ASOS.com: Nick Robertson
The online retailer's success is largely due to familiar and-tested business ideas, says Nick Robertson
The words ‘investment’ and ‘retail’ don’t really go together at the moment,” admits Nick Robertson, when I ask him if he has been approached by anyone looking to buy his growing business.
It is a fair point, but surely the chief executive of online fashion outlet ASOS would prefer his company to be viewed in its own right, rather than as part of a specific sector. Its market capitalisation is over £220m and its share price, so far, appears to be riding out the current retail downturn.
“If we keep compounding the sorts of rates we’ve been doing for the last few years, we are going to become a big business very quickly, and that’s our intention,” remarks Robertson.
Yet it seems remarkable that, until very recently, people were still questioning whether you could even sell goods such as clothes and jewellery online. “You need to be able to touch and feel them,” the critics argued.
“People forget that clothes and jewellery have been sold successfully in catalogues, by the likes of Littlewoods and Freemans, for the last 100 years,” Robertson says. “It wasn’t that people weren’t going to do it, but how much they were going to do it and whether it would pose a threat to traditional retail – those were the questions.”
Robertson isn’t ready to write the High Street off, but he knows the statistics are all in his favour. The former advertising executive has the youth demographic on his side and he knows its value. In fact, as far as demographics go, that’s the one to have.
“The generation that has grown up with the internet is very comfortable with shopping online,” he says. “This is really evident with the people who work at ASOS. A couple of years ago it was 50/50, but now they’re adamant they want to buy online.”
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Out of the flames
Universal broadband has, of course, helped the company improve its website and fuelled online retail in general. But the road to success has presented a few bumps and tricky bends to negotiate along the way.
Shortly after launch, the company’s whole future was placed in jeopardy when its warehouse in Hemel Hempstead was destroyed by the Buncefield oil depot explosion. About £5m of stock was lost in the December 2005 blast, and the company’s Christmas orders went up in smoke with it. Thankfully, ASOS had invested heavily in insurance and its risk-averse strategy saved the business.
Originally, the company sold replicas of clothes worn by movie stars. This focus has been gently realigned and is now geared towards fashion, albeit with a strong celebrity flavour.
“We’ve got rid of As Seen on Screen, we’re just ASOS now,” explains Robertson. “What we found in the early days was that fashion doesn’t have to have a film or celebrity connection. What we’re doing is what every magazine has done since the dawn of time, which is to put celebrities next to pictures of fashion.”
Indeed, the ASOS website looks like every Heat reader’s dream. Shoppers can view pictures of A-list celebrities, such as Lindsay Lohan, Kate Moss and Sienna Miller, wearing an item, and then purchase it fairly cheaply from the same page. “Celebrities have a better sense of fashion than most people,” says Robertson.
The range is the rage
The ASOS brand is now well known and a good deal of the company’s sales are of its own label. But also crucial to its appeal is its range of designer labels, which its young audience lusts after.
“We’re a bit of an anomaly really,” says Robertson. “We aren’t solely a brand and we aren’t a big fashion store either.”
He’s inspired by ‘category killers’, such as Amazon and Play.com, which offer a huge range of different goods negating the need for customers to shop elsewhere. ASOS’ stock is huge and is constantly being updated. Robertson says this is a key differentiator for the business.
“We’ve taken the inspiration from companies like Amazon and Play.com,” he says. “Instead of selling one brand we sell 300. We’re adding about 500 new lines each week.”
There are about 4,500 transactional fashion websites in the UK alone, so shoppers have more stores to choose from than ever before. However, Robertson argues that just because there are more outlets, it doesn’t mean people are going to go to greater numbers of them to buy. “You might buy a lot of different things but the number of places where you actually part with your money is very small,” he says. “It’s been said a thousand times, but I’ll say it again: the single biggest factor is convenience. It’s not about price, or those other things that people thought it was.”
In a cash-rich, but time-poor society, people want things and they want them to be a click away. Also, despite the growth of price checking sites, the main point of comparison for most isn’t between online retailers, but between the web and the High Street.
“If you’re sitting at your desk in an office in Slough and you want to buy clothes for the weekend, then your choice is somewhat limited,” says Robertson. “The internet has transformed that and on the High Street, the chains’ websites are growing much, much faster than their traditional stores. Now their customers from across the country are all filtered down one channel.”
Bringing in the big guns
As a fledgling site, there was no guarantee that the big brands would choose to allow ASOS to sell their stock. Fashion brands are always very particular about how their brand is portrayed and sold. Bringing in the brands has been a hard slog for ASOS, but as its momentum grew, more and more companies were attracted to the site.
“It’s a journey. In the early days we heard ‘no’ more than ‘yes’, but there has been a transition over the last few years,” explains Robertson. “Urban brands were about trying new urban ways of retailing, and because we are still unique, there’s still some of that, but it is about the way we present as well.”
Although ASOS is an online retailer, it is probably more accurate to describe it as a fashion business. Its Camden-based offices bear testament to this, packed with a mix of models, photographers, technical staff and racks of clothing. There are also two catwalks for photoshoots. Presentation is key to the business’ appeal. It also helps to explain why ASOS can sell the brands so well.
“We present their clothes better than they do themselves,” boasts Robertson. “They don’t generally have models and certainly don’t have catwalks. With broadband, we’ve been able to present better than traditional catalogues. If you are a retail brand then you put your product online. There are different types of websites and some are better than others. The problem is that technology is always evolving, so what you had last year can soon start looking out of date.”
Surprisingly, ASOS also has its own print magazine, published by Seven Squared, which is used to drive more sales. It’s sent to about 400,000 female customers a month and a men’s version has just been launched. Costs are mitigated by advertising revenue from the brands already featured on the ASOS site. “It doesn’t wash its own face, but there’s a contribution from the advertisers,” Robertson says.
Increasingly, web companies are looking for ways to be more targeted in their offerings, while users want greater levels of personalisation.
Plans are already underway at ASOS to offer users the clothes and accessories they like without having to search through its range. “We need to add in layers of personalisation – what brands and price points you like, for example,” says Robertson. “This can be a mixture of pull and push advertising. It’s what Amazon is doing and is borne out of having a massive inventory.”
International expansion is also on the cards, with Europe next up. However, Robertson expects operations to stay firmly rooted in the UK. Fashion in Europe has become normalised due to mass media titles like Glamour, so he reckons the jump is not so great.
Like any online business, the fate of ASOS is closely tied in with what occurs in web 2.0, 3.0 and beyond.
“The internet is evolving very quickly,” says Robertson. “All we can do is keep up with the changes and evolve with it,” he says. “We think that someone will dominate this online fashion space and we want it to be us.”