Today,  ASOS is best recognised as a leading online fashion retailer.

by James Ayling

Research Analyst

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It is seeking to become the leading digital destination for, primarily, young adult consumers to; discover the latest clothing trends, purchase effortlessly on mobile devices and, as every online clothing shopper wishes, return items hassle free if they don’t fit.

However, ASOS didn’t begin with online clothing in mind. Instead, back during its formative years ASOS, or rather, ‘As Seen On Screen’, adopted a more generalised vision to sell items online that had featured on TV. Nevertheless, a timely early pivot towards more focused online clothing retailing, whilst evidently challenging, has provided more enduring successes. Although the appeal of offline TV has diminished, this has been more than offset by a rising social media influencer scene that has driven a new wave of digital marketing through virality, providing a strong tailwind that has supported ASOS’ expansion. 

Yet, profitability has long remained an investor concern. During the COVID-19 pandemic, ASOS’ return rates reduced which helped improve 2020 profitability. Ahead, as lockdowns ease, I suspect return rates will re-normalise higher but do wonder if the accelerated online channel shift delivers more enduring profitability. 

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Spring Issue Thirty Four