Word from the industry’s mouth

Technology

Technology and fashion have been partners in the ASOS journey. What opportunities do you see for increased personalization of the shopping experience through emerging technology?

As an online fashion retailer, we’re constantly working to deliver the best possible experience for our customers. Our tech teams take a build/test/learn approach, which in practice means that as soon as we get our hands on some new technology – say Augmented Reality that puts models in customers’ living rooms – we’ll try to get it in front of the customer as quickly as possible to engage them with its application and help us determine where to go next.

That’s one of the more obvious ways we use technology to give our customers a new experience. The ways in which we apply AI and machine learning to deliver personalization are somewhat less visible, but, if anything, are more fundamental to how we operate because they’re present and switched on throughout the customer journey.

For the customer, it means that we showcase the products they are most interested in seeing, at the time they want to see them, whether that’s through a bespoke curated product range (My Edit) or through recommending similar products to ones that customers are already looking at. We have about 85,000 products on site at any one time, so surfacing the most relevant fashion for each customer in that way is a key tool for us to overcome any challenges with product discovery.

More recently, we’ve even been experimenting with a bespoke algorithm called Frank that looks at all of the products in one category, and orders them based on a customer’s preferences, without them even knowing. It means that they see the products that appeal to them at the top of the list, without the need for scrolling. That’s a better experience for the customer, but it also means they’re more likely to shop, so it’s better for us too. There’s lots of opportunity for us to further improve the experience for our customers in this way, so we’re excited to see where the future takes us.

Supply chain

COVID-19 placed significant pressures on supply chains across industries, what role has automation played for ASOS during this period, and do you see use increasing in the future?

Automation in our fulfilment centres has been critical to our continued operation and success during COVID-19. We took significant steps to reduce capacity in each of our fulfilment centres (we have centres in the UK, US and Germany) once COVID-19 hit to ensure we could continue to operate safely and in line with all social distancing measures. That reduction was only possible because of the significant level of automation we’ve already implemented in our sites. This is something that’s going to continue and which has always been our roadmap, because it unlocks a lot of efficiency for us, but also means our customers will get their orders as fast as they’ve come to expect from ASOS.

Sustainability

ASOS has been running its Third Party Brands program since 2018. What level of willingness do you see in the fashion industry for systemic change on sustainability and supply chain transparency, and what does ASOS see as its role in this?

We’ve been working closely with our third-party brand partners to try to encourage them all to sign up to the five minimum requirements that we expect brands to meet to be able to sell their product on ASOS. In the last few months, we’ve taken another look at that and have asked our brand partners that manufacture in the UK to sign up to a number of further steps, including publicly declaring their supply chains. We’ve done that because we think it’s what our customers expect of us, but also because it’s the right thing to do.

I’d argue that the appetite for change in the industry has always been there, at least for the last few years since the Rana Plaza disaster, but what might have been missing is that spirit of collaboration – where the younger players, who are perhaps less far along on their sustainability or ethical trade journeys or less engaged, can learn from those who have been working in this space for a while and have very robust strategies. As a hybrid retailer of our own products but also those from other brands, we very much see our role as the glue that can join those younger brands with ASOS and with other, more established players. We’ve hosted several workshops bringing together brands to foster collaboration, including one in September on UK manufacturing, and that’s something we’re going to continue into the future.

E-commerce model

ASOS has seen lower than expected product returns, even after lockdown restrictions in certain markets began to ease. What areas does the business focus on to optimise return rates?

A lot of the marked shift in returns behavior that we’ve seen recently is about the different products that people are purchasing now – so while in the past it might have been going-out wear, which has a naturally higher returns rate, it has now shifted towards loungewear and make-up, which tend to have inherently lower returns rates.

There’s also some steps that the business has been taking to reduce our returns rate more broadly. We’ve deliberately shifted our mindset so that we view each return as a poor customer experience: nobody wants to have to send back something they’ve bought. That has allowed us to really focus in on those areas that might be sticking points for customers – size and fit or product presentation, for example. On the former, we’ve done a lot of work with technology to ensure our customers get the right size, first time, for example by launching an AI-powered tool called Fit Assistant, which recommends sizes to our customers based on collated returns behavior and information on size and fit reported by other customers. We’re looking at delivering some further innovation in this area in the coming weeks, so watch this space.

Future trends

ASOS’s key demographic, 20-somethings, now faces an uncertain economic outlook, and brings new values to the table than those of the 20-something generation of five to ten years ago. How do you see this new generation of consumers shaping the fashion industry into the future?

There’s no question that this generation will be more discerning than ever before – they want to know that the brands they shop with are responsible, that they try to do the right thing, and that they stand for something.

ASOS ticks all those boxes, although sometimes we need to do a better job of letting our customers know that! It will be on all of us in the industry to ensure customers feel confident supporting fashion and continuing to shop, knowing that we’ve done the hard work for them, particularly when it comes to issues around sustainability.

Future trends

ASOS has talked about focusing on fashion as a force for good, what does that look like in a post-COVID-19 world?

COVID-19 has definitely changed the mindset of a lot of people. We knew from early on in the pandemic that it would be important for us to support the national effort and the communities in which we operate, so we put a lot of effort into doing all we can to help, whether that’s donating clothes to front-line workers, offering laptops to children in need close to our warehouse in Barnsley or donating funds to NHS Trusts through the sale of charity tees. Those trends are only going to accelerate, so it’s important for us that we continue to play a positive role in the communities within which we operate.

What keeps you awake at night?

From a CFO perspective the economic uncertainty of the current situation makes planning difficult for everyone, in particular the lifestyles of ASOS’s key consumer – 20-somethings – is likely to be disproportionately affected by COVID-19. Because of this, scenario planning is ongoing as we try to maintain a dynamic outlook. More broadly, the focus is on how the business continues to keep up with the pace of technological change, our ongoing evolution and next phases for growth.

What do you do to take time out?

I try to exercise as that makes a big difference to the day and we’re often at our best when that forms part of the daily routine. I’m also a big reader and find this a good way to switch off. I enjoy experimenting with different foods, and while we can’t really do it this year, I also like to travel, and socialise to the extent that we can at the moment.