Asos’s promo hangover
Marketing Week columnist Tom Roach coined the phrase “performance plateau” in an article we published last year. In short: “What got you where you are now, won’t get you where you want to go.” Several stories published this week speak to this. Both the consequences, and the necessity to rethink.
Into and out of lockdown, Asos was, seemingly, flying. Volume sales had been increasing, driving up revenue. Much of that, however, had been a result of promotional activity, at the expense of profit.
Asos reported a £87.4m loss this week. Supply chain issues and increased competition just two reasons, but another is the hangover from its previous, relentless focus on short-term promotional highs. The company’s CEO, José Antonio Ramos Calamonte, has identified the need to move away from an overreliance on performance marketing and focus on profitable growth backed by brand building activity.