personal CD players
ENVIRONMENT 1990 - heat wave in the United Kingdom
LEGAL By, 1997, the Bank of England were made independent, giving them control of setting interest rates. It was hoped, an independent Bank would not be vulnerable to the political cycle of creating a convenient economic boom before an election. Public Entertainments Licences (Drug Misuse) Act 1997 (repealed) National Health Service (Private Finance) Act 1997 Protection from Harassment Act 1997 Merchant Shipping and Maritime Security Act 1997 Energy Conservation Act 1996 Noise Act 1996 Community Care (Direct Payments) Act 1996 Disability Discrimination Act 1995 Finance Act 1994 Trade Union and Labour Relations (Consolidation) Act 1992 Ministerial and other Pensions and Salaries Act 1991 Education (Student Loans) Act 1990 (repealed 13.8.1998) Coal Industry Act 1990
THE INDUSTRY
THE INDUSTRY
BIRTHS & DEATH
2000
POLITICAL 2000 to 2005 the strongest growth in government consumption Britain celebrates the new millennium May Day riot in Central London by anti-capitalist protestors. The statue of Winston Churchill in Parliament Square, and the Cenotaph in Whitehall Were daubed with graffiti. 4 August – Queen Elizabeth The Queen Mother celebrates her hundredth birthday. 8 September – UK fuel protests: Protesters block the entrances to oil refineries in protest against high fuel prices. Panic buying by motorists, leads to nationwide petrol shortages, with between 75–90% of all UK petrol stations closing due to low supplies in the following week. May - UK forces intervene in Sierra Leone to protect and evacuate foreign citizens caught up in the civil war. They subsequently stay on to help train the government army.
ECONOMIC The export ratio of production reached its all-time peak in UK clothing in 2000, at 59% of the value of UK production. Consumers spent £34.15bn on clothing and footwear in 2000, representing their highest ever outlay on these products. However, the share of total consumer spending accounted for by clothing and footwear has continued to decline, reaching an all-time low of 5.8% in 2000. Spending in 2000 was slightly lower than in 1999, once inflation is taken into account. 3 May – The London Stock Exchange and Germany’s Deutsche Börse announce plans to amalgamate. March 2000 - Global stock markets tumble as the ‘dotcom bubble’ bursts The late 1990s saw a profusion of start-up companies selling products or services either using or related to the internet. There was a speculative frenzy of investment in these ‘dotcom’ companies, much of it by small investors. The bursting of the ‘dotcom bubble’ saw the collapse of many of these companies and marked the beginning of a mild yet lengthy recession.
SOCIAL The annual growth for the UK population more than doubled during the 2000s, from 0.34% in 2000 to 0.71% in 2009; the annual growth rate for the decade more than doubled as well, up from 0.28% in the 1990s to 0.64% in the 2000s. The sex ratio grew faster post2000, increasing by 1.9 men per 100 women in the 14 years between 2000 and 2014 The 1990s and 2000s have seen the lowest inflation of the post-war period, Black and Irish people are treated differentially at all stages of the criminal justice process, and were more likely to be imprisoned.
TECHNOLOGY The Nokia 3310 was the #1 selling cell phone in 2000 Bluetooth started being used in mobiles and computers Widespread popularity and social impact of Google Search, the word “google� came to be used as a verb.
ENVIRONMENT 23 September - Earthquake in Warwickshire. The UK is hit by one of the worst snow storms in the last 50 years bringing public transport to a halt The autumn of 2000 - September to November - was the wettest on record over England, Wales and Northern Ireland, as well as over the UK as a whole (in a series from 1914).
LEGAL Child Support, Pensions and Social Security Act 2000 Insolvency Act 2000 Warm Homes and Energy Conservation Act 2000 Freedom of Information Act 2000 Financial Services and Markets Act 2000 Section 27 of the Access to Justice Act 1999[15] comes into force allowing recovery of fees from the losing party in civil actions, extending the availability of conditional fee arrangements. New Labour’s Human Rights Act comes into force in October The ban on gay and bisexual people serving in the armed forces is lifted
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internal environemnt
4.1 DIRECR RIVALRY FROM DIRECT COMPETITORS
POSITIONING MAP
Good quality
Low degree of product innovation
High degree of product innovation
Bad quality
4.2 BARGIN POWER OF CUSTOMERS Within the retail industry generally, customers have high bargaining power, since the customers are more concerned with the product than the brand. Thus, the lowest price generally prevails making buyers a competitive threat. Conversely, when buyers are weak like in the case of ASOS, a company can raise its prices and declare higher profits. This allows ASOS to have a favorable relationship with buyers due to low buyer power in negotiating prices.
4.3 BARGIN POWER OF SUPPLIER ASOS gets products from various brands & designers. The power of these suppliers will only increase in correlation with the popularity of the products with customers. Also, ASOS has a number of independent designers who have a lot of power over the business if their designs are popular with ASOS’s customers. If they feel that ASOS is not paying them well enough then they could offer their designs to one of ASOS’s competitors. However, suppliers have little power due to the huge choice of suppliers available to ASOS.
4.4 ALTERNATIVE PRODUCTS For ASOS the design of products is key, they must be up to date with the latest fashion and trends. The risk of substitute products and services is moderate as ASOS incorporates differentiation with free shipping, quality, student offers, convenience, an excellent customer care service.
4.5 POTENTIAL NEW COMERS Asos will always be threatened by the fact that a new entrant can use the same concepts such as the website, products all can be mimicked at a low cost. However, over the years ASOS has built an extremely loyal and large customer base resulting in strong entry barriers making the risk of new entrants somewhat low.
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conclusion The late 90’s saw a trend in discounted prices. Despite the availability of clothing and footwear at very low prices, the UK consumer was slowly getting more and more attracted to designer labels. Looking for brands, they were more likely to visit stores which sell a range of famous brands rather than their own label exclusively. Founder Nick Robertson and Quentin Griffiths capped on these factors and started ASOS with a total of £2.4m in start-up capital and purchased a variety of celebrity-linked products to launch the business. Asos now stocks both its own fashion and beauty lines as well as other brands. Although the full extent of the comedown from the dot-com boom was yet to become apparent, launching an online business in the mid-2000s was a risky business. However, with its right formula, the business expertise and experience of its founders backed by some strategic PR, ASOS soon became a success story (Adams, 2017). Today, the enterprise is valued at $6.1 Billion as of May 2017 and was ranked number three in Forbes list of Innovative Growth Companies (Forbes.com, 2018). Robertson, always wanted Asos to be, “more than an online retailer, he wanted it to be as synonymous to fashion for twenty-somethings as Google is to search and Facebook it to social media (BOF, 2014). Between 2015 and 2016, 20% of the UK’s population ordered an item online from ASOS. Today. ASOS dominates the fashion e-commerce realm. Apart from Robertson’s to its customer-centric communications and a checkout it has been
excellent guidance and vision ASOS’s success can be credited business plan, by building customer trust via brand content and consumer shopping journey that is clear to navigate and easy to able to create a set of loyal customers globally (Graves, 2016).
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