CEO: ‘Asos is ending the dominance of high street brands’

Asos CEO Nick Robertson believes ecommerce will reduce the dominance of big brands, levelling the playing field and allowing smaller labels to compete on an equal footing in the fashion market.

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Speaking at The Marketing Society’s Creativity for Commerce conference in London today (21 November), Robertson said that the importance of high street stores, which were once a big asset for retailers, is on the decline as shoppers increasingly head online.

“High street stores used to secure retailers x amount of sales. But now eyeballs are not going down the high street as frequently and they are going online. I can put a brand like River Island on Asos and I can put a brand like Needle and Threat, that no one has heard of, next to them.

“In the customer’s mind the asset that made the brand big, the high street, is not there anymore. That’s great news for smaller fashion labels, not so good news for big brands and their dominance will start to reduce.”

Nevertheless, Asos is keen to court the big retail brands, with Robertson claiming that his site can open up a new international market to British retailers.

“London is an amazing hotbed of young fast fashion. What ASOS has done is take what the UK is brilliant at, young fast fashion, put all those brands together in one place, like putting a roof over Oxford Street and then exported it.

“We are helping fashion brands go international at zero cost to them. A brand like River Island, which is phenomenally successful over here but has no business outside the UK, they come with us, and suddenly they are getting revenues from places they would never have been able to get to as a high street retailer,” he said.

One brand that Asos doesn’t have on board is Primark. The high street retailer undertook a very limited trial with Asos earlier in June, but ended it just three months later, insisting it had no further plans to move into ecommerce.

Robertson suggested the trial wasn’t successful because the two companies couldn’t make the venture profitable.

“We trialled with Primark. We tried to make it work [but] with a free shipping model if they only buy an item from Primark from us we are probably losing money. We are trying to make money in the process so it only works if they buy something from Primark and two other things so that the basket is three things. Then we can just about do it,” he said.

Robertson also ruled out Asos ever opening a physical store, calling the move “counterintuitive”. He said 30 per cent of the site’s traffic already comes from mobile and its customers buy up to 80 per cent of their fast fashion online.

The firm does have a presence in the physical world, however, publishing a monthly magazine showcasing the latest fashion trends and brands written by fashion journalists. Robertson said the magazine came about as one of the best ways to use marketing to represent Asos and what the brand stands for.

“The first pound of marketing an online business goes into delivery and returns and we spend £100m a year on making that free. The second pound goes into how best to represent Asos. So we use content: our emails, the fashion magazine, the mobile app.

“The convergence between retail and media, this is it. The business model for magazines that was advertising revenues is now clothes sales.”

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Tom Fishburne is founder of Marketoon Studios. Follow his work at marketoonist.com or on Twitter @tomfishburne See more of the Marketoonist here

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