Can Asos blaze a trail in personalising online retail?

Asos is dialling up personalisation on its site. If it is successful it will become one of the first mass market fashion retailers to fully customise the online shopping experience and attract the envious eyes of rivals.

Asos is dialling up personalisation to boost sales growth.
Asos is dialling up personalisation to boost sales growth.

Personalisation is a growing trend in marketing, with brands from McDonald’s to Pernod Ricard and William Hill making pushes to make their offerings more relevant to customers. However retail is lagging. A recent survey from BloomReach found that just 3 out of 122 UK ecommerce brands questioned thought personalisation was important.

Supermarkets including Sainsbury’s and Nectar have been making use of loyalty data to offer personalisation promotions while Amazon offers a recommendations service, but other retailers have been slower to make the move.

However, Asos chief executive Nick Robertson believes he has seen a shift in online shopping habits over the past couple of years. Where once consumers were happy to trawl through thousands of products to find the right one, now they want to be shown an “edited” version that shows products relevant to them.

“The novelty of browsing is starting to wane. Our customer base needs and wants inspiration,” he said, speaking on a conference call yesterday (21 October).

To meet that demand, Asos has launched an “As Seen On Me” feature that allows shoppers to share their purchases and outfits. Customers can also follow stylists who “flush up” new products, doing Asos’ job for it.

Later this year, Asos plans to roll out recommendations and personalised product ideas based on previous browsing and shopping behaviour. It has also finished a 6-month trial of its loyalty scheme and is looking at how to take that forward.

Differentiation by personalisation

For Asos, getting more personal isn’t just about meeting consumer demand it’s about staying ahead of rivals and being seen as an ecommerce leader. Its website is its only shop window, it therefore has to be the best.

“Asos needs to be seen as a leader in its field, which means continually investing in new ways of retailing and reaching out to customers. This is definitely an area that ecommerce players such as Asos need to innovate in. Consumers appreciate being treated as individuals and it helps Asos compete online in a way that usually gives bricks-and-mortar retailers and advantage,” says Couttigane.

Previously Asos’ relied on its content strategy and logistics to differentiate. It was was one of the first retailers to understand the importance of having content to accompany its products to help tell the story of the Asos brand and what it sold.

However other major retailers are now buying into this idea. The revamp of Marks & Spencer’s website earlier this year included a big focus on content while Selfridge’s newly launched site has a greater editorial focus and it has hired an editor-in-chief.

It is a similar story in logistics, where once Asos was cutting edge, others are now catching up. Asos currently offers next-day delivery with a 10pm cut-off but this is matched by retailers such as Next and beaten by House of Fraser, which offers a midnight cut-off for deliveries the following evening.

Rival pureplay ecommerce retailers have also improved their logistics. Boohoo offers a 9pm cut-off for next-day deliveries and is plotting more Sunday deliveries. It also has plans to use Collect+ to enable shoppers to pick up and return items via a local store.

The challenges

Conlumino senior fashion analyst Anusha Couttigane says that, bearing in mind how much data Asos has on its customers, it is surprising it hasn’t launched recommendation already, especially as its email marketing and promotions are tailored to certain audience segments.

“Personalisation is much harder to replicate on a mass market level when you’re operating chiefly in the apparel industry.”

Anusha Couttigane

However, she says introducing the feature onto the site has the potential to backfire if customers disagree with the recommendations.

“[Customers] could come to believe that Asos has limited understanding of their needs. As they say, the proof of the pudding is in the eating. If the Asos model works and recommendations are on point this will solidify confidence in Asos’ fashion credentials – and fashionable perceptions are critical to Asos,” she adds.

There is also the question of cost. Developing new technology can be expensive in the short term, especially if done in-house as Asos has done.

Asos’ profits have already taken a hit, down 14 per cent in the year to the end of August.

“Personalisation is much harder to replicate on a mass market level when you’re operating chiefly in the apparel industry. It’s a forward thinking move by Asos but also a cost intensive strategy for a company whose profits are already under pressure,” she adds.

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