Asos updates on turnaround strategy

The Asos staff were busy analysing this year’s Black Friday performance when Drapers visited its head office in Camden, north-west London on Monday, 3 December. A huge digital screen was showing sales figures by the hour and bestselling products in real time.

“Black Friday started strong and has gone really well. We have had good performance across the board, especially sportswear,” Wilson told Drapers. Asos recorded its best ever conversion rate for Black Friday of more than 9%. The Adidas Samba OG trainers in white were its bestseller by revenue during the weekend.

The business has been driving its “back to fashion” strategy since October 2022, which included clearing through old stock and cutting costs to make way for new products on shorter lead times.

Asos has since halved its inventory to £520m, with 80% of products on its website currently less than six months old. The new stock position has allowed the business to ramp up its Test and React programme – a model launched in early 2023 and centred around making small initial purchases before replenishing styles quickly based on customer reaction.

With a speed to market of less than three weeks, the retailer can capitalise on emerging trends such as burgundy and leopard print. Products from Test and React sit under its “most hyped” category on its website and app.

“It allows us to have a tighter inventory with less discounts and maximise the opportunities at the same time,” Wilson explained, adding that it won’t simply be re-ordering the same style, but also to “make tweaks” such as different colourways or fabrics.

The business plans to scale up Test and React from 10% of own-brand sales to 20% in FY25 and 30% in the medium term.

It is also doubling down on its brand partnerships, having added Arket, Cheap Monday, Mango Man and Veja to its brand portfolio this autumn.

Third-party labels account for around 60% of Asos's total revenue, with the remainder 40% coming from its in-house products, such as premium occasionwear division Asos Edition, activewear range Asos 4505 and Gen Z brand Collusion.

“We want to build more long-term engagement with customers,” Wilson said, “Asos’s USP has always been around styling. Customers that come to us usually have an occasion in mind but they want to be inspired.” The company is exploring a new loyalty programme and more brand events to engage with its customers.

It launched a “Buy The Look” feature in November 2023, with 2,600 new outfit combinations launching per week. The retailer said it recorded a 70% increase in average basket value when customers buy at least one product from the new feature. The retailer is working on bringing artificial intelligence into the styling function, which will provide customers with personalised outfit ideas.

Asos is also diversifying fulfilment options with third-party brands to complement its traditional wholesale model. In FY24, the retailer doubled the number of brands that ship directly from their warehouses to over 100, totalling for 5% of total third-party gross merchandise value. This includes Adidas, Dyson, Swarovski and Tommy Jeans.

In early next year, it will launch a fulfilment service which its brand partners can opt into, following a trial with Spanish menswear brand Scalpers in Europe this year. Asos will store and ship branded stock from its three distribution centres in Barnsley, UK, Berlin, Germany or Atlanta, US.