ASOS PLC. Business Research Project Laken Rae Howell
100th Issue of ASOS Magazine
ASOS Marketplace
Company Overview
ASOS PLC was established in London, England on June 3, 2000 by Nick Robertson and Quentin Griffiths.
In 2001, ASOS was admitted to the Alternative Investment Market of the London Stock Exchange.
ASOS is currently the UK’s largest online-only fashion retailer and has a significant and expanding presence in Europe, the United States, and Australia.
The business model is entirely dependent on its ecommerce capabilities. Next-day delivery and free returns are some of the services offered to eshoppers.
ASOS is combining the latest trends in fashion and advanced distribution with customer-friendly prices.
ASOS plc is a multiplatform company. The ASOS Foundation is a charitable trust funded by ASOS and supported by its colleagues and customers. ASOS Marketplace is an innovative online platform that allows small independent fashion lines/sellers to reach a much wider audience.
The mobile app is responsible for 70% of the organization’s global traffic and offers options such as visual searching and Apple Pay.
The company focuses on fashion as a force for good, inspiring young people to express their best selves and achieve amazing things. ASOS believes that fashion thrives on individuality and should be fun for everyone
Stock includes over 80,000 fashion labels as well as its own branded products in a full line of men’s and women’s apparel, shoes, beauty products, gifts, and accessories.
Slogan:
The mission at ASOS is to become the world’s #1 destination for fashion-loving 20-somethings.
discover fashion online. ASOS stands for As Seen On Screen.
Logo: • • • •
lowercase letters name of company Century Gothic font black and white
Chief Executive Officers Nick Beighton
Lucinda Greasley
Daniel Jenks
Gemma Robertson Colleen Last
Brian McBride
Andrew Magowan
Helen Ashton
•
Brian McBride is the chairman of the board of directors. Before joining ASOS, Brian was the UK managing director of Amazon.co.uk from 2006 to 2011.
•
Nick Beighton serves as CEO. He was formerly a chartered accountant in financial management for several other companies.
•
Lucinda Greasley, managing editor, has a team of editors, tech analysts, and producers. She was formerly working as managing editor for Easy Living magazine.
•
Gemma Robertson, Lead Talent Partner, is responsible for staffing the company. She was formerly employed by the London College of Fashion.
•
Daniel Jenks is the general manager in China. He has worked for ASOS for the last ten years. He has a background in finance.
•
Helen Ashton has served as chief financial officer at ASOS for three years. Before that, she was chief financial officer at Capquest Group Ltd.
•
Andrew Magowan has served as company secretary and legal counsel at ASOS for the last six years. In the past, he served as a corporate lawyer.
•
Colleen Last is the current chief sub-editor at ASOS. She’s worked for huge companies such as MTV UK and Microsoft.
Market Analysis
You can currently shop ASOS in over 200 markets, in 6 major global languages. Serving nearly every country in the world, ASOS reaches the e-commerce global market and even the mobile app audience. Because the company’s products are so widely accessible, the market extends much further than the standard in- store retail establishment. ASOS is ran out of London, England. Targeting middle-class people ages 16-34, emphasis is placed on social media marketing; ASOS has 7.6 million Instagram followers, as well as a constant presence on all other social media platforms, posts frequently, and works with influencers often to gain even more engagement. ASOS gives millennials what they want: sustainable fashion from a company that has a focus on giving back to the community and making a difference. With predictions of growth in e- commerce retail, ASOS has expanded and is well ready for the shift in customer preference. With such a large pool of markets within reach, ASOS is able to have a very specific target customer. Creatives, leaders, forward-thinkers: these are the kind of customers that the company markets to.
In which of the following online stores have you bought something in the past
Retail sales of ASOS worldwide in financial year ’14 to ‘17, by region
12 months? Please only think about the website, no matter if the company has stationary stores as well. amazon.com
(in 1,000 GBP)
76%
walmart.com
Retail sales of ASOS worldwide in financial year 2014 to 2017, by region (in
45%
kohls.com
30%
1,000 GBP) macys.com
800 000 698 200
Retail sales in thousand GBP
jcpenney.com
603 800
600 000
28% 22% 18%
oldnavy.com 544 100
victoriasecret.com
15%
473 884
nordstrom.com 400 000
12%
gap.com 293 983 261 600 256 385
11%
272 600
245 800 234 358 232 549
levi.com
179 200
200 000
9%
zulily.com
119 530 92 311
6%
landsend.com 0 United Kingdom
Additional Information: United States; September 15 to 18, 2017; 645 respondents; 18 to 69 years; respondents who purchase clothes on the internet
374 900
372 241
United States
2014
2015
European Union
2016
Source
Additional Information:
ASOS © Statista 2018
Worldwide; ASOS; Financial year 2014 to 2017*
5%
jockey.com
Rest of the world
2017
4%
qvc.com
3%
asos.com
3%
None of the above
4% 0%
10%
20%
30%
40%
50%
60%
Share of respondents Source
Additional Information:
Statista Survey © Statista 2018
United States; September 15 to 18, 2017; 645 respondents; 18 to 69 years; respondents who purchase clothes on the internet
70%
80%
P.E.S.T Analysis o Political factors that can affect the business include legislation regarding taxes on exports, international trade sanctions, and minimum wage laws. A global move towards free trade has a positive effect. Based in the UK, ASOS ships to over 200 countries. The political climate in the England is stable which makes for a good international market. o Economic factors that influence the company’s wellbeing include the overall health of the economy. Because the majority of sales come from the UK and the European Union, the well-being of these two economies in particular, greatly influence sales. Since the 2016 vote to leave the EU, Brexit causes the value of the pound to collapse to 30-year lows. Around two-thirds of ASOS' sales come from overseas and, as a result, it is able to take advantage of the weak pound.
$1.31 The price of the pound in dollars, rounded as of 10/7/18.
P.E.S.T Analysis Primary household shoppers who prefer to shop mainly via mobile, online or in-store in the Unites states as of February 2017, by age group 18-20
21-29
30-39
40-49
50-59
60+
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Share of respondents
Mobile
Online
In-Store
Sources
Additional Information:
Market Track ; eMarketer © Statista 2018
United States; Market Track ; February 2017; 1,200 respondents; 18 years and older
100%
110% 120%
o Sociocultural influences such as a generational shift in attitude regarding ethical business practices, sustainability in the fashion industry, and e-commerce shopping also play a significant role. The role of the Corporate Responsibility team is to ensure that the brand stays true to its motto, “fashion with integrity.” Targeting millennials, ASOS is paying close attention to the cultural habits and values of its market.
E-commerce share of total global retail sales from 2015 to 2021 20%
P.E.S.T Analysis
17.5%
18%
15.5%
Share of e-retail sales
16%
13.7%
14%
11.9% 12% 10.2% 10%
Retail e-commerce sales worldwide from 2014 to 2021 (in billion U.S. dollars) 6 000
8%
4 878
5 000
4 135 Sales in billion U.S. dollars
8.6% 7.4%
6% 2015
2016
2017
2018*
Sources
Additional Information:
eMarketer; Website (retailtechnews.com) Š Statista 2018
Worldwide; eMarketer; 2015 to 2017
2019*
2020*
2021*
4 000 3 453 3 000
2 842 2 304
2 000
1 845 1 548 1 336
1 000
0 2014
2015
2016
2017
Source
Additional Information:
eMarketer Š Statista 2018
Worldwide; eMarketer; 2014 to 2017
2018*
2019*
2020*
2021*
o Technology is the most obvious advancement in regard to the company’s online-only market. Without internet enabling international trade to become more accessible to the masses, ASOS would be out of business. In the future, e-commerce is predicted to grow. With younger generations becoming more immersed in technology on a daily basis, mobile shopping continues to gain popularity and ASOS is ahead of the game. Technology is also the basis for all marketing efforts at ASOS.
Horizontal Analysis ASOS PLC
Horizontal Analysis
Balance sheets for ASOS in the past three years displays a fall in stockholders’ equity, from 2015 to 2016; this was caused by the company’s 107% increase in liabilities. This increase in risk likely frightened potential investors. Despite all this, the company’s assets grew by 36% in 2016 and again in 2017 by 29%. This positive growth increased stockholders’ equity in 2017 by 43%.
2017
2015
50%
50%
50%
Operating Profit Margin
4%
4%
4%
The income statement history of ASOS is one of relative stability. Revenue is trending positively- up 26% in 2016 and again 33% in 2017. Net income fell 34% in 2016 but regained its positive momentum again in 2017, by increasing net profit by over 160%.
Net Profit Margin
3%
2%
3%
Return on Assets
8%
4%
8%
Analysis of the cash flow statements show the inflow and outflow of cash provided by, or used in operating activities, investing activities, and financing activities.
Return on Equity
22%
12%
16%
With a GPM of 50% for the last 3 years, the initial profitability of products sold by ASOS.com is remaining constant. The operating profit margin shows how well the business is being run on a daily basis. Because the EBITA is very low, expenses are high. The net profit margin tells how much of each dollar collected as revenue translates into profit. ASOS has an extremely low net profit margin. ASOS has more debt than equity so the debt to equity percentage is larger than 100%. The current ratio measures assets against current liabilities.
Debt to Equity
109%
202%
101%
Current Ratio
95%
100%
104%
Quick Ratio
35%
44%
60%
Gross Profit Margin
2016
Horizontal Analysis Income Statement
Balance Sheet
2500000
2015
2000000
1500000 2016 1000000
500000
2017
0 2017
2016 Revenue
Expenses
2015 Net Income
0%
10%
20%
30% Assets
40% Liabilites
50%
60%
70%
St ockholders Equity
80%
90%
100%
Horizontal Analysis
Cash Flow
Marketing Strategy Analysis ASOS PLC
Targeted Market Leading product categories among Millennials who used social media in the
Since then, because e-commerce allows ASOS to be accessible internationally, the marketing strategy has shifted towards more of a focused target customer – The unique, creative, forward thinkers of the millennial generation. Positioning itself as a platform to inspire you express your best self and to achieve greatness.
United Kingdom (UK) in 2017 20%
17.5% 16%
16%
15%
Share of respondents
“As Seen On Screen” is in reference to the celebrity inspired fashions that ASOS built its first marketing strategy around. After all, that was the vision of founders Quentin Griffith and Nick Robertson - a company that sold the outfits worn by celebrities.
14% 12%
12.5%
10%
10%
7.5% 6% 5%
2.5%
0% Electronics
Women's clothing
Beauty
Women's footwear
Source
Additional Information:
KPMG © Statista 2018
United Kingdom; November 2016 to January 2017; 1,476 respondents; KPMG employees.
Men's clothing
Sports & Travel Equipment
Brand Image ASOS generates a positive brand image by placing an emphasis on corporate responsibility.
Fashion with Integrity
ASOS founded the ASOS Foundation- provides infrastructure, training, and support to enable disadvantaged, young adults reach their potential, through focused projects in the UK, India, and Kenya. In addition, they work with partners including The Prince’s Trust, Centrepoint, Arrival Education in the UK, SOKO Community Trust, and Wildlife Works in rural Kenya, and Udavan Care in India. Sustainable efforts are being made. Ethical Trade partnerships are in place to help in overcoming many economical and ecological problems.
Brand Ambassadors Engagement rate of influencer posts on Instagram in the United Kingdom (UK)
ASOS is relying heavily on influencer marketing. The fashion industry has popularized influencer marketing. The idea is that within one click, viewing content is made available for purchase. This idea of ”fast-fashion” is likely a result of influencer marketing.
in the 1st half of 2018, by type Competition/giveaway
3.78%
Brand ambassador
3.36%
Product promotion
3.22%
Discount codes
3.2%
Brand promotion only
3.08%
Event promotion
2.68%
Product review
1.94%
Brand created content
1.91%
Content promotion
1.69%
Link to purchase
1.07% 0%
0.5%
1%
1.5%
2%
2.5%
Engagement rate Source
Additional Information:
CampaignDeus © Statista 2018
United Kingdom; January to June 2018; 4,600*
3%
3.5%
4%
4.5%
Social Media Presence #AsSeenOnASOS š ASOS is constantly coming up with new ways to get the customer engaged on social media. š ASOS has a strong presence on all of the most popular platforms including Facebook, Instagram, Twitter, etc.
Sales Promotion Discount sales can be a short-term marketing tactic used to motivate customers to shop. Usually take place around the end of each quarter.
Print Advertising ASOS magazine gives loyal customers something to look forward to with quarterly issues of high quality content. Normally not available for purchase, an exception was made in celebration of the magazines 100th issue.
ASOS Marketplace
o Brand extension of ASOS PLC. o Platform that allows independent brands & vintage boutiques to reach a much larger customer base.
Strengths
Multiplatform experience Over 80,000 different brands Own branded label Connects with customers regularly through social media Skilled workforce through training and learning programs
Number of visits to Asos.com via desktop and mobile web devices worldwide from April 2018 to September 2018 (jn millions) Apr 18
64%
May 18
64.4%
Jun 18
60%
Jul 18
58.4%
Aug 18
55.9%
Free shipping Strong brand image
Sep 18
53.8%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Number of visits in millions Source
Additional Information:
SimilarWeb © Statista 2018
United Kingdom; SimilarWeb; April 2018 to September 2018; desktop and mobile web device visits.
55%
60%
65%
70% 75%
Strengths
혳 Strong distribution network 혳 Focus on corporate responsibility 혳 High traffic 혳 Celebration of diversity and body positivity
Asos.com gives the customer the option to view a garment on their own unique body type. For example this, dress shown on three different body types to show a true fit and to encourage body positivity.
Weaknesses
Consumer attitude towards influencer marketing in the United Kingdom (UK) in 2018 I would actively avoid clicking an affiliate link to prevent an influencer from making a commission
48%
Influencers make too much money
Financial planning could use improvement Influencer marketing may not be effective Online-only so customers don’t get the option to try on merchandise before purchasing Little to no money is spent on advertising on a large marketing platform
29%
I have clicked through to buy a product or experience after seeing it featured by an influencer
23%
There is a lack of 'honesty' between influencers and their followers
21%
Blogs and social media should not be used to make money
14%
I am jealous of the lifestyle of influencers and their lack of a 'proper job'
9%
0%
10%
20%
30%
40%
Share of respondents that agreed Sources
Additional Information:
PerformanceIN; affilinet © Statista 2018
United Kingdom; affilinet; March 2018*; 2,300 respondents; 18 years and older
50%
60%
Opportunities Distribution of desktop traffic to Asos.com as of September 2018, by country
United Kingdom
Expand to new markets
24.82%
United States
New technologies allow for alternate methods of customer interaction
17.19%
Russia
Competition offers limited assortment in style
10.13%
Australia
Consumers continue to make purchases from mobile platforms
4.26%
Italy
3.28%
0%
2.5%
5%
7.5%
10%
12.5%
15%
17.5%
Share of traffic Source
Additional Information:
SimilarWeb © Statista 2018
United Kingdom; SimilarWeb; September 2018; desktop traffic
20%
22.5%
25% 27.5%
Threats
Economic uncertainty Competition continues to grow from expanding e-commerce industry Environmental regulations
Bibliography
ASOS. (n.d.). Retail sales of ASOS worldwide in financial year 2014 to 2017, by region (in 1,000 GBP). In Statista - The Statistics Portal. Retrieved October 8, 2018, from https://0www.statista.com.library.scad.edu/statistics/500739/asos-retail-sales-by-region-worldwide/. Discover Marketplace. (n.d.). Retrieved October 7, 2018, from https://marketplace.asos.com/ eMarketer. (n.d.). Primary household shoppers who prefer to shop mainly via mobile, online or in-store in the Unites states as of February 2017, by age group. In Statista - The Statistics Portal. Retrieved October 8, 2018, from https://0-www.statista.com.library.scad.edu/statistics/694894/primary-household-shoppers-channels-mobile-online-in-store-us-age/. eMarketer, & Website (retailtechnews.com). (n.d.). E-commerce share of total global retail sales from 2015 to 2021. In Statista - The Statistics Portal. Retrieved October 8, 2018, from https://0-www.statista.com.library.scad.edu/statistics/534123/e-commerce-share-of-retail-sales-worldwide/. Providing global data and insight on the retail technology sector. (n.d.). Retrieved September 20, 2018, from https://www.retailtechnews.com/ Research Topics. (n.d.). Retrieved September 20, 2018, from https://www.emarketer.com/ Statista. (n.d.). In which of the following online stores have you bought something in the past 12 months? Please only think about the website, no matter if the company has stationary stores as well.. In Statista - The Statistics Portal. Retrieved October 8, 2018, from https://0-www.statista.com.library.scad.edu/forecasts/786300/online-clothing-stores-us-consumersbought-in. The New York Times. (2016, August 17). How 'Brexit' Could Change Business in Britain. Retrieved October 8, 2018, from https://www.nytimes.com/interactive/2016/business/international/brexit-uk-what-happens-business.html (n.d.). Retrieved October 7, 2018, from https://app.avention.com/company/f5a423a6-d567-35ba-9d47-31ab04a0dd58#report/company_summaryOneSource
ASC.L Income Statement | ASOS PLC ORD 3.5P Stock. (2018, October 04). Retrieved October 4, 2018, from https://finance.yahoo.com/quote/ASC.L/financials?p=ASC.L ASOS. (n.d.). Annual revenue of ASOS worldwide from financial year 2012 to 2017 (in million GBP). In Statista - The Statistics Portal. Retrieved October 4, 2018, from https://www.statista.com/statistics/485103/asos-revenue-worldwide/. ASOS. (n.d.). Gross profit of ASOS worldwide from financial year 2012 to 2017 (in million GBP). In Statista - The Statistics Portal. Retrieved October 4, 2018, from https://www.statista.com/statistics/500692/asos-gross-profit-worldwide/. Investors. (n.d.). Retrieved October 4, 2018, from https://www.asosplc.com/investors Online shopping for the Latest Clothes & Fashion. (n.d.). Retrieved October 4, 2018, from https://us.asos.com/ Bowley, M. (2018, October 05). Top 50 online shopping sites you should shop now. Retrieved October 11, 2018, from https://www.finder.com/online-shopping Kantar Millward Brown. (n.d.). Brand value of the leading 10 apparel brands worldwide in 2018 (in million U.S. dollars). In Statista - The Statistics Portal. Retrieved October 10, 2018, from https://0www.statista.com.library.scad.edu/statistics/267931/brand-value-of-the-leading-10-apparel-brands-worldwide/. PerformanceIN. (n.d.). Consumer attitude towards influencer marketing in the United Kingdom (UK) in 2018. In Statista - The Statistics Portal. Retrieved October 10, 2018, from https://0www.statista.com.library.scad.edu/statistics/822171/influencer-marketing-consumer-attitude-in-the-uk/. Summit Media. (n.d.). League tables* of e-commerce retailers in the United Kingdom (UK) in 2018. In Statista - The Statistics Portal. Retrieved October 10, 2018, from https://0www.statista.com.library.scad.edu/statistics/882816/e-commerce-retailers-league-tables-uk/. CampaignDeus. (n.d.). Engagement rate of influencer posts on Instagram in the United Kingdom (UK) in the 1st half of 2018, by type. In Statista - The Statistics Portal. Retrieved October 10, 2018, from https://0-www.statista.com.library.scad.edu/statistics/895072/instagram-best-performing-influencer-posts-by-type-uk/. SimilarWeb. (n.d.). Distribution of desktop traffic to Asos.com as of September 2018, by country. In Statista - The Statistics Portal. Retrieved October 11, 2018, from https://0www.statista.com.library.scad.edu/statistics/922328/distribution-of-asos-website-traffic-by-country/.