Most ASOS orders are now made on mobile
ASOS announced strong full-year results yesterday with the group’s overall retail sales growing £291.5 million (A$467.2 million) to reach £1.4 billion (A$2.2 billion) for the financial year ending August 31, 2016.
The UK-based online fashion retailer increased operating profits to £63.0 million (A$200 million), compared to £46.1 million in the previous financial year.
Strong international sales contributed to ASOS’s overall growth. The retailer’s US sales were up 50 per cent to £179.2 million (A$287.3 million), thanks to investment in pricing and fulfilment, while EU sales increased 28 per cent. ASOS also saw a nine per cent jump in retail sales in the rest of the world, driven primarily by Russia and Australia.
The retailer’s customer engagement strategy has played a key role in its global brand success, helping it to remain top of mind among clothing and footwear shoppers in the fiercely competitive online market, according to Kate Ormond, senior analyst at Verdict Retail.
During the past year, ASOS tested new social formats, including Instagram Stories, Facebook Live Video and Snapchat filters, and launched local Snapchat channels in Australia, France and Germany. It also launched a new iOS mobile app that supported spotlight search and 3D touch for iPhone 6S users.
ASOS has made mobile a core part of its overall strategy, with the average customer shopping on the app eight times a month. Over 50 per cent of orders are now placed through its mobile platforms and 66 per cent of its traffic now comes from mobile devices.
ASOS said it plans to double investment in this area in the new financial year, delivering a number of initiatives to further improve customer engagement.
Ormond predicts the retailer will continue to outperform the UK online clothing and footwear market in 2016. “Given the strength of its product offer and planned range expansion into sportswear, loungewear and men’s big and tall, alongside well-placed investment in mobile, technology and logistics, further UK market share growth is inevitable in FY2016/17.”
The one dark spot in an otherwise upbeat earnings report was the retailer’s discontinuation of its in-country China operation, which incurred an operating loss before tax of £3.6 million ($A5.8 million) up to the point of closure in May 2016 (2015: £5.2 million) and one-off exceptional closure costs before tax of £6.5 million (A$10.4 million).