Asos reveals it has cut marketing spend by 16% as it continues to focus on lowering prices

British online fashion retailer Asos has continued its pledge to focus on reducing prices over a push on marketing, with spend down 16% to £26.4m for the six months ending 28 February 2015.

Asos is dialling up personalisation to boost sales growth.

Asos posted a 10% decline in first-half profit to £18m for the period, despite increasing group sales by 14% to £550.5m.

Even though it posted a fall in profits, the retailer, which issued three profit warnings last year, marginally beat analyst forecasts of £16.3m in pre-tax profits.

“Spend on international marketing campaigns was limited during the period whilst we focus on restoring the price competiveness of our products,” said Nick Robertson, Asos chief executive.

“Our digital marketing activities have however continued in order to drive awareness and grow our market share.”

Robertson said that earnings were hit by the roll out of Asos’ “zonal pricing” mechanism. The system will allow the business to adjust prices in each international market and utilise savings generated by renewed investments in its distribution network.

However, he insists that brand awareness is growing, with Asos’ websites attracting 88 million international visits during February 2015, up from 71m the previous year.

“Our customer engagement remains high, with growth in visits, average order frequency, average basket size and conversion all improving,” said Robertson.

“With our continued investment in our international price competitiveness gaining traction, momentum in the business is building. This gives us confidence in the outlook for the second half and that full year profit and margin will be in line with expectations.”

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