Buying denim for ASOS (c) Copy Right Christina Thordal Andreasen

Buying denim for

FASHION BUYING PROJECT (INDIVIDUAL) 20% CHRISTINA THORDAL ANDREASEN BA FASHION MARKETING & COMMUNICATION LEVEL 5, 2017-2018 5FAMK004C MARKETING TECHNIQUES & STRATEGY 2 CWK3 ESSI KORHONEN WORDS: 2.851

INTRODUCTION & METHODOLOGY...............................................................p.4 1. RESEARCH .......................................................................................................p.6 1.1. INTERNAL ANALYSIS...........................................................................................................p.8 1.2 EXTERNAL ANALYSIS..........................................................................................................P.14

2. TREND FORECAST.........................................................................................p.18 3. OBJECTIVE & SOLUTIONS...........................................................................p.24 4. PROPOSAL ......................................................................................................p.26 4.1 STORE LOCATION..............................................................................................................P.28 4.2 SPACE MANAGEMENT, LAYOUT & VISUAL MERCHANDISING......................................P.30 4.3 MARKETING STARTEGY....................................................................................................P.34 4.4 CATEGORY MANAGEMENT................................................................................................P.36

5. BUYING PLAN .................................................................................................p.38 5.1 ASSORTMENT PLAN...........................................................................................................P.42 5.2 BUDGET...............................................................................................................................P.44

BIBLIOGRPHY....................................................................................................p.46 ANNEX..................................................................................................................p.53 INTERNAL ANALYSIS..........................................................................................................p.53 TIMELINE................................................................................................................................p.53 BUSINESS MODEL..................................................................................................................p.53 MARKETING MIX.....................................................................................................................p.54 TARGET & SEGMENTATION..................................................................................................p.64 PERSONA.................................................................................................................................p.71 COMPETITORS........................................................................................................................p.72 SWOT (STRENGHTS & WEAKNESSES).................................................................................p.76

1.2 EXTERNAL ANALYSIS....................................................................................p.77 PEST ANALYSIS.......................................................................................................................p.77 COMMERCIAL AREAS IN BARCELONA & RETAIL RENTAL RATES....................................p.83 COMMERCIAL MIX OF MAIN STREETS IN BARCELONA.....................................................p.90 EXPANSION STRATEGIES......................................................................................................p.92 SWOT (OPPORTUNITIES & THREATS).................................................................................p.95

INTRODUCTION & METHODOLOGY In a trend-led era, where consumption is driven by distribution efficiency, a new trend has occurred of customers investing in more quality products through considered purchases rather than a further “disposable” buy-now, wear-now mentality.

Despite economic uncertainty (Annex, Exhibit 9, PEST

With reference to the two previous strategic marketing reports, giving emphasis to the current and future state of e-commerce as a distribution method along with proposing a retail strategy matching identified market trends to maintain the success of the format, this paper seeks to pro-pose a trend-led buying plan for a similar pop-up store concept, as suggested in the previous report. The store is located in Barcelona, Spain, in order to increase brand visibility within the highly competitive Spanish retail environment.

Initially, this paper holds a thorough research with similar analysis’ of internal and external brand and market structures for respectively ASOS and the Catalonian Capital, Barcelona, as the two previous reports. The research is based on an extensive gathering of qualitative and quantitative materials along with a description of the chosen location and format selected to open the store. Secondly, the research is accustomed by trend-forecasts to propose ASOS with a suitable six months buying plan for the selected store format adopting to the Spanish retail environment and economic state. Additionally, the proposal includes a detailed assortment plan that seeks to iden-tify the coherence between the brand identity and product buy, with a long-term view for devel-opment, expansion and up-scaling. Finally, the proposal viability is evaluated through a financial plan and calculation of Return of Investment (ROI) to assess the profitability of the proposed buying plan.

analysis) in which consumers tend to buy lower quality and inexpensive products, it appears that consumers appreciate the fact of brands or retailers offering higher quality and staple investment pieces to mix and match with a few statement items, highly defy of seasons. Additionally, the latest John Lewis retail report addresses the trend as centered on making a person-al statement “about the wearer, rather than feeling like a fashion fad” (Authors of John Lewis, 2017). For the British fast-fashion multiband and pure e-commerce giant, ASOS, this trend carries the potential to both disrupt and serve its current business structures, which highly relies on a fast-fashion business model. Additionally, pure online retailers such as ASOS, are by 2018 facing challenges of adopting a physical element to their distribution method to engage a concept of social-fashion a by Omni-channel or model O2O2O retail approach bridging online and of offline buying experiences in order to meet current consumer shifts and global economic, technological and industry changes (Re-Meter Website Editors, 2017).

For these macro trends to serve ASOS, the pure e-commerce retailer must adapt to existing and future sociocultural, political, economic and technological changes, and therefore might consider introducing a more conscious selection of environmentally debated, yet classic product categories, such as denim, into their buying plan along with investments in offline marketing actions to in-crease its market visibility on these initiatives.

4

as

1 6

RESEARCH Based

bution methods as ASOS’ pure e-commerce, to extend or convert the business model and behavior to omni-channel or O2O2O model premises, bridging online and offline buying experiences in order to meet these changes in consumption. Additionally, the research found a more conscious consumption behavior, both in terms of an increasingly enlightened environmentally and ethically consumer mentality, but furthermore, in terms of body-type embracement and self-love (Velasquez, A., 2017), both are currently embraced by ASOS gradually (Annex, Exhibit 3, Marketing Mix). Research moreover found an undeniable importance of denim in both a global trend outlook as well as in the current millennial consumption behavior, additionally reflected within the ASOS portfolio.

Thorough analysis and evaluation of internal and external factors have additionally stressed a conformity between brand and target behavior both locally and globally. This common denominator for both parties gives emphasis to a fast pace lifestyle- and market-orientation along with a high level of customer-centric metrics (Annex, Exhibit 5 Segmentation, 6 Persona, 2 Business model, 3 Marketing Mix & 12 Expansion strategies).

upon an extensive gathering of qualitative and quantitative material in analyzing internal and external brand and market structures of ASOS, the research has found significant opportunities for the British-founded e-commerce retailer and fast-fashion giant, to explore millennial-driven markets such as Barcelona, during popular seasons with high pedestrian flows, in main commercial areas. Therefore, this proposal suggests an opening of a pop-up concept store in the market of interest, Barcelona, with a duration period of four months stretching from June to Sep-tember (Annex, Exhibit 13, SWOT, Opportunities & Threats). Additionally, the research has found an opportunity for ASOS to introduce a more conscious selection of the environmentally debated, yet classic product category, denim, into their buying plan along with investments in offline marketing actions to increase its market visibility on this initiative.

This initiative, comes in line with research findings of macro trends changing the consumption normality, and driving both consumers and retailers into changing or rethinking the shopping ex-perience (Annex, Exhibit 9, PEST Analysis & Table 1 p. 14-15). This causes distri-

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1.1

TH F

INTERNAL ANALYSIS

Following part of the report treats of

an analysis of the internal brand structures of the British–founded online fast-fashion retailer, ASOS, in order to identify the current brand strengths and weaknesses as groundwork for the proposal and evaluation of the viability of ASOS opening a pop-up store in Barcelona along with introducing a renewed product category of conscious denim to its product portfolio.

All internal analysis is gathered in the annex, and here summed by the persona tool exemplifying the target audience of the following proposal along with a perspective on the competitve environment and finally a SWOT analysis giving emphasis to internal brand strenghts and weaknesses.

NEEDS

OUTLINE 21 years old Studying visual communication in the second semester and working as sales assistants in popular and specialized concept store.

Fast, convenient and relatively cheap ducts and services to match her fast-p lifestyle. Moreover, she finds sociali outside from work and university wit mily and friends a need in her daily li get away from the stress and daily rou Her health and wellbeing is addition an important factor, along with the ab to express herself creatively and feel sionate about a certain subject.

Born in Madrid, but moved to Barcelona for studies.

Highly interested in fashion, which is reflected in her social media accounts.

Her Instagram profile has gained enough follow, so she has established a blog as well.

Spend a lot of time on digital media in her daily life and routine Grew up in middle income family, who provided her with a world full of opportunities.

In a relationship.

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CONCERNS

She is very concerned about moneta ry issues as her budget is limited b living away from her parents. for tha reason she highly values discounts but also want’s her products to las beyond a single season.

She is concerned about the balanc between followers and following (how many she follow herself) as is create an exclusivity around her profile.

HE CONSCIOUS FASHIONISTA

p propaced izing th faife to utine. nally bility l pas-

aby at s, st

ce w es

FRUSTATIONS

She is frustrated about the current social order of the world generated by stereotypes, as for why this topic has become highly important for her.

Another frustation exist in the lack of brand adopting to other body types than the one from the commercials.

Slow internet and digital devices make her jump off the media and quickly or turn to an alternative.

She is often challenged by the limitless possibilities that constantly are offered in terms of just about everything, which makes it difficult to decide on her future career and life choices.

POSITIVE TRENDS She is a supporter of the current social trends concerning world peace, empowerment of gender fluidity, diversity, homosexuality, gender roles, cultural differences and body embracement. She would happily join protests, yet she would be background supporter and not as an extreme activist. She highly values good and well done online content that appeal to her interests and lifestyle.

BEHAVIOUR

She highly operates according to openness, politeness and hard work as it gets you the furthest in today’s society. She loves getting recommendations and information from friends if it is not personalized from brands. Online she typically browses through online platforms by use of sales categories or a selected price range in order to manage her limited budget. Online, she follows brands she likes that is both within her reach in terms of price and style, yet she also follows aspirational brands (read luxury). She additionally follow brands to gain promotional offers and discounts. She often turns to sites like ASOS as it independent of time, day and hour provide same service, product, and experience, but she has no problem with changing brand if other offers are better.

HOPES

She hopes for a more socially concerned world structure in terms of a more environmental and social conscious approach to life.

Moreover she hopes to figure out if her career choice is the one fitting her the best and in the future to have more finanical flexibility to loose some of her daily concerns and to be able to travel more.

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Brand Positioning Map showing ASOS’s positioning within the global mainplayers in Fast-fashion (emphasis is given to online commcerce).

HIGH PRICE

STRONG DIGITAL IDENTITY

WEAK DIGITAL IDENTITY

LOW PRICE

Brand Positioning Map showing ASOS’s positioning within the global mainplayers in Fast-fashion (emphasis is given to adopting to consumption trends (Tabel 1) and the relations ship with price)

HIGH PRICE

STORNG ADAPTION TO CURRENT SOCIAL CONSUMPTION TRENDS

WEAK ADAPTION TO CURRENT SOCIAL CONSUMPTION TRENDS

LOW PRICE

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11

SW

STRENGHTS

The low price setting fits the price sensitive target audience and is highly advantagous in competing with the surronding competitors.

However, consumption trends show that especially Generation Z are willing to invest in more Adapts to the requirements staple pieces. of the millennial and GeneThe target ration Z audience in targeting is highly present (both locals the individual by product filters, and tourists) in Barcelona for ranges, A-list, Marketplace and ASOS to open a offline store. shopping through favourite ASOS influencer.

As operational structures are gathered in a vertical business integration for ASOS private label, the compnay can easilier re-organise distibution structures to more CRS orientated solutions.

A more conscious social behaviour and consumption pattern for the target audience, allows ASOS to elevate its current recycleddenim initiative.

The broad product assortment cater for a shopping experience with lifestyleorientation that highly connects with the millennial consumer. It allows for a more direct customer connection and creation of brand relationship that goes further that the online platform.

1. See previous reports (CWK1 & CWK2) on the distribution method e-commerce and retail management.

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WOT

WEAKNESSES

Lack of offline stores results in weakened possibility to meet target requirements,social and industry trends of omni-channel consumption 1 �Want it all want it now� concept - Increasing consumer expectations for fastness, flawlessness, convenience and low price points.

As ASOS cater for a very wide audience for both women and men in various sizes and hights, the company is in danger of losing focus on their main or original customer.

80% of millennials are influenced The vertial and all by price and ASOS is not the cheencompassing in-house apest of all competitors. Discounts integration that ASOS operates under, results in are additionally of high the company, becoming value to the millennial target often causing a high rather repetitive in its disloyalty-rate product portfolio and Lack of communicative actimarketing approach. ons on existing recycled/sustainable initiatives, as well as, no paid advertising in publications that appeal to its target market.

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Table 1: Current state of consumption GLOBAL ECONOMY

DISRUPTIONS

- Continued moderate economic growth - Growing market optimism of fashion sales - Economic growth shift from West towards East and South

FASH

- Interconnectivity and seamless move towards omnichannel shop- - Online platforms amon ping experience.

- Direct to consumer com - Localising in global markets - Online platforms are of - Increasing consumer expectations of all brand offerings (conve- ed to grow in both scales nience, quality, values orientation, newness, and price) brands to participate wit

- East and Southern market domination - Changing distribution formats and channels marks the evolution - Growing significance of within global online retail sales, posses- of the retail sector. throughout the shopping sion of e-commerce unicorn’s, innovation, - Continuous need for brick-and-mortar and human interaction, - Decline in Brick-and-m global scale investments and expansion. despite decline in brick & mortar traffic - This online evolution w - Online platforms as the first point of search, while lost interest in brand actions towards h - Current political landscape will have shopping centers/malls lasting effects on globalisation beyond 2019, as many consumers and countries - Adoption of collaborati might turn to a concept of deglobalisation - Consumer desire for user-led design- and experience processes of folio and to assist brand personalization and mass-customization and give focus to domestic growth and increasingly local benefits.

- Online platforms are de - Increasing social media influence strength to own positioni

- This political situation will assumingly push countries to find common ground and new allies in new markets

Economical uncertainty

1.

TRENDS

CONSUMER SHIFTS

- Values and social and environmentally consciousness has come to matter and gained an increasing importance in the current consumption behaviour.

Emerging East- Increasing social Personalisation and Southern media influence powers

2.

One of the top An economic growth challenges for the shift from Western fashion retail industry mature markets to is found in global emerging East- and economic volatility, Southern regions uncertainty, and shifts have become sigin power. Geopolitical nificant hotbeds for turbulence moreover, industry growth. For represents an unpre- that reason brands dictable component with mature markets to the economic at the core, are forced uncertainty. For the to pursue new soluindustry, this means tions and “pockets of that brands must growth� in emerging invest in flexible and trading markets to innovative solutions stall declining salesto easily adapt to and profit outlook. constantly changing circumstances. Nevertheless, attention will foremost be given to re-focus internal strengths.

3.

4.

Increasing customer expectations

5.

- Increasing importance O2O2O premisises to the

m-commerce integration

6.

o

A trend that has highly The rapid growth of Due to increasing Growing significance O affected online distri- online trading has market competition and of m-commerce and pe bution, is the adoption evoked a consumer constant developments digital integration am of real integration of desire for online within product, service, throughout the shop- ke social media in buying retailers to integrate and technology, ping experience. re processes. It comes in personalized services consumer expectaDistribution giants are ly line with the increasing prior to manufacture. tions have increased entering fully into mo- en importance of m-com- Based on existing drastically. For that bile distribution with th merce and has provided technology these reason expectations online/social mediums to consumers with more user-led design- and of total fulfillment of as they provide a new as control, information complete experience all brand offerings opportunity for brand se and power over the processes, increasingly such as convenience, engagement and serve an market process. The takes place online, but quality, values orien- as lead generation for m great impact of social offline retailers have tation, newness, price, brick & mortar store on media interactions and additionally begun functionality, and im- traffic. The mobile ex commitments between adopting the consumer mediacy at all time has devices unravel con- m brands and consumers desire. This initiative become normality. sumer opportunities for pa have globally affected is represented by the discovery and conve- or purchasing decisions of model of mass-customnient engagement with om consumers. ization and successfully product and content in an pairs with the rise of physical locations. ne m-commerce.

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HION SYSTEM

ng the top three market trends of 2018

mmunications

TECHNOLOGY

- Increased adoption of innovative and disruptive technologies

- Growing digitalization in both online and ften the first point of search and are expect- offline retail environment s and reach attracting even more fashion - Digitalisation across value chains with th these new distribution channels. refined cost structure. f m-commerce and digital integration - Consumer data and insight-based business g experience models pushing distribution efficiency. mortar traffic - Rapid expansion of online platforms is expected to develop into the premium and within the retail sector causes immediate how to collaborate with large online players luxury market

ions and partnerships to offer extended port- - Internet of things (IoT) provides fashion retailers with opportunities to gain new and expansion into new segments or markets. thorough customer insights. eveloping own private fashion labels to give ing within the fashion sphere.

retailers adopting omni-channel or model eir distribution.

Importance of online platforms

Global interconnectedness

New Business models

7.

8.

9.

Adoption of disruptive technologies

10.

Online platforms are ex- To match today’s New business models The industry is accelerating its adoption of inare appearing as the ected to be positioned global, millenniindustry increasingly novative and disruptive mong the top three mar- al-driven consumer experience decline in technologies such as AI et trends of 2018, as the profile, fashion etail method increasing- brands tend to give fo- brick & mortar traffic (Artifical Intelligence), y dominates the retail cus to global product/ and therefore calls for m-commerce, virtual nvironment and proves brand management in digital reinventions of reality and Big data, allowing the fashion offline retail spaces. he consumer shift order become more These models are partly industry a comprehenowards online retailers uniform by standardpushed by increasing sive and significant s the first point of social media influence, data-flow on consumearch rather and brick- izing operational why the focus is given ers. The technologies nd-mortar. Despite the metrics. market position of given This penetrating glo- to quick-response meth- moreover help to mark nline platform they are balization pushes an ods and supply-chain or renewing customer xpected to attract even opponent of localiza- optimization. The new touch points throughmore collaborations and tion and forces global online business models out the shopping artnerships with brands retailers to strike the moreover turn to devel- experience and hereby r events to help an right balance of seiz- oping into premium and to differentiate within mnichannel experience ing the local benefits luxury market with data the market by pushing nd their expansion into while guarding brand and customer-insights distribution efficiency. ew segments. integrity and econo- at core.

mies of scale.

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1.2 EXTERNAL ANALYSIS

In order to give emphasis to the cur-

rent state of consumption, a PEST analysis is conducted examining the current political, economic, socio-cultural and technological factors influencing the existing retail environment.

The analysis has been converted into the following table (Tabel 1) stressing the current shifts in the global economy, consumption behaviour, the fashion system and technological changes along with identifying ten current trends for the general state of consumption. A SWOT analysis is additionally established for the external analysis to give prominence to the opportunities and threats for ASOS to open a pop-up store in the Spanish retail environment and introduce a new denim assortment to its product portfolio.

All external analysis is gathered in the annex.

SW

OPPORTUNITIES

In line with ASOS focusing its expansion strategies in core markets (UK, US and EU), the company has a possibility to explore millennial-driven markets such as Barcelona, during popular seasons with high pedestrian flows.

More conscious social behaviour and consumption Improve market pattern allows ASOS for contivisibility and awareness nuous expansion of ASOS priamong competitors through vate-label by introducing new sty advertising in publications or blogs les and sizes to the recycled denim that appeal to the target audience or initiative to establish improved by investing in further sponsor- and brand-feel. offline events and collaborations.

Increase marketing investment in creating awareness on the CRS initiative (recycled denim). This might be done by opening a pop-up store in markets of interest.

Gradual adoption of omni-channel or model O2O2O1 approach to distribution, in order to meet the existing consumer trends.

Increase customer use of m-commerce solutions to push ASOS as more convenient and by-hand of all times. This might be done through a customer reward-orientated sales strategy (ASOS A-LIST) in order to drive further customer conversions.

1. See previous report (CWK1) on the distribution method e-commerce

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WOT

ym

n

THREATS

Economic uncertainty, yet this can be turned into a possibility by offering free shipping, returns and lower product price points.

Competition threat from additional large retailers existing in both digital and physical form as they gain costumers through both channels. For the same reason, ASOS lack a high level of impulse purchase possibilities.

Due to increasing competition from a high level of pure e-commerce platforms entering the market, ASOS must continue to differentiate their products and services on ASOS.com

n

Lack of in-store- and omni-channel experience.

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TREND FORECAST SS19 As previously mentioned, values have come to matter for the current state of consumption, and additionally, this consumer shift will influence brands and products to adapt accordingly.

SS19 marks a season with a new perspective. This sea-

This season features a more subtle bleaching than previous seasons and adds a more imaginative touch to the product and additionally producing interesting solutions in terms of quality and price (Guyot, O., 2017). The colour scheme is more transversal and features a special game of attrac-tion between artificials and naturals, seductive magnetisms, amazing hybrids and fertile experi-ments.

Unavoidable for any buyer this season, is denim sets, both in classic denim colours and in a more exotic colour scheme (Kurazawa, D., 2017). An SS19 trend that comes in highly beneficial for retailers to offer product customization, is the evoked desire for patches and patchwork on denim.

son stress that denim is moving away from the perception of being raw, dirty, rough or rustic, yet neat, casual, nonchalant without being vintage or distressed and worn decidedly more lose on the body and initiates the end of the skinny-jean area (Authors of Denim Premiere Vision, 2017).

The main themes of Denim PV Spring Summer 19 are therefore featuring a new perspective on sensuality with more sheer fabrics mixed with superior comfort and movement (Authors of Denim Premiere Vision, 2017). These themes successfully match the sociocultural trends existing in the current state of consumption, as they relate to the existing consumer shifts of gender and body empowerment. A key influence of the season exists in colours being ubiquitous and additionally marks a season of exploration also as a reference to the social break with old-fashioned and obsolete stereotypes.

2

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FUTURISTIC EXPLORATION

UBIQUITOUS

COLOURS

SOFT MOVEMENT

SUPERIOR

COMFORT

NEW INTIMACY

soft

SENSUALITY

WORKING PACTHES

DENIM

CUSTOMISATION

KEY STYLES FOR SS19

Kurazawa, D., 2017, Design Development S/S 19: Women’s Denim

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3 24

OBJECTIVE & SOLUTIONS 1. Further adaption of ASOS private-label product offering to current social and consumption trends.

1

Continue expansion of the conscious recycled denim initiative by introducing new styles and sizes to the private-label of ASOS to establish improved

2

Increase marketing investment in creating awareness on the CRS initiative (recycled den-im). This might be done by opening a pop-up store in markets of interest.

4

Gradual adoption of omni-channel or model O2O2O approach to the ASOS distribution, in order to meet the existing consumer trends.

5

Increase customer use of m-commerce solutions (Only digital POS – popup used for show-rooming concept.)

3

Introduce the possibility for customisation (Patches on denim, according to the trend fore-cast)

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4

PROPOSAL As research found a possibility for ASOS to explore mil-

com, 2017), comes in line with the denim category gaining a market position within the fashion industry, as a Classic rather than a fashion fad. The products are therefore increasingly defying of seasons and blends successfully with various product categories. Additionally, the den-im collection is chosen as the current state of consumption is experiencing a more conscious con-sumption pattern of an increasing consumer willingness to invest in further staple, quality and CRS-orientated pieces as well as embracing social recognition and awareness on sizing (Annex, Exhibit 9, PEST Analysis). For that reason, the following buying plan will align the online consum-er-addressed ranges (ASOS, Curve & Plus Size, Tall and Petite) (Annex, Exhibit 3, Marketing Mix), with the proposed SS19 buy for the pop-up store.

For the proposed buy, research additionally found that the creative push for the denim season SS19, partly is driven by brands, yet the heaviest influence exists in the target’s (Millennials and Generation Z) stance on political and social matters. Additionally, the season experiences an in-fluence from both ends of the market as well as a high level of brand partnerships and collaborations (Velasquez, A., 2017).

lennial-driven markets during popular sea-sons with high pedestrian flows, following report proposes an investment in offline marketing purposes by an opening of an ASOS pop-up store located in the Catalonian capital and second largest city of Spain, Barcelona, to which a new conscious denim collection is launch with a duration period of four months. The operating months include June, July, August, and September, as they represent a high visitation rate and footfall, due to Barcelona as a highly popular vacation destination in Europe. The millennial target audience is additionally increasingly present during this period (Annex, Exhibit 5 Segmentation & Exhibit 10, Data analysis of main commercial areas in Barcelona).

The pop-up store will exist as a showrooming concept and therefore have no offline point of sale, as purchases will be made digitally and through the ASOS app. Customers do therefore neither leave with the products in hand, yet purchases will be sent to them as regular online purchases from ASOS.com Focus will be given to a female audience within the millennial target group as stated in through the segmentation process (Annex, Exhibit 4, Target, 5 Segmentation) The choice of introducing an expansion of the current ASOS initiative of recycled denim1 (Editors of ASOS.

1 ASOS introduced in September 2017 a recycled denim collection

26

including jeans and jackets varying from slim fit to mom fit. Currently there is 20 recycled styles available online for women.

Current ASOS initiative of recycled denim. (Editors of ASOS.com, 2017)

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Figure 1: Location for the proposed retail format at Placa Catalunya.

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4.1 PROPOSAL:

STORE LOCATION The selected retail format, exists as an offline pop-up and showrooming concept, despite a strong standing against offline distribution from leaders of ASOS (Annex, Exhibit 3 Marketing Mix, Distribution). Nevertheless, this proposal seeks to temporarily merge the current operational structures of ASOS with current consumer shifts and revolutionized state of consumption. Therefore, this proposal suggests an offline market-orientated initiative with digital point of sales in order to encourage omni-channel and model O2O2O distribution premises. Additionally, this retail format functions in compliance with the brand expansion strategies that states to give increasingly emphasis to core markets (UK, EU, US) (Annex, Exhibit 12 Expansion Strategies), which moreover allows the British online retailer to expand customer- and brand reach along with increased brand awareness in markets of interest.

The proposal is considered viable as the research furthermore found a significant market presence of the millennial target audience in Barcelona, accounting for 22,9% of the total local population and 20 % of the total tourist flows (Annex, Exhibit 5 Segmentation).

The retail format will be located at the centre of Barcelona’s commercial area, Placa Catalunya, with reference to the Samsung pop-up store (Figure 1). The placa functions as a meeting point for both locals and tourists as it connects both ends of the city and has a high and constant pedestrian flow, especially approaching from the mass-market and high-end walk of preference, Passeig de Gracia. The traffic is mainly due to the placa as a point of collision for the main commercial streets and as the placa houses various types of transportation, food & beverage and retailers. (Annex, Exhibit 10, Data analysis of main commercial areas in Barcelona & retail rental rates). These factors make the placa one of the busiest areas of Barcelona and for the same reason, Placa Catalunya is one of the first points of arrival or departure for many tourists as it is directly connected to airport routes. The retail format is located directly among several competitors, al-ready established at the placa or at adjacent commercial streets.

Yet the ASOS pop-up concept holds a competitive advantage of providing customers with an element of surprise and newness. Rental rates at given location are ranked among the five most expensive retail spaces in Barcelo-na, yet as a large size corporation, ASOS has the financial flexibility to rent the proposed retail space. (Andreasen, C.T., 2018, p. 6) Further financial explanation and reporting will be clarified in the final budget.

Following description of the exact retail location for the pop-up proposal is reused from the previous strategic marketing report on retail management proposing a retail strategy for ASOS to open a pop-up store in Barcelona.

(Retail management distribution report, p.6)

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Figure 2: Retail format planogram

FOLDINGS TABLE

FITTING ROOMS RACKS

SHELVES

M AN

N

EQ U

IN

S

BACK WINDOW

SOFA

’CASHIER’ & SERVICE STATION

MUSIC WALL

SIDE WINDOW

REFRESHMENT TABLE

FOLDINGS

SIDE WINDOW

IMPULSE

RACK & SHELFS

CHAIR

ROUND RACKS

M S

IN

U EQ

N

AN SHELVES

MANNEQUIN EXIT

ENTRANCE

FRONT30 WINDOW

RACKS

SIDE WINDOW

RACK & SHELFS

’CASHIER’ & SERVICE STATION

4.2 PROPOSAL:

SPACE MANAGEMENT & LAYOUT The retail space for the pop-up store will be constructed by a rectangular layout, as found suitable for an experience-orientated showrooming concept through AdHoc research with reference to the Samsung pop-up store for the launch of Samsung Pay during Mobile World Congress of 2018 (Authors of Samsung Newsroom, 2018).

This format and layout cater for an open retail environ-

ment giving emphasis to clear service and product visibility along with cross-merchandising to push for a further lifestyle-orientated ap-proach. As the proposal follows a showrooming concept, the introduced denim collection will be cross-merchandising among the different product categories (tops, bottoms, shoes and accessories) (See following category management and final buying plan overview on proposed collection products), and displayed through shelving, racks and folding in order to encourage impulse purchases.

For similar reasons, the floor plan is mixed, yet with a straight structure preference, to provide the store with a clean organization as well as easy store and product overview. By adopting this type of floor structure, ASOS is able to draw attention to the special-focus areas of highly experience-orientated marketing actions, such as the implementation of a Music Wall in collaboration with Spotify (See following list of proposed marketing actions p.

34). The straight floor structure additionally helps to guide the consumer through the entire store, increasing the store circulation, points of interaction and therefore the number of hot-zones (Figure 2, planogram). To assist the consumer in purchasing products through the digital point of sale by the ASOS app, round floor fixtures are located in

the store functioning as cashier and service station. Fitting rooms are additionally implemented in the store in order to create a possibility for the consumers to try on the products before purchasing, as this has been an increasingly crucial and permanently issue for the pure e-commerce retailer.

The retail space exists on relatively limited space, respectively 150 square meters, therefore the store will naturally have a maximum capacity of visitors using the facilities at the same time to regulate the people flow in-store and in order to create the proper retail experience for each consumer visiting the pop-up store. Assumingly, and as experienced through AdHoc research, this regulation will drive a level of exclusivity and excitement to the store, as consumers are asked to line up in front of the entrance to enter the store accordingly. However, limitations might be found in consumers unwillingness to lengthen the shopping pace by waiting in line, yet these inconveniences are often easily compensated for by visitor rewards in-store (See following list of proposed marketing actions 34).

Figure 2 (planogram) of the proposed retail format is reused from the previous strategic market-ing report on retail management proposing a retail strategy for ASOS to open a pop-up store in Barcelona. (Andreasen, C.T., 2018,p.9)

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4.2 CONTINUED

VISUAL MERCHANDISING

For

visual merchandising purposes the proposal suggests and collaboration with the British denim artist Ian Berry, who in 2018 created the denim artwork ‘the secret garden’ at children’s museum of the arts (CMA). The artwork is made from hand-cut denim pieces of the final spool of the cone mill’s white oak plant that was shut down in 2017, after 100 plus years of manufacturing (Cowan, K., 2018). The artwork, establish a monochromatic wonderland in the scenes of both urban life and nature, where visitors walk beneath floral fabrics and among cactuses, flowers and small palm trees: a denim on denim world, ‘a secret garden’. For the proposal, the denim featured in the in-store artwork will be of recycled denim. This visual merchandising collaboration seeks to create an experience-orientated interior and exterior store layout matching the collection buy and social trends

© Photography by Lucinda Grange (Cowan, K., 2018)

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Figure 3: Selection of the most important marketing actions for the launch of the retail space.

PRE STORE OPENING Spotify ads, paid advertising in Spotify temporarily sustainable foot traffic throughout the duration perunning a month before launch. riod. Sites considered useful for this: Facebook, Instagram and Twitter. These sites will feature preAmplify brand reach on social media, create a views and short teasers of the limited product of#hashtag for the opening event fering, pop-up store and event using the #hashtag to establish a community space around the events Product portfolio public to see one week before and following opening. Stay up to date with social launch, the collection is available to see online a audiences by updates, reminders, countdowns and week before store opening in order to generate a exiting content. high level of social conversation rates.

Installation of in-store sensors, adoption of in-stoHype creation before the event, Before the event, re sensors will measure the foot-traffic and consuthe proposal suggests a creation of several social- mer interest during the four months of opening and media sites for the events to build anticipation and compare it to actual actions of brand engagement. hype before the opening. A growing social audience is a key factor in creating a successful launch and

DURING STORE OPENING Partnersihp with Samsung, due to the great mobi- Playlist co-creation activity by Spotify, visitors are able to curate and co-create playlists in-store. le and m-commerce focus.

Partnership with British artist Ian Berry, for vi- Visitor refreshments, logo water with herbs, citrus sual merchandising purposes and experience orien- or berries will be offered to the visitors during visit, by use of the ASOS app, also used to solve waittation. ing inconveniences and to educate the consumer in Efforts put into in social channels, during the even using the ASOS m-commerce. contents will be running on Instagram and Twitter encouraging participants to engage with ASOS by Dnim customisation, patches are included in the visharing snap shots of their favourite product, the sual merchandising and customers are able to custostore or a selfie wearing the products under the mise their denim product when placing a purchase. #hashtag.

Digital POS, The digital POS through m-commerce Influencer marketing, will additionally take up in- is chosen for this pro-posal in order to keep a digital vestment, both in terms of payment and by provi- mindset connected to ASOS. ding them with the products of interest.

POST STORE OPENING Continue for extensive use of social channels, comment individually on customers shared images from the event

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PROPOSAL:

MARKETING STRATEGY

4.3

Following promotion and sale strategy for

the proposed retail format is reused from the previous strategic marketing report on retail management proposing a retail strategy for ASOS to open a pop-up store in Barcelona.

(Retail management & Distribution report, p.13)

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Due to the duration period of four months, the proposal does not suggest any discounts or sales of the product portfolio, despite when customers turn in a denim item to recycle (10% is given in discount for the item turned in). If the sell-through is considered low after four months of opening, a short sales period will be launched in order to eliminate the extensive stock level. The clothes included in the product portfolio are available exclusively to purchase through the ASOS mobile app in the pop-up store, in order to push ASOS customers to increase use of m-commerce further than what already accounts for 69% of all traffic generated (Annex, Exhibit 3, Marketing Mix).

The store will furthermore be open on Sundays the whole duration period, providing ASOS with a com-petitive advantage of intensifying the visibility and engagement on days, where many large-scale competitors are closing for the weekend. These marketing and communication actions account for 3,4% (â‚Ź 180K) of the total Gross Sales â‚Ź4.179.588,92 as for 2017 (See Operative expenses in budget 44-45) (Andreasen, C.T., 2018,p.9).

PROPOSAL:

CATEGORY MANAGEMENT

4.4 Analysis

of ASOS market position and product structures has found opportunities for the company to continue expansion of ASOS private-label by introducing a more social conscious product selection to their product portfolio (Annex, Exhibit 13, SWOT, Opportunities and Threats). The proposed product portfolio therefore, exclusively features the ASOS private-label in order to push brand and initiative awareness as well as customer engagement with ASOS as a mono-brand.

The product portfolio for the collection buy will include four different consumer-centric ranges (ASOS, Curve, Plus Size, Tall and Petite) aligned with the website, in order to create the broadest reach possible within the millennial audience (Figure 5). As research found the millennial target highly price sensitive, yet additionally increasingly willing to invest in more staple and quality ori-entated products, the average price setting for the product offering is €33.

Figure 6 shows the weight of each category in term of product offering and is divided into per-centages according to importance for the millennial target as found through research (Annex, Exhibit 3 Marketing Mix, 5 Segmentation).

Figure 5: Average prices for selected product categories for the proposed retail format.

Average price for selected product categories for proposal General comments: Average prices are calculated by evaluation of the Recycled Denim price setting.

Included product ranges ASOS ASOS curve ASOS Plus Size, ASOS Tall ASOS Petite Selected product Jeans: €60 categories and average Dresses: €38 prices.

Shorts: €36 Skirts: €41 Jackets: €68 Shirts & Blouses: €32 Jewelry: €12 Bags: €27 Patches (in packages of 3): €8 Sunglasses: €16 Shoes: €32

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Figure 6: Proposed weight of product categories.

B O T T O M S

50% T O P S

A C C E S S O R I E S

30% 15% S H O E S

5% 37

BUYING PLAN

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5 Following

buying plan span over six months from June to November, yet only months from June to September feature buy-ins aligning with the duration period of the temporarily pop-store. For that reason, October and November are exclusively months used to sell possible excessive stock. The buying plan additionally gives emphasis to a from top to bottom planning. Based upon the established buying budget, the buying plan explains the specific budget proposed for each of the four opening months respectively given a valuation of 35% for June as opening month, July 25%, August 25% and September 15% as closing month, while October and November is given 0% in order to sell out possible stock. From there, a budget focus is given to the suggested product categories within womenswear with a deepened product focus for the Jeans category, as this product is of highest importance for the proposed conscious denim collection.

Three categories of jeans have been made, based upon the previous trend forecast for SS19, of Light, Coloured and Blue denim, and is suggested a buying percentage, from where the plan establish the exact num-ber of units that will be bought each month.

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RELATED NU

RELATED NU

RELATED NU

RELATED NU

RELATED NU

RELATED NU

40

UMBERS

UMBERS

UMBERS

UMBERS

UMBERS

UMBERS

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5.1 BUYING PLAN:

ASSORTMENT PLAN

As

the complementary assortment plan explains the weight in percentage of each jean size by waist and length measurements. Additionally, it highlights the assumed bestseller sizes by a darker blue, while the light blue indicates product sizes that helps the collection to meet the so-cial trend of embracing different sizes and body types, as suggested in the proposal. The assortment plan carries a similar approach to the light and blue denim categories, while the coloured section is proposed slightly different.

For the light and the blue category, the bestseller sizes vary from W25 – W42 (EU 34 – 52), while the coloured category has bestseller sizes are smaller sizes from W26 – 36 (EU 36 - 46). This is proposed to the assortment plan as consumer patterns show a tendency of larger sizes often is more attracted to a darker denim (in this case blue) instead for bold colour such as pink (Annex, Exhibit 5 Segmentation).

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JEAN STYLES

5.2 Detailed budget

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BUYING PLAN:

BUDGET

Following budget is divided in two, where the first part

gives emphasis to a briefly formulated overview of the overall calculation, and the second part explains the financial outlook in further details.

The second part of the budget additionally evaluates the proposal viability based upon a ROI (Re-turn of Investment) calculation that was found to 4%, which, considering the proposal objective with emphasis given to further

adaption of ASOS private-label product offering to current social and consumption trends, the ROI of 4% is substantial for ASOS to open the pop-up store at Placa Catalunya in Barcelona.

Following figures illustrate the proposed budget outlook of gathered investments, expenses and sales forecast in order to calculate the return of investment (ROI).

Budget overview

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Travers, R., 2017, Barcelona. Cushman & Wakefield, Retail Guide. cwglobalretailguide.com [Online pdf].Available at:http://cwglobalretailguide.com/barcelona/ [Accessed 27th May 2018].

Trotman, S., 2018, The Jean – S/S 19 Category Update, wgsn.com. [Online].Available at: https://www.wgsn.com/content/board_viewer/#/78245/page/1 [Accessed 28th May 2018].

Trotman, S., 2018, The Short – S/S 19 Category Update, wgsn.com. [Online].Available at: https://www.wgsn.com/content/board_viewer/#/78387/page/1 [Accessed 28th May 2018].

Trotman, S., 2018, The Short – S/S 19 Category Update, wgsn.com. [Online].Available at: https://www.wgsn.com/content/board_viewer/#/78387/page/11 [Accessed 28th May 2018].

Trotman, S., 2017, Trend Minute: Sensual Sheers, wgsn.com. [Online].Available at: https://www.wgsn.com/content/board_viewer/#/75135/page/1 [Accessed 28th May 2018].

Velasquez, A., 2017, What’s Next for Denim Culture?, Rivet. Sourcingjournal.com [Online] Available at: https://sourcingjournal.com/denim/denim-brands/whats-next-denim-culture-95800/ [Accessed 27th May 2018].

White, L., 2018, The Vision 2019: The most influential macro trends for next year, wgsn.com. [Online] Available at: https://www.wgsn.com/blogs/vision-2019-influential-macro-trends-next-year/ [Accessed 27th April 2018].

Williams, J., (N/A), ASOS choose ACS………..again!. Allport Cargo Services. [Online pdf].Available at:https://allportcargoservices.com/asos-choose-acs-again/ [Accessed 27th May 2018].

Wingfield, N., 2017. Amid Brick-and-Mortar Travails, a Tipping Point for Amazon in Apparel. [Online] Available at: https://www.nytimes.com/2017/04/30/technology/tipping-point-for-amazon-in-apparel.html [Accessed 27th May 2018].

Yates, D. 2016. The World’s Main Streets Analysed. Cushman & Wakefield. [Online].Available at: http://www.cushmanwakefield.com/en/research-and-insight/2016/main-streets-across-the-world-2016-2017/ [Accessed 27th May 2018].

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ANNEX

Exhibit 1: Brand history – timeline

Exhibit 2: Business model

ASOS is a unique, multi-platform experience that truly resonates with the people who use it, because it’s built by them. It’s a place to develop your own style and be inspired… and, of course, to shop. The business model of ASOS gives emphasis to online commerce with short lead times and customer centric values focused in a differentiated experience and content generating economy. The mission of ASOS is clear – to be the world’s no.1 fashion destination for 20somethings. (Authors of ASOS plc, 2018, Our Strategy. ASOS plc.).

Quick-response (fast-fashion model) - Short lead times - 6 weeks from sketch to site Retail format - pure e-commerce distribution Customer centric metrics - Free delivery and return policy - Premier - ASOS magazine - ASOS A-list - High level of customer service on social media

Exhibit 3: Marketing Mix

Product

Product categories Notes on each category Product metrics: (ASOS.com, - more than 85,000 products available to buy across any 2018) device - 300.000 dresses sold each week Consumer addressed The consumer-orientated categories, allows for a shopping categories: (ASOS.com, experience with a lifestyle-orientation that highly connects with 2018) the millennial consumer. The fact, that ASOS has implemented a ‘shop through your favorite ASOS influencer’-concept creates both aspirational but also a direct and personalized shopping experience and additionally personalized products. The influencers on the website represent a highly diverse gathering of millennials by culture and origin, body type and style and is breaking with the traditional-body type-influencer and way of approaching influencer marketing. It allows for a more direct customer connection and creation of brand relationship that goes further that the online platform.

1. Shop by product Shop through 12 different product categories.

- Sale - New in - Clothing - Shoes - Accessories - Activewear - Face + Body - Gifts - Brands - Outlet - Marketplace - Inspiration 2. Shop by range - ASOS Curve & Plus Size

- Maternity - Tall - Petite 3. Shop by occasion: - Wedding - Bridesmaid - Workwear - Holiday - Going-out-out - Festival 4. Shop by editorials – - The hot list mostly trend & - Just landed (e.g. MAC) market-orientated - New season - Trending now - Inspiration

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5. Shop by activity

6. Shop by brand 7. Shop by price 8. shop by product regulations

Brand categories: (ASOS.com, 2018)

Style feed Shop the story ASOS insider o Shop through favorite ASOS influencer o 25 ASOS Insiders are represented across all markets o 1,127,223 people follow the ASOS Insiders (Authors of ASOS plc., 2018, ASOS plc). o 17,880,228 is the total amount of engagements that Insiders add to ASOS (Authors of ASOS plc., 2018, ASOS plc).

- Marketplace o Shop from other independent and vintage brands and boutiques, in which denim is of high importance and product weight. Additionally, due to denim increasingly being associated with the 1990s trends and as a vintage and nostalgic element for millennials. Therefore, denim, as a product category, is featured both in the ordinary product browsing, but also in editorials and in ‘popular now’ categories, as the product category has become a classic more than a fashion fad.

- Gym & training - Outdoor - Running - ski & snowboarding - swim - yoga & studio - 1000+ brands - outlet - sort - size - product type - range - style - brand - colour - price range The brand categories span several factors that together provide a lifestyle-orientated portfolio rather than product-orientated.

Most recently ASOS has adopted one of the world’s leading cosmetics brands, the Canadian founded MAC cosmetics, that highly matches the values of the millennial target of diversity and acceptance of gender fluidity, as MAC is known for the iconic red lipstick. Moreover, an adoption of these types of brand to

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1. Men 2. women 3. new in 4. Clothing 5. Shoes 6. Accessories 7. Activewear 8. Face + body 9. Gifts 10. Outlet 11. Brands 12. Inspiration Brand portfolio: (ASOS.com, 2018) 1. ASOS private label

2. Other labels (multibrands) 3. Top brands

product portfolio allows ASOS to provide products for customers in line with the existing social media trends of make-up tutorials.

One of ASOS’s real competitive advantages lies in the scale of its own-brand assortment as it helps extending ASOS consumer reach, resulting in 60% of products sold on ASOS is exclusive to the brand itself (private-label products).

By following categories, ASOS exists as a market place for the targeted millennials, in which they can find just about anything they need for their type of lifestyle.

- 11 sub-categories - 11 sub-categories - 5 sub-categories - 17 sub-categories - 8 sub-categories - 10 sub-categories - 7 sub-categories - 11 sub-categories - 10 sub-categories - 21 sub-categories - 1000+ sub-categories - 3 sub-categories The brand portfolio is based upon both private label and multibrands.

- ASOS - ASOS 4505 - ASOS DESIGN - ASOS WHITE - ASOS EDITION - ASOS MADE IN KENYA - ASOS Salon - 1000+ -

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ASOS BRANDS ASOS 4505 ASOS EDITION ASOS WHITE Adidas Bershka Boohoo Chi Chi London Glamorous Miss Selfridge Missguided Monki

New Look Nike Noisy may Office Pull&Bear Reclaimed Vintage River Island Stradivarius Weekday

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Price

General price setting:

A wide range of brands and additionally a wide range of prices allows ASOS to satisfy all budgets, while employing a POS reductions strategy with temporarily discount ranges of products - highly connecting with the millennial target as they are at different life stages and therefore have different budgets. Moreover, the discounts cater for the price sensitivity of same target.

- This strategy of POS reductions is implemented by ASOS as a beneficial metric to increase site traffic and push increased purchases (Jackson & Shaw, 2009).

Price ranges of product categories: See following Figure 1 ASOS & Competitors lowest and The private-labels mainly hold the low prices, yet highest price setting for dresses: occasionally the other brands beat the private-label prices when on sale.

See following Figure 2

Figure 1: Price ranges of product categories WOMEN CATEGORY

CLOTHING Coats & jackets Dresses Hoodies & sweatshirts Jeans Jumpers & cardigans Jumpsuits & playsuits Lingerie & nightwear Loungewear Multipacks Shorts Skirts Socks & tights Suits & seperates Swimwear & beachwear Tops Trousers & leggings SHOES Boots Espadrilles Flatshoes Heels Sandals Slippers Trainers

PRICE RANGE

€15 - €655 €9 - €651 €12 - €350 €13 - €405 €13- €460 €11 - €502 €4 - €480 €6 - €95 €4 - €62 €8 - €344 €5 - €309 €3- €60 €17 - €518 €7 - €342 €4 - €350 €8 - €397

€24 - €369 €13 - €137 €11 - €178 €18 - €206 €11 - €205 €14 - €152 €11 - €326

ACCESORIES Bags & purses Belts Hair accessories Hats Jewellery & watches Scarves Sunglasses

€6 - €435 €6 - €138 €4 - €56 €6 - €117 €4 - €615 €7 - €172 €7 - €444

ACTIVEWEAR Accessories Jackets Leggings & trousers Shoes Shorts

€5 - €111 €23 - €410 €13 - €240 €35 - €244 €13 - €46

Sports bras Tops

€15 - €69 € 10- €147

WOMEN FACE & BODY CATEGORY PRICE RANGE Bodt care €4 - 62 Hair care €3 - €226 CLOTHING Makeup €4 - €150 Coats & jackets €15 - €655 Skin care €3 - €248 Dresses €9 - €651 South korean beauty €4 - €32 Hoodies & sweatshirts €12 - €350 Styling tools €5 - €226 Jeans €13 - €405 Tanning €4 - €56 Jumpers & cardigans €13- €460 Tools & accessories €3 - €232 Jumpsuits & playsuits €11 - €502 Lingerie & nightwear €4 - €480 GIFTS Loungewear €6 - €95 Books Multipacks €7 - €77 €4 - €62 Cards & gift wrap €4 - €21 Shorts €8 - €344 Gifts for him €4 - €275 Skirts €5 - €309 Socks & tights €3- €60 Home accessories €4 - €275 Suits & seperates €4 - €615 €17 - €518 Jewellery & watches Swimwear & beachwear €7 - €342 Novelty gifts €4 - €89 Tops €4 - €350 Stationery €4 - €62 Trousers & leggings €6 - €206 €8 - €397 Tech accessories SHOES Boots Espadrilles Flatshoes Heels Sandals Slippers Trainers

Figure 2: ASOS & Competitors lowest and highest price setting for dresses.

Brands Lowest price in € Highest price in € ASOS (excl. brands) € 14,10 € 253,11 ASOS (incl. brands) € 9,40 € 651,23 Brands Lowest price in € Highest price in € H&M € 241,69 ASOS (excl. brands) € 14,10 € 10,74 € 253,11 ASOS (incl. brands) € 9,40 € 10,74 € 651,23 ZARA € 93,99 H&M € 10,74 € 40,19 € 241,69 Urban Outfitters (excl. brands) € 80,38 ZARA € 10,74 € 93,99 Urban Outfitters (incl. brands) € 301,43 Urban Outfitters (excl. brands) € 40,19 € 40,19 € 80,38 Missguided € 245,97 Urban Outfitters (incl. brands) € 40,19 € 6,43 € 301,43 Missguided € 6,43 € 27,46 € 245,97 River Island € 205,98 River Island € 27,46 Topshop (excl. brands) € 13 € 205,98 € 360 Topshop (excl. brands) € 13 € 360 Topshop (incl. brands) € 13 € 360 € 360 Topshop (incl. brands) € 13

ASOS & Competitors Highest and Lowest Price ASOS & Competitors Highest and Lowest Price Setting for Dresses.

Setting for Dresses.

Topshop (incl. brands)

Topshop (incl.

Topshop (excl. brands) brands)

Topshop (excl.

River Island brands) Missguided

River Island Urban Outfitters (incl. brands)

Missguided

€24 - €369 €13 - €137 €11 - €178 €18 - €206 €11 - €205 €14 - €152 €11 - €326

Urban Outfitters (excl. brands)

Urban Outfitters (incl. brands) ZARA Urban Outfitters H&M (excl. brands) ASOS (incl. brands)

ZARA

ASOS (excl. brands)

H&M

0

ACCESORIES Bags & purses Belts Hair accessories Hats Jewellery & watches Scarves Sunglasses

€6 - €435 €6 - €138 €4 - €56 €6 - €117 €4 - €615 €7 - €172 €7 - €444

ACTIVEWEAR Accessories Jackets Leggings & trousers Shoes Shorts

€5 - €111 €23 - €410 €13 - €240 €35 - €244 €13 - €46

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100

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Lowest price in €

ASOS (incl. brands)

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Highest price in €

ASOS (excl. brands) 0

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Highest price in €

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Distribution channels General distribution overview:

E-commerce

Distribution

Notes on the specific channel Distribute multi-brand and private label products through localized mobile and web experiences, delivering from our fulfilment centers in the UK, US, Europe and China to almost every country in the world.

ASOS sources and manufactures from 28 countries, with 500 factories and in 2016 the company redesigned its supply chain and distribution system (Lennane, A., 2016), by highly investing in technology and logistics. Slightly similar to the market leader and Spanish retailer Inditex, ASOS aims to have just as short order times as it reduces logistic costs. This improvement of the distribution goes beyond customer delivery and connects the end-to-end business in its upstream supply chain. For the business model this means short lead times, increased local and mutual manufacturing in UK. Furthermore, this desire made ASOS adopt a new international supply chain management platform, Allport (Allport Cargo Serviced), to increase sales, visibility and cooperation across ASOS international supply chain (Williams, J., (N/A), AllportCargoServices.com).

Despite ASOS supply chain opportunity of adapting quickly to seasons and trends, the company enjoys an extended product life cycle as it provides for a large international market. This is highly useful for ASOS as southern markets experience reversed seasons than in the UK. Along with the increasing consumer trend of enjoying winter vacation in tropical surroundings, this allows ASOS to sell swimwear as a carry-over category through the year instead of seasonal (Authors of BusinessCaseStudies.com, (N/A), BusinessCaseStudies.com).

95% of ASOS delivery orders are tracked which benefits both parties – the company and the customer as it provides the customer safe delivery and the company reduced costs of failed or lost deliveries and customer care.

Automatization has highly been implemented within the supply chain management and has reduced warehouse operations drastically, while optimizing delivery efficiency (Authors of ASOS plc, 2016, ASOSplc.com).

For more numbers on ASOS 2017 retail sales see Figure 3 Eight local language websites UK, US, France, Germany, Spain, Italy, Australia and Russia

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M-commerce ASOS app ASOS Marketplace

Occasionally offline collaborations

No brick & mortar stores

Retail sales in 2017 (trading statement for the four months ended 31 December 2017) (Authors of ASOS plc, 2018, ASOSplc.com) - retail sales: +30% - retail margin: +80bps - international retail sales: +35% - active customers: 16,0 million (+19%) - Online traffic: 1,7 million people visited ASOS platforms in 2017.

69% traffic is generated from mobile devices 10m active installs of the ASOS app - 1000+ SKU’s on ASOS marketplace - 1000+ independent and vintage boutiques - 20 boutiques have progressed onto ASOS.com - 49 countries are represented (Authors of ASOS plc, 2018, ASOSplc.com) ASOS outfits ParalympicsGB for 2018 Winter Paralympics - ASOS’s relationship with the ParalympicsGB team stretches back to the Rio Paralympic Games in 2016 when it first partnered with the British Paralympic Association to design and create formal and ceremony wear as part of the brand’s commitment to raising the pro le of young adults with disabilities (Authors of ASOS.com, 2018, ASOSplc.com.).

Events - ASOS launched 2017 “ASOS Blank Canvas” tour to Italy, targeting students with a campaign giving emphasis to self-expression, creativity and individuality by offering a customization experience of creating personal tote bags (Authors of Seed Marketing, 2017, Seed Marketing).

ASOS founder Nick Robertson, ruled in 2013 that the company would not open a physical store as a complement to its online business. In an interview with BBC journalist Kirsty Wark in 2013, he stated: - "When we ask new starters what percentage of fast fashion they buy online, I get figures of 70 to 80%. Why would I open a store?" as he finds the POS extension “counterintuitive” (Bold, B. 2013).

The decision of not having any Brick & Mortar stores seamlessly matches the different inexpensive types of international deliveries (that varies from free delivery of spend more than €25,35/ or standard €4,04 to €12,16), and counterbalance the lack of physical stores by efficiency. (Authors of ASOS.com, 2018, ASOS.com.)

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Figure 3: ASOS retail sales by region (Authors of ASOS plc, 2017,ASOSplc.com)

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Social Media Channel Google+

Facebook

Instagram

Promotion

Number of followers/likes/subscribers gathered for each platform 2,4 million followers (Editors of ASOS, 2018. Google+.)

Note: The Google+ site features a range of unique gifs created by ASOS in order to differentiate the brand content that is uploaded to different social media platforms.

Moreover, the site uses a high level of inspirational and “how to” throughout the site (Figure 4).

5,4 million likes / 5,4 million followers (Editors of @ASOS.Spain, 2018. Facebook)

Note: The Facebook profiles hold a similar approach to content as Twitter and Google+.

On Facebook ASOS has the opportunity to connect further with the older part of the target audience.

20,1 million followers (Editors of @ASOS, 2018. Instagram)

Note: The content offered through they different Instagram accounts mainly features similar purposes as the different Twitter, Facebook and YouTube profiles. The official page is rather product orientated and functions as a main platform for ASOS to distribute news. The profile also carries a high level of influencer marketing, yet the influencers used are ‘exclusively ASOS’s’ as they are the same individuals as presented on ASOS.com.

The feeling of the official Instagram account is very current at up-to-date as it supports present issues such as gender and racial equality. The page is slightly more feminine than masculine in its appeal despite targeting both genders of the millennial target.

(Figure 5)

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Twitter

YouTube

ASOS Magazine

Pinterest

1,6 million followers (Editors of @ASOS, 2018. Twitter)

Note: ASOS has several Twitter accounts, despite their official profile, that in local languages features trend updates, different product categories along with customer services and support. (Figure 5) 80,8 thousand followers (Editors of ASOS, 2018. Youtube)

Note: The YouTube account features content such as campaigns, “how to” content, lookbooks & trend guides, makeup tutorials and branded content under the name ASOS Fashion Discovery in collaboration with i-D Magazine. The site has sub-accounts in local languages as the other social media channels.

(Figure 5) 700 thousand customers globally receive ASOS Magazine.

Note: ASOS Magazine featured the American singer songwriter Taylor Swift on their cover and added €19.3 million in PR value (Figure 6).

The content throughout the magazine mainly exist in inspirational and fashion edits.

Moreover, the magazine offers content that nurture and champion aspiring talents and ideas.

The magazine is available in ASOS key zones – UK, US, France and Germany (Authors of ASOS plc, 2018, ASOSplc.com).

606.5 thousand followers (Editors of ASOS, 2018. Pinterest)

Note: ASOS has a high success-rate on Pinterest measured by how my shares and pins they generate per week. In 2014 content from the ASOS Pinterest site generated an average of 7,202 pins a week and was at that time close to five times more than generated at Amazon (Ratcliff, C., 2014). The profile

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features content from this season’s fashion silhouettes to beauty, nail art and Bridal inspiration.

85% of active UK customers are enrolled in ASOS A-LIST. 3.9 million customers are collecting points with the initiative.

1% fall-out rate from customers how have opted out of the programme (Authors of ASOS plc, 2018, ASOSplc.com).

Today millions of UK customers are ASOS ALIST’ers and more than half a million vouchers have already been issued.

Note: In 2014 ASOS trailed its first Loyalty program online as a “earn while you shop”- concept functioning under the name “ASOS Alist”. ASOS had previously launched a similar concept called ASOS Rewards giving emphasis to a small number of UK shoppers (Authors of ASOS plc, 2016, ASOSplc.com).

The content is highly customer engaging and offers customers a much richer experience of ASOS it moreover allows ASOS to further establish a customer-to-brand relationship bridging for improved loyalty in a highly disloyal target mindset.

Online Loyalty Scheme “ASOS A-list”

Figure 5: ASOS social media accounts REFS

Figure 4: ASOS Google+ (Editors of

ASOS,

Figure 6: ASOS Magazine ref

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Exhibit 4 & 5: Target & Segmentation

Target

Brand target statement

Main target for ASOS popup: Secondary target for ASOS pop-up

1.1.2 Segmentation

Demographics

1. Millennials in Barcelona

“Our aim is to build an increasingly desirable, defendable and differentiated business model, with a customer experience to match. From fashion advice, stories and inspiration, to more than 85,000 products available to buy across any device, ASOS, with its unbeatable service, is a true home for young fashion lovers. Our mission remains unchanged: to be the world’s no.1 fashion destination for 20-somethings. (Authors of ASOS plc, ASOS plc.)”

A range of female millennials from tourist to locals mainly woman Girls and women outside the target range (respectively Generation Z and Babyboomers) that has been enlighten by press, media or as pass-by’s.

Segmentation

Despite the brand target statement, of targeting 20-something, the brand reach goes beyond that age group and includes the following cohort Generation Z (born from mid-1990s to early 2000s, and therefore the target of ASOS becomes around 15-30 years old (Millennials and following Generation Z) (Velasquez, A., 2017).

As the Millennial and Generation Z definition goes beyond demographics metrics as it is rather measured by a combination of their values, life experiences and buying behaviors (Leung, 2003). For that reason, the target that might fall out of the specified age range will be included as a secondary audience.

Main target for ASOS pop-up: a range of ‘female’ millennials from tourist to locals.

Secondary target for ASOS pop-up: women outside the target range that has been enlighten by press, media or as pass-by’s.

The millennial target in Barcelona accounts for: - 368.972 thousand (22,9% of the total population) men and women in the age between 15-34 years old according to official population figures by Ajuntament de Barcelona (Authors of Ajuntament de Barcelona. 2017, Ajuntament de Barcelona) (Figure 7) The target is therefore present for ASOS in Barcelona.

According to the Catalan newspaper El Periodico, 'millennials' are changing the classic model of consumption. It states that, young people

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2. Millennial tourists in Barcelona

3. Millennials in general

Geographic

between 18 and 35 years old prefer to spend money on technology, healthy food, sports and leisure. The main difficulty of the companies when addressing this social group is the low purchasing power as the salary in Barcelona has an average of â‚Ź1.350 (Martija, p. 2018).

As the capital of the Catalonia region in Spain and one of the most popular city-vacation destinations in Europe for international tourism tourist must be taken into account for the segmentation.

- In 2016 overnight tourists in Barcelona reached over 9 million.

- Spending of international overnight visitors to Barcelona reach a total of approximately 8.9 billion U.S dollars and makes Barcelona one of the leading European cities in terms of international visitor expenditure (Authors of Statista, 2017.

Statista.com.). (Figure 8) - According to the Ajuntament Barcelona, Barcelona had 34.009.543 over-night tourists in 2017. Of them 6.801.908,6 (20%) where in the millennial age (Authors of Ajuntament de Barcelona. 2017. Ajuntament de Barcelona).

Official age statement of millennials: 19-36 by Forbes (Spenner, P. 2014): - Born between 1980 and 2000, Largest population by size (Authors of Goldman Sachs Global Investment Research, (N/A).

GoldmanSachs.com) - According to Goldman Sachs: In the US: 92 million millennials has been registered in 2015 and outgrows previous generations of Generation x (61 million) and Baby boomers (77 million) additionally measured by 2015. (Authors of Goldman Sachs Global Investment Research, (N/A). GoldmanSachs.com) (Figure 9) - The extend of the ASOS target largely consist of millennials, yet according to the official age statement by Forbes ASOS’s target goes beyond millennials as in includes the demographic cohort after millennials, Generation Z.

According to the brand statement, the segmentation seeks to address 20-something men and women. As a result of this statement the product portfolio and service offering was additionally centralized around this audience.

Millennials tend to live at home with their parents (Authors of Goldman Sachs Global Investment Research, (N/A). GoldmanSachs.com) (Figure 10) Brand statement:

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Behavioural 1. General

“Geographically, we're currently focusing pricing and capital investment in three target markets: the UK, continental Europe and the US.” (Authors of ASOS plc. 2018. ASOS plc)

Online and therefore broad reach with head quarter in UK.

Tailor the mix of own-label, global and local brands sold through each of our eight local language websites: UK, US, France, Germany, Spain, Italy, Australia and Russia (Authors of ASOS plc, 2018, ASOS plc).

Delivers to almost every country in the world (Authors of ASOS plc, 2018, ASOS plc).

- Mostly Generation Z, do not perceive 90’s labels like tommy Hilfiger and Calvin Klein as nostalgic, they are more in liking of the aesthetic of the decade (Velasquez, A., 2017).

- Many of the styles in liking of this target today, is the same styles as other subcultures wear and have been wearing. They style did not change, but the universe behind it did, as for why, the target today associate denim with Hip Hop than rock ‘n’ roll (Velasquez, A., 2017).

- Values has come to matter – consumers attitude towards sustainable fashion is changing.

- Increasingly lifestyle-orientated, according to a report from Rivert on “What’s Next for Denim Culture?”, “Being eco-friendly is not a brand value, it is a given. It is normal for the new consumer. It is the minimum that they want from you. They want your product to be eco-friendly but they want to adopt that with fun and style,” (Velasquez, A., 2017).

- Gender is no longer a question and is highly empowered for what it must be.

- Size is not an issues for this target and it believes it to be oldfashioned to think there’s only one size and only one recommendation. They believe it is important to take care of all sizes (Velasquez, A., 2017).

- Unique sense of self à call often for customization and brand/ product personalization - Untraditional approach to life - Optimistic worldview/outlook despite of the global economic challenges the future carries.

- Inward-focused (happiness, passion, diversity, sharing, discovery) values plays an increasingly important role of millennial consumers rather than collective-focused preferences (justice, integrity, family, practicality, duty) that highly influenced the Baby Boomers generation.

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2. Online

3. Offline

Millennials are in general more likely to make purchase in a physical store if the point of search has taken place both online and offline (Kestenbaum, R., 2017).

- Discounts are often of higher values to this target audience than other values such as authenticity, local sourcing, ethical production and shopping experience (Kestenbaum, R., 2017). o this moreover causes a high disloyalty-rate: according to Forbes 33% of millennials will switch brand if they are offered a discount of 30% or more.

- Their behavior and the changes that have occurred in society over the past 30 years and force companies to rethink the relationship with these consumers. The communication must additionally change accordingly.

- This transformation is due to several factors. The two most important ones have been that millennials have lived in a time when the technological explosion is constant, and the global financial crisis, which highly has affected and increased consumer expectations. Millennials is the group in which this has influenced the most (Martija, p. 2018.)

Price sensitive - 80% are influenced by price (Kestenbaum, R., 2017) - The majority of millennials follow brands on more than one social media platform, and often follows the brands in order to gain discounts (Kestenbaum, R., 2017).

Millennials is the segment that accounts for the highest share of online apparel revenue (Stanton, T., 2017) - their spending power is set to surpass $1 trillion by 2020 (Donnelly, C., Scaff, R., (N/A)) (Figure 11)

Makes most purchases online (Kestenbaum, R., 2017).

- Learning to buy through the mobile

“want it all, want it now�- concept - low price points and excellent benefits, rapid development and expansion, work/life balance, alternative careers, while contributing to society (Ng, Schweitzer, & Lyons, 2010).

Price sensitive

- 80% are influenced by price (Kestenbaum, R., 2017).

Invests in experiences such as travels, music festivals, eating events more than material goods.

- Desire to be part of first-hand experiences.

Do not expect Generation Z to go shopping or window shopping.

Simple in-store displays no longer cut either (Velasquez, A., 2017).

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4. ASOS official statement on 20-something consumer behaviour.

Psychographics

(Authors of ASOS plc, 2017. ASOS plc.)

- Fast pace living - Focused on hard work, social life and health - More digitally connected than any other generation (Gray, C.M., 2015) - The majority of individuals within this target segment are facing life milestones such as graduation, entering workforce, settling into long-term relationships or buying first house or apartment.

- Redefining the global economy and consumer expectations towards established social behaviors and circumstances such as online and offline consumption, adultery, career opportunities.

Moreover, this highly influences previous and post-millennial generations (Authors of Goldman Sachs Global Investment Research, (N/A), GoldmanSachs.com).

- Interest in contemporary hobbies.

- Open-minded world view, yet strong opinions towards current and sensitive subjects.

- Peer-orientated generation (Authors of Green Buzz Agency, 2017, GreenBuzzAgency.com)

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Figure 7: Official population figures (Authors of Ajuntament de Barcelona.

2017. Ajuntament de Barcelona.)

Figure 8: : International visitor spending in Barcelona from 2012 to 2017 (in billion U.S. dollars) (Authors of Statista, 2017. Statista.com.).

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Figure 9: A larger cohort. The Millennial generation is the biggest in US history— even bigger than the Baby Boom. (Authors of Goldman Sachs Global Investment Research, (N/A). GoldmanSachs.com)

Figure 10: SNUG IN THE NEST...A growing number of Millennials are choosing to live at home with their parents. (Authors of Goldman Sachs Global Investment Research, (N/A). GoldmanSachs.com)

Figure 11: The Millennial generation spending on online apparel compared to Gen x, Boomers and Silents. (Stanton, T., 2017)

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Exhibit 6: Persona

THE CONSCIOUS FASHIONISTA NEEDS

OUTLINE 21 years old Studying visual communication in the second semester and working as sales assistants in popular and specialized concept store.

Fast, convenient and relatively cheap products and services to match her fast-paced lifestyle. Moreover, she finds socializing outside from work and university with family and friends a need in her daily life to get away from the stress and daily routine.

Her health and wellbeing is additionally an important factor, along with the ability to express herself creatively and feel passionate about a certain subject.

Born in Madrid, but moved to Barcelona for studies.

Highly interested in fashion, which is reflected in her social media accounts.

Her Instagram profile has gained enough follow, so she has established a blog as well.

Spend a lot of time on digital media in her daily life and routine Grew up in middle income family, who provided her with a world full of opportunities.

In a relationship.

CONCERNS

She is very concerned about monetary issues as her budget is limited by living away from her parents. for that reason she highly values discounts, but also want’s her products to last beyond a single season.

She is concerned about the balance between followers and following (how many she follow herself) as is creates an exclusivity around her profile.

FRUSTATIONS

She is frustrated about the current social order of the world generated by stereotypes, as for why this topic has become highly important for her.

Another frustation exist in the lack of brand adopting to other body types than the one from the commercials.

Slow internet and digital devices make her jump off the media and quickly or turn to an alternative.

She is often challenged by the limitless possibilities that constantly are offered in terms of just about everything, which makes it difficult to decide on her future career and life choices.

POSITIVE TRENDS She is a supporter of the current social trends concerning world peace, empowerment of gender fluidity, diversity, homosexuality, gender roles, cultural differences and body embracement. She would happily join protests, yet she would be background supporter and not as an extreme activist. She highly values good and well done online content that appeal to her interests and lifestyle.

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BEHAVIOUR

She highly operates according to openness, politeness and hard work as it gets you the furthest in today’s society. She loves getting recommendations and information from friends if it is not personalized from brands. Online she typically browses through online platforms by use of sales categories or a selected price range in order to manage her limited budget. Online, she follows brands she likes that is both within her reach in terms of price and style, yet she also follows aspirational brands (read luxury). She additionally follow brands to gain promotional offers and discounts. She often turns to sites like ASOS as it independent of time, day and hour provide same service, product, and experience, but she has no problem with changing brand if other offers are better.

HOPES

She hopes for a more socially concerned world structure in terms of a more environmental and social conscious approach to life.

Moreover she hopes to figure out if her career choice is the one fitting her the best and in the future to have more finanical flexibility to loose some of her daily concerns and to be able to travel more.

Exhibit 7: Competitors

Competitors General

Brands considered direct competitors in Barcelona

As for competitors, ASOS mainly competes against fast-fashion retailers such as Boohoo, forever 21, H&M, ZARA, Urban Outfitters, Misguided, River Island and Topshop as established in the Price sections of the marketing mix. Even though these competitors follow fast-fashion and quick response business models, the strategies of the retailers are far from similar. Below Figure 12, shows how ASOS may have the largest assortment, even close to three times more than the nearest competitor, Boohoo. Nevertheless, the numbers in the figure additionally shows that ASOS of all the retailers has the least growth since 2015 (Smith, K., 2017). These retailers are tied to each other as global competitors in terms of speed, price points and unique (fashionable) products. What moreover, tie these retailer to the same market is how quickly and how they are responding to the current and trending consumer behavior. It has come down to depend on content, unique products and convenience, while still keeping with a fast distribution and a price conscious approach.

As the proposal seek to introduce a more conscious selection of the environmentally debated, yet classic product category, denim, into the ASOS buying plan for the pop-up store in Barcelona, the list of competitors will extend to denim-orientated brands as well. The price will additionally slightly increase, as the further conscious assortment that will be bought requires longer procedures.

Following brands are considered direct competitors for ASOS to open a pop-up store in Barcelona. They mainly consist of fast fashion retailers such as Inditex and the H&M Group, supplemented by the URBN Group and brands such as Mango and Brandy Melville. The direct competitors, moreover generally targets a similar audience of millennials and is largely located in the commercial areas Figure 13.

- Urban Outfitters - & other stories - H&M - ZARA - Mango - Brandy Melville - Cos - Uniqlo - Bershka - Pull&Bear - Stradivarius - Gap - Levis - Pepe Jeans - Vintage or second hand-stores

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Brands considered Department stores: indirect competitors in - El Corte Ingles Barcelona o As the most important department store in Barcelona, (multi-brand stores which offers several international fashion brands and established or located services like beauty lounge and pharmacy. in Barcelona) - La maquinista - Fnac L’llla - Les Glories - Maremagnum - Diagonal Mar Concept and multi brand stores - The outpost - Santa Eulalia - KR Store - Boo - Grey street - Lurdes Bergada - Coquette - Aleluya store Barcelona - Conti 24 Kilates - Sneakers & streetwear - Colillo de morsa - Notenom Global competitors - Topshop See Figure 14. o As it stocks multi-brand along with private-label just as ASOS - Forever21 - Urban outfitters - Zalando - Boohoo - H&M Group - Inditex - Amazon – cheap clothing - New Look retailers - Miss Selfridge - River Island - Missguided Global competitors list - Topshop with implementation - Forever21 of the conscious denim - Urban outfitters product category.

- Zalando See Figure 15.

- Boohoo - H&M Group - Inditex - Amazon – cheap clothing

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- New Look retailers - Miss Selfridge - River Island - Missguided - Cheap Monday - Tommy Hilfiger - Lee - Replay - Levi’s Within the positioning map, the positions are determined by the brands individual activities and adaption to current social consumptions trends.

Products and brands in In line with the target audience (millennials, and entering Generation the market that might Z) of ASOS (Annex, Exhibit 5 Segmentation), brands will only partly be affect the following determining the trends by 2019. The other part that holds voting power is the target and its stances on political and social topics, that buying plan. according to a report from Rivet, on “What’s Next for Denim culture?”

(Velasquez, A., 2017), will greatly influence the brand and companies supported by the target, as this target is mature and understands better than previous generations topics such as equality and ecologically. Additionally, the report states, that values such as gender and sizes come to matter as well as consumers’ attitude towards sustainable fashion is changing and is being adopted into their lifestyles (Velasquez, A., 2017).

Nevertheless, some brands either carry a historic or technological potential to influence the following proposal for ASOS’ buying plan.

Mass market brands such as Muji and the British designer Christian Cowen have recently adapted jean pockets to hold smartphones, and Levi’s collaborated with Google’s Project Jacquard for wearable technology to push for improved consumer experiences (Velasquez, A., 2017).

The brand-power and influence will come from both the high-end market and the anti-fashion designers as well as from brands partnering with unlikely collaborators (See Table 1, p.14-15). For Spring ’18, high-end luxury brand Chanel unveiled a collection that mixed denim with a more classical and typical Chanel DNA, while Dior recreated workwear for Fall ’17 and in the meantime Lacoste did denim track suits for Spring ’18, Balenciaga added cargo pocket jeans to their product portfolio, avant-garde designers such as Japanese label White Mountaineering mixed denim and sportswear and H&M initiated a unisex denim collection to support the social trend of gender empowerment. Likewise, brands partnering with artists, brands or public figures will gain increasing importance as the collaborative approach allows even traditional brands such as Levi’s to experiment in new looks and extend market reach (Velasquez, A., 2017).

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Figure 12: scale of fast fashion (Smith, K., 2017).

Figure 13: Competitors located around Placa Catalunya

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Exhibit 8: SWOT – strenghts & weaknesses

SWOT

STRENGHTS

The low price setting fits the price sensitive target audience and is highly advantagous in competing with the surronding competitors.

However, consumption trends show that especially Generation Z are willing to invest in more Adapts to the requirements staple pieces. of the millennial and GeneThe target ration Z audience in targeting is highly present (both locals the individual by product filters, and tourists) in Barcelona for ranges, A-list, Marketplace and ASOS to open a offline store. shopping through favourite ASOS influencer.

As operational structures are gathered in a vertical business integration for ASOS private label, the compnay can easilier re-organise distibution structures to more CRS orientated solutions.

WEAKNESSES

Lack of offline stores results in weakened possibility to meet target requirements,social and industry trends of omni-channel consumption 1 �Want it all want it now� concept - Increasing consumer expectations for fastness, flawlessness, convenience and low price points.

A more conscious social behaviour and consumption pattern for the target audience, allows ASOS to elevate its current recycleddenim initiative.

The broad product assortment cater for a shopping experience with lifestyleorientation that highly connects with the millennial consumer. It allows for a more direct customer connection and creation of brand relationship that goes further that the online platform.

1. See previous reports (CWK1 & CWK2) on the distribution method e-commerce and retail management.

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As ASOS cater for a very wide audience for both women and men in various sizes and hights, the company is in danger of losing focus on their main or original customer.

80% of millennials are influenced The vertial and all encompassing in-house by price and ASOS is not the cheintegration that ASOS apest of all competitors. Discounts operates under, results in are additionally of high value to the millennial target the company, becoming often causing a high rather repetitive in its disloyalty-rate product portfolio and Lack of communicative actimarketing approach. ons on existing recycled/sustainable initiatives, as well as, no paid advertising in publications that appeal to its target market.

Exhibit 9: PEST Analysis

PEST Analysis Political factors -

Sociocultural factors

Current political landscape will according to WGSN Insider report have lasting effects on globalisation beyond 2019, as many consumers and countries might turn to a concept of de-globalisation and give focus to domestic growth and increasingly local benefits. For that reason, consumers might seek to connect locally in real life and globally through social media channels (White, L., 2018). (See sociocultural factors).

This political situation will assumingly push countries to find common ground and new allies in new markets.

-

-

-

-

-

-

-

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Consumers look to invest in staple pieces of high quality to mix and match with a few statement items, according to John Lewis 2017 retail report (Authors of John Lewis, 2017).

According to WGSN Insider report, one of the most influential macro trends for 2019 will exist in a social development of a creative manifesto, why creativity and self-expression will become increasingly essential skills for both business and design. Additionally, the report pin points the importance of businesses adopting strategies that will push outside the comfort zone and inspire actions (White, L., 2018).

Increased public interest in the art world.

(Sherman, L., 2016).

Social media, has additionally played a major role in democratizing the art world, making it a growing pillar of popular culture and a more approachable area for retailers.

Retailers adopting artistic collaborations and partnerships, is a relatively new approach for fast-fashion retailers initiated around 2004

by H&M collaboration with Karl Lagerfeld.

Yet the strategy has been existing for a long time for luxury retailers.

Consumers are connected and in control (Amed, I., Andersson, J., Berg, A.,Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018). 
 Consumer behaviour seamlessly move towards omnichannel shopping jouney (Amed, I., Andersson, J., Berg, A.,Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018). 
 No tolerance regarding friction Sharing peer-to-peer information, reviews and opinions (Amed, I., Andersson, J., Berg,

-

-

-

-

-

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A.,Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018).

High expectations of total fulfillment of all brand offerings such as convenience, quality, values orientation, newness and price (Amed, I., Andersson, J., Berg, A.,Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018).

Internet of things (IoT) is provides fashion retailers with opportunities to gain new and thorough customer insights. Both online and offline retailers or brands are able to track the exact shopper journey and how they interact with the products. If this data is combined with real-time analytics retailers or brands has clear possibilities to improve the entire customer path to purchase with enhanced services and experience (Detego Website Editors, 2018). 
 Increasing environmental and ethical conscious consumer behavior Continuous need for brick-and-mortar and human interaction In line with increasing consumer spending the different formats and channels are additionally changing and marks the evolution of the retail sector. Consumers tend to seek out both common and differentiated experiences throughout their path to purchase (Sides, R. & Ament, L., 2018).

Likewise, consumers have lost interest in shopping centers/malls as there is a growing interest towards buying online along with brands experimenting with direct-toconsumer communication (Steiner, R., 2017).

For fashion brands this online evolution within the retail sector causes immediate brand actions towards how to collaborate with large online players as they provide the brands with convenience and relevance due to the digitalised consumer shift. Whether it is mass, specialist or premium platforms these are often the first point of search and are expected to grow in both scale and reach attracting even more fashion brands to

-

-

-

-

-

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participate with these new distribution channels (Amed, I., Andersson, J., Berg, A.,Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018).

55% of US consumers begin their online product search on Amozon (Amed, I., Andersson, J., Berg, A.,Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018).

Growing significance of m-commerce and digital integration throughout the shopping experience. End-to-end transactions will moreover seek towards mobile solutions and further push the consumer expectations for fashion companies to provide increasingly convenient mobile transactions (Editors of Business of Fashion, 2018) Online platforms are expected to be positioned among the top three market trends of 2018, as the retail method increasingly dominates the retail environment and proves the consumer shift towards online retailers as first point of search rather and brick-and-mortar.

This online dominance shows as Amazon is expected to become the largest US retailer (Wingfield, N., 2017), while Tmall and JD.com collectively dominate more than 80% of the Chinese online apparel market and furthermore supported by the world’s largest online shopping day “Single’s Day” by the Chinese multinational e-commerce platform, Alibaba (Amed, I., Andersson, J., Berg, A.,Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018).

To match today’s global, millennial-driven consumer profile, fashion brands tend to give focus to global product/brand management in order become more uniform by standardising operational metrics. This penetrating globalization pushes an opponent of localization and forces global retailers to striking the right balance of seizing the local benefits, while guarding brand integrity and economies of scale (Kansara, V. A, 2017)

-

The rapid growth of online trading has evoked a consumer desire for online retailers to integrate personalised services prior to manufacture. Based on existing technology these user-led design- and complete experience processes, increasingly takes place online, but offline retailers have additionally begun adopting the consumer desire. This initiative is represented by the model of mass-customization and successfully pairs with the rise of mcommerce.

- A trend that has highly affected online distribution, is the adoption of real integration of social media in buying processes. It comes in line with the increasing importance of m-commerce and has provided consumers with more control, information and power over the market process. The great impact of social media interactions and commitments between brands and consumers have globally affected purchasing decisions of consumers.

- As an antidote to the increasing importance of social media in buying processes, consumers want to elevate emotional and physical touch points occasionally opting out entirely from the online scene. 2019 will be about designing for feelings in a new emotional era (White, L., 2018,).

Economic factors Technological factors - Growing economic/market optimism, - Disruptive technologies such as advanced forecasts predicts a 3,5-4,5% of global robotics, mobile internet, advanced analytics, fashion sales in 2018 (Editors of Business of virtual- and augmented reality and artificial Fashion, 2018). However, this growth is not intelligence is moderately being adopted by evenly distributed across the world. the fashion industry, additionally they carry Mature/developed markets are growing by 1the potential to disrupt it. For the same reason 3%, while emerging markets are experiencing “local heroes” with average value proposition growth from 5- 7,5% (Amed, I., Andersson, J., is challenged in competing with market Berg, A., Drageset, M., Hedrich, S., “unicorn’s” (Amed, I., Andersson, J., Berg, A., Kappelmark, S., Young, R., 2018).

Drageset, M., Hedrich, S., Kappelmark, S., - Economic growth shift from West towards Young, R., 2018).

East and South (Editors of Business of - Growing digitalization in both online and Fashion, 2018) offline retail environment. Online platforms - More than 50% of the industry revenues in have increasingly penetrated the industry

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-

-

-

-

2017 came from emerging markets (Editors of Business of Fashion, 2018).

The economy is expected to continue to grow at a sufficient 2.0-2.5 percent rate in 2018 (Sides, R. & Ament, L., 2018) Consumers are in possession of greater monetary disposals, as the unemployment and inflation is low. Households are experiencing growing wealth due to rising prices on real estate and a strengthened stock market (Sides, R., R., 2018).

Growing domination of the emerging Asian markets as they are in possession of more than 60% of the world ecommerce unicorn’s (private companies valued at $1 billion or more) and 50% of global online retail sales, while pioneering digital and technological innovations. For the same reasons, the Asian market outperforms the Western companies and are expected to further solidify their position by greater innovations, global scale investments and expansion (Editors of Business of Fashion, 2018).

The current economic situation of retail is experiencing a state of recovering post economic crisis, especially with emphasis given to the proposal’s market of interest, Barcelona, Spain. Nevertheless, 30% of consumers in Barcelona, under the age of 25, are unemployed, which additionally causes a relatively damaged millennial purchasing power. However, as mentioned in the sociocultural factors, consumers still seek towards inventing in more staple and qualityorientated products that often carry a slightly higher price setting.

For that reason, this economic situation pays of beneficially for a company like ASOS, who offers a low price point combined with a unique product proposition, despite less investment is given to service. Compared to another price-orientated fast-fashion retailer such as Primark, ASOS give more emphasis to a unique product proposition than price

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-

-

-

-

-

retail space and is expected during 2018 to further strengthen its position.

Growing demand of digital retail experience will assist an increasingly important two-fold in-store and online role (Sides, R., R., 2018).

The increasing importance of omni-channel distribution allows digital methods potential, not only to effect, but also to gain market share. These retail trends cause brands to consider reshaping main business approaches such as customer behavior, value proposition and design of operational model (Sides, R., R., 2018).

Adoption of unconventional technologies allows retailers new opportunities to innovate and digitalise across their value chains with refined cost structure (Amed, I., Andersson, J., Berg, A., Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018).

New advanced technologies such as augmented, virtual, and mixed reality may assist retailers further develop consumer- and experience centric options for direct-toconsumer engagement in- store or at home (Sides, R., R., 2018).

Accelerated industry pace: industry leader push limits of time from design to shelf.

Due to transformative shifts such as consumer adoption of digital approaches, new innovative business models are adopted by industry leaders (Amed, I., Andersson, J., Berg, A., Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018). The new business models are therefore based upon highly detailed customer data and insights in order to mark or renew customer touch points and hereby differentiate within the market by pushing distribution efficiency.

Decline in Brick-and-mortar traffic requests reinventions of offline retail spaces often with emphasis given to digitalization.

Artificial intelligence (AI) is expected to be implemented across all parts of the fashion value chain and industry leaders are therefore

exclusively.

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-

-

-

-

-

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entitled to explore new ways of seamlessly generating value in customer- and interactive processes (Editors of Business of Fashion, 2018).

In line with the growth of online platforms, many of these, begins developing own private fashion labels to give strength to own positioning within the fashion sfere. This expansion of portfolio is expected in two ways.

Either by construction of own fashion talent pool or by acquisitions to gain similar capabilities (Amed, I., Andersson, J., Berg, A., Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018) Acquisitions may also be used for online platforms to developing own customer base or gaining access to new segments (Amed, I., Andersson, J., Berg, A., Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018) The rapid expansion of online platforms is expected to develop into the premium and luxury market with focus given to offer an attractive value proposition, service and user experiences (Amed, I., Andersson, J., Berg, A., Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018).

Collaborations and partnerships has also been adopted by online platforms to bring external brands into their portfolio. An example might exist in the partnership between Tmall and New York Fashion Week that allowed Tmall access to premium customers (Amed, I., Andersson, J., Berg, A., Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018).

These partnerships might also be developed in- house through different levels of vertical intergration (Amed, I., Andersson, J., Berg, A., Drageset, M., Hedrich, S., Kappelmark, S., Young, R., 2018).

For fashion brands, the partnerships or collaborations with online platforms can be a highly beneficial component in terms of offering a seamless omnichannel brand experience, while assisting the brand in expanding into new segments or market.

Increasing technologic developments towards cybercrime protection. While cybercrime may be a current and future challenge, it also carries opportunities for retailers to develop increasingly personalized technologic customer services. Yet in today’s retail environment it is of high important for retailers such as ASOS to exclusively change according to consumer demand in order to stay nimble and agile (Authors of The Telegraph, 2017).

Exhibit 10. Data analysis of main commercial areas in Barcelona

Data analysis of main commercial areas in Barcelona & retail rental rates General traffic:

Main commercial areas: 1. General

2. Main commercial streets and areas in Barcelona (commercial mix is partly commented in the street description and following figures)*

Inter-annual percentage variation of the daily average of pedestrian traffic in commercial streets and shopping centers, compared to the same month previous year tracking by February 2018 of Barcelona by The Traffic Index. Tracked by TC-street sensors, Barcelona faces a 3.67% decrease since last year (Authors of TC Group Solutions, 2017,Tc-street.com).

Figure (16): The traffic Index (ITPC)

Studies in profitability of main commercial streets has shown an importance of the visitor for the commercial axes of Barcelona as some of the most valuable in Europe. These areas or streets are closely linked to shopping and tourism and especially shopping streets such as Portal de l’Angel and Paseo de Gracia are undeniably among the most influential areas for retailers, yet the majority of brands and retailers is separated from the actual candidates when considering rental rates (Authors of OI Realtor, 2017, Oirealtor.com).

As mentioned in the segmentation the tourist flows are an undeniable important factor to the economy of retail sales in Barcelona. These supposes between 60% and 80% of the sales in the commercial areas in Barcelona and has highly compensated for the slow recover in domestic consumption (Authors of OI Realtor, 2017, Oirealtor.com).

Portal de l’Angel - Mass market, High Tourism Activity - Portal de l’Angel is one of Barcelona’s most visited streets with highest pedestrian flow as it targets mass market and therefore drive a high level of tourists to the area. The popular street is located next to the city center, Placa Catalunya, and functions as a part of the downtown commercial area. As for rental rates, the street is additionally to its pedestrian flow one of Barcelona’s most expensive retail spaces. Retailers located at this street is placed closely to each other and include major retailers such as: o El Corte Inglés, Zara, Massimo Dutti, Pull & Bear, Cortefiel, Stradivarius, Oysho, Tezenis,

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Bershka, H&M, Benetton, Shana, Calzedonia, Yamamay, Parfois.

- New entrants: o Macson, Parfois, Brandy & Melville - (Yates, D. 2016.)

- Figure 17: shops at Portal de l’Angel Passeig de Gracia - Mass market, High End, Luxury, High Tourism Activity - According to the latest market report of Cushman & Wakefield, Passeig de Gracia is among the top three most expensive shopping streets in Spain and the first in the premium sector. The street is moreover one of the important drivers in any tourist route through Barcelona, as the street combines architecture, business and shopping. The street stretches from north of Barcelona, Gracia, to the center at Place Catalunya and directs a complete walking route for both locals and tourists passing everything from fast-fashion flagship stores to high end luxury retailers, Apple and the two Gaudi buildings (La Pedrera & Casa Batlló).

- Despite the fact of Passeig de Gracia increasingly attract mass market, the street is currently the only established location for premium/luxury retailers.

- Major retailers present: o Apple, Prada, Puma, Mango, Stella McCartney, Bottega Veneta, Zadig & Voltaire, Guess, Michael Kors, Liu Jo Zara, H&M, Desigual, Adidas, Nike, Camper, Nespresso, Replay, Emporio Armani, Chanel, Gucci, Louis Vuitton, Burberry, Ferrari, Bvlgari, Montblanc, Dolce & Gabbana, Dior, Versace, Macson, Rolex, La Perla, Maje, Wolford - New entrants: o Sueños Negros, Adolfo Domínguez, Sandro, Kiabi, IKKS, Kenzo, Seat - (Rodda, M., 2016).

- Figure 18: shops at Passeig de Gracia Avenida Diagonal - Mass market, Mid End - Avenida Diagonal is located across Barcelona and divides the city in two, diagonally from west to east.

The street is a highly viable and commercially

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profitable axis, however the street is placed away from the walk of preference directed towards the centre (Passeig de Gracia – Placa Catalunya) - Nevertheless, Avenida Diagonal recorded a healthy increase in rental growth in 2015 by 33,3% (Rodda, M., 2016).

- According to the latest market report of Cushman & Wakefield the most trafficked part of diagonal is situated between Francesc Macià and Passeig de Gracia, in which the street is considered a suitable location for brand/store extension as second point of sale.

- Major retailers present: o Benetton, Comptoir des Cotonniers, Sandro, Hugo Boss, Mango, Cotélac, Zara, Massimo Dutti, Uterqüe, Zara Home, Kuoni, Gerard Darel, Asics, Costa Coffee, Nice & Crazy, Cachito - New entrants: o Movistar, Rituals, Puerto Chico - (Rodda, M., 2016).

- Figure 19: shops at Avenida Diagonal Rambla Catalunya - Mass Market/Mid End - Rambla Catalunya is located parallel to Passeig de Gracia, but holds a more traditional and local feeling compared to its high-end opponent. The retail offering varies between medium to high-level brands.

- Major retailers present: o Zara, Intimissimi, Women's Secret, Camper, Catimini, Imaginarium, Yamamay, Zara Home, Boboli, Tuc Tuc, Gant, IKKS, Cortefiel, Maje, Mango Touch, El Ganso, Vodafone, Fosco, Orchestra, Carpisa - New entrants o M.A.C.. Merlkal Calzados,Soloio, Benetton, Thomas Sabo, Pangea, La Bela Mafia, Pikolinos - (Travers, R., 2017).

- Figure 20: Shops at Rambla Catalunya Las Ramblas - Las Ramblas is located in lengthening of the commercial areas at Placa Catalunya and directs pedestrians towards the Barcelona harbour. The

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streets popularity is moreover owing to the flower shops, artisans, human statues, theatres and museums. Additionally, several retailers such as Desigual, H&M, Mango, Nike, Springfield, Starbucks and Burger King have found their way to occupy major spaces throughout the boulevard.

- (Travers, R., 2017).

- Figure 21: Shops at La Rambla.

Placa Catalunya - The centre of Barcelona’s commercial area that connects the majority of commercial streets. One of the most important department stores is located on Placa Catalunya, by the name El Corte Ingles. The placa functions as a meeting point for both locals and tourists as it connects the Eixample district with the old town district and has a high and constant pedestrians flow. This is mainly due to the collision of the main commercial streets and as the placa houses various types of transportation across the city with certain focus towards the airport.

- (Travers, R., 2017).

- Figure 22: Shops at Placa Catalunya.

Carrer de Pelai - Mass market - The street Pelai, is situated as a byway from Placa Catalunya to Placa Universidad and has less of a traditional tourist approach compared to Passeig de Gracia. For that reason, the street is more frequently visited by locals. Nevertheless, the commercial offering includes retail domination by Inditex, Mango and C&A. - Major retailers present: o C&A, Zara, Sephora, Mango, Celio*, Desigual, Camper, Fosco, Pull & Bear, Stradivarius - New entrants: o Parfois, Bershka, Natura, Multiópticas, Hema, l’Oréal - (Travers, R., 2017).

- Figure 23: Shops at Pelai.

Portaferrissa - Mass market, Trendy - Portaferrissa is located on the left side of Las Ramblas in the Gothic Quarter and runs between Portal de l’Angel and Las Ramblas.

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Pedestrians flow for these areas*

* average numbers per day as for May (2017) Figure 27 (Authors of TC Group Solutions, 2017, Tc-street.com) Rental rates for these areas*

* Average Prices in 2017* (in euros per square meter per year) according to Statista (Authors of statista, 2017,Statista.com).

Figure (26)

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Major retailers present: o H&M, New Yorker, Quicksilver, VANS, The Body Shop, Mango, Bershka, Springfield, Kiko, Jules, Misako, Intimissimi, Vans, Cup New entrants: o Primor, Aragaza, Aïta, JD Sport (Travers, R., 2017).

Figure 24: Shops at Portaferrissa.

Portal de l’Angel Passeig de Gracia Avenida Diagonal Rambla Catalunya o 54.389 pedestrians Las Ramblas Placa Catalunya o 16.184 pedestrians Carrer de Pelai Portaferrissa Portal de l’Angel o €3.360/m2/year Passeig de Gracia o €3.060/m2/year Avenida Diagonal o €840/m2/year Rambla Catalunya o €1.260/m2/year Las Ramblas o €1.260/m2/year Placa Catalunya o €1.260/m2/year Carrer de Pelai o €2.100/m2/year Portaferrissa o €1.980/m2/year

Figure 16: Traffic Index (Authors of TC-Group Solutions, 2017, Tc-street.com)

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Figure 17: Shops at Portal de l’Angel (17 retailers) + (6 services)

Figure 18: Shops at Passeig de Gracia (18 retailers) + (22 services) + (3 transport)

Figure 19: shops at Avenida Diagonal (18 retailers) + (2 transport) + (22 services)

Figure 20: shops at Rambla Catalunya (14 retailers) + (15 services)

Figure 21: shops at Las Ramblas (9 retailers) + (28 services) + (2 transport)

Figure 22: shops at Placa Catalunya (14 retailers) + (11 services) + (15 transport)

Figure 23: shops at carrer de Pelai (17 retailers) + (1 transport) + (6 services)

Figure 24: shops at Portaferrissa (19 retailers) + (3 services)

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Figure 26: Rental prices in 2017* (in euros per square meter per year) according to Statista (Authors of sta-tista, 2017, Statista.com.). “This statistic presents a ranking of prime retail street locations in Spain based on the cost of rent as of June 2017. Of the locations in Barcelona, Portal de L’Angel has the highest rental rate at 3,360 euros per square meter per year.”

Figure 27: Map over these areas & pedestrian flows (Travers, R., 2017) and (Authors of TCGroup Solutions, 2017, Tc-street.com)

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Exhibit 11.Commercial mix of Barcelona’s main commercial streets

Commercial mix of Barcelona main commercial streets General:

Main retailers and services: 1. Retailers

Notes: General overweight of retailers and restaurant and cafés.

Mass-market domination, here included a high level of fast-fashion retailers and millennial-orientated services. The Barcelona Meeting Point (BMP) stated that 2018 will focus on millennials and internationalisation of the commercial areas and real estate in Barcelona. This is already launched, as the opening of the concept café, ImaginCafe, is expected to be the new place for millennials in Barcelona (Authors of Plantastic, 2018, Plantastic, blog.ticketea.com).

The city is generally well connected in terms of transportation and walking possibilities, which all collide at Placa Catalunya as the city’s epicentre. This moreover pushes a high level of pedestrian flow at the centre and makes the placa one of the busiest areas of Barcelona. For the same reason, the placa is moreover one of the first points of arrival or departure for many tourists.

General division of commercial mix in % See Figure (28) - The numbers are found through a circa (specific numbers N/A online) calculation of different retailers and services in the following eight main commercial streets: Portal de l’Angel, Passeig de Gracia, Avenida Diagonal, Rambla Catalunya, Las Ramblas, Placa Catalunya, Pelai, Portaferrissa.

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2. Restaurant & Cafes

-

3. Transport

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Main domination of fast-fashion retailers such as the Inditex and H&M Group, while luxury retailers exclusively are located on Passeig de Gracia. Shopping centres and department stores moreover hold a strong commercial position in Barcelona. Of highest importance is, El Corte Inglés, located ten different places in the city.

Cafés and restaurants are mostly mixed with retail stores in the commercial streets, yet Figure (29), gives emphasis to key areas for Food & Beverage in Barcelona along with a description of the consumer profile connected to the given area (Travers, R., 2017).

Underground Busses (incl. Aerobus commuting between Placa Catalunya and the Airport) Bicycles (Rent of bicycles and Bicing) Taxi

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Figure 28: General weight of the commercial mix categories in Barcelona.

Figure 29: market overview on Food & Beverage in Barcelona (Travers, R., 2017)

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Exhibit 12. Expansion strategies

Key success factors for ASOS’ foregoing expansion 1. General

2. Warehousing and logistics

3. Existing and new markets

4. Product and service

5. Technology

Key success factors for future expansion

Expansion strategies

In 2017 Nick Beighton, founder and CEO of ASOS credited the growth in terms of both scale, reach and sales to the substantial investments made for improving website with visual search tools, Europe deliveries and distribution centers.

ASOS on took a gradual approach to international expansion and made shipments and deliveries internationally available from its UK website in 2006 and allowed ASOS to identify the potential markets.

ASOS has moreover been leading its expansion and growth strategies on customer insights from online traffic and following data streams outside the core market (UK). These measurements of already existing customer engagement were in 2010 used to open up new markets and pinpoint the following launch of local language ASOS websites in respectively French, German and American as the previous timeline indicates. This expansion came along the opening of two international offices in Sydney, Australia in 2012 and in Rochester, New York in 2013 to provide the company with an in-house understanding of the different local retail landscapes. 2013 broad along an adoption of a Chinese distribution centre and a Shanghai office, yet three years of critically adapting to Chinese market specifics and local regulations outweighed the opportunities as they significantly affected the business performance and caused ASOS to pull the plug on its Chinese operations (Alibhai, S. 2016).

Despite from expansion to new international markets ASOS expanded its product portfolio and offering by including specialist sizes for menswear (Tall, Plus size) along with the possibility to shop by occasion (Wedding, Workwear, Holiday, Going out-out, Festival, Spring) modified each season as offered in the women’s sections. Both sections have moreover adopted beauty and grooming additions. Additionally, this is a fine example of ASOS adopting to current social consumption trends.

Another point of expansion ASOS has experienced is its adoption of mobile solutions for purchase and payment since it introduced the mobile and tablet app in 2011.

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1. Boosting capacity through core and new markets

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-

-

2. Boosting capacity through warehousing and logistics

3. Boosting capacity through technology

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-

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A highly relevant success factor in ASOS’ expansion strategy is the company’s announcement to focus its strength in its core markets, UK, EU and US without stepping away from its international operations, but has recognised where continued push will come from. Despite ASOS recognising that the future momentum will remain in their core markets, previously research (See previous report on the distribution method e-commerce p.6-7) has shown a global economic growth shift from West towards Eastern and Southern domination causing ASOS to retrieve attention to Asian or Southern markets. The attention might not be directed towards China as the 2016 settlement presented a sales increase with 30% since the exit from the Chinese market (Authors of ASOS plc, 2016, ASOSplc.com). The success of the core markets does not insure additional success in new markets, nevertheless these might be profitable to test for further international expansion.

During 2018 ASOS plan to close to double the number of local language websites to thirteen, which will provide ASOS with coverage over the 200 markets to which it currently ships (Armstrong, A., 2017).

ASOS invest in the UK market being an important test bed for the company strategy, but will account for a much smaller piece of business as ASOS prepare for becoming a truly global business (Armstrong, A., 2017).

ASOS invested heavily in international pricing lowering prices for overseas customers as by 2017 sales overseas accounted for €1.3 billions (Armstrong, A., 2017).

As a part of ASOS major investment in its international expansion the company is expected by Autumn 2018 to invest more than €34.3 million in new warehouse facilities in Atlanta, Georgia, US and marks what they state as a “significant progression” on its plans for growth in the US. These actions come in line with the US delivering sales growth of 39% in the first financial year of 2017 and demonstrates the opportunities that lies ahead for further expansion within this core market (Dean, S. 2017).

ASOS states that 69% of its online traffic is generated from mobile devices, why they have a possibility to further solidify and incorporate convenient mobile solutions into their business model.

ASOS moreover aims to strengthen its power through technology and with its new agile technology platform it carries the ability to provide ASOS customers with microservice architecture paired with a native mobile experience.

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4. Boosting through product and service

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This will help ASOS to improved and enhanced transaction volume and fastness (Rigby, C. 2017).

ASOS will continue growing the business at a fast pace in order to take advantage of the global opportunity the market carries. In line with the consumer desire for a bridging of online and offline commerce (See previous report on the distribution method e-commerce p.6-7 & 1011) ASOS will benefit from the increasing interest towards online retail as the online fashion retail is said to grow with more than twice the rate of the overall apparel market (Rigby, C. 2017).

The further development of ASOS’ private label additionally will not stall, as it in 2017 accounted for 41% of all retail sales (Rigby, C. 2017).

ASOS ended 2017 with results of a 24% rise in customers (15.4 million customers) and website traffic.

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Exhibit 13. - Opportunities & threats

SWOT

OPPORTUNITIES

In line with ASOS focusing its expansion strategies in core markets (UK, US and EU), the company has a possibility to explore millennial-driven markets such as Barcelona, during popular seasons with high pedestrian flows.

More conscious social behaviour and consumption Improve market pattern allows ASOS for contivisibility and awareness nuous expansion of ASOS priamong competitors through vate-label by introducing new styadvertising in publications or blogs les and sizes to the recycled denim that appeal to the target audience or initiative to establish improved by investing in further sponsor- and brand-feel. offline events and collaborations.

Gradual adoption of omni-channel or model O2O2O1 approach to distribution, in order to meet the existing consumer trends.

Increase marketing investment in creating awareness on the CRS initiative (recycled denim). This might be done by opening a pop-up store in markets of interest.

Increase customer use of m-commerce solutions to push ASOS as more convenient and by-hand of all times. This might be done through a customer reward-orientated sales strategy (ASOS A-LIST) in order to drive further customer conversions.

THREATS

Economic uncertainty, yet this can be turned into a possibility by offering free shipping, returns and lower product price points.

Due to increasing competition from a high level of pure e-commerce platforms entering the market, ASOS must continue to differentiate their products and services on ASOS.com

Competition threat from additional large retailers existing in both digital and physical form as they gain costumers through both channels. For the same reason, ASOS lack a high level of impulse purchase possibilities.

Lack of in-store- and omni-channel experience.

1. See previous report (CWK1) on the distribution method e-commerce

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