22 hours ago | By Sandra Halliday
Experience the leading provider of consumer foresight.
Jan 23, 2018
By WGSN Insider
As ASOS prepared to release its Christmas results, WGSN Barometer forecasted a strong performance from the retailer, well ahead of its performance in 2016.
Now the results are in and, as predicted, ASOS powered to high double-digit global sales, reporting a 30% (+28% currency neutral) jump in total sales to £808.4m for the Christmas/autumn four months ended December 31.
Here’s how we saw it coming.
As more companies release Christmas trading reports, it’s clear that online is emerging as the real differentiator between the winners and losers. E-commerce is retail’s new battleground and ASOS its current leader – a position that we predict is unlikely to change anytime soon, despite younger upstarts such as boohoo.com and Missguided coming to the forefront.
Using WGSN’s Barometer to monitor ASOS’ performance, we can see that the number of consumers claiming to have made a purchase increased significantly from the middle of December – almost trebling over the last six weeks. We can support this retail data from WGSN Instock, which shows the number of ASOS’ out-of-stocks have increased, indicating a higher year-on-year demand – something we expect to be reflected in its Christmas figures.
ASOS also clearly wins with the average amount spent on purchases. Currently 27% higher than its three fiercest competitors, a statistic we expect will continue to increase. High levels of innovation, relevant brand churn and strategic own brand range launches (including activewear and beauty) will build basket sizes and lift average spend levels; contributing to top line revenue and positioning ASOS strongly for the future.
The claimed frequency of purchase is comparatively similar across retailers, with Pretty Little Thing claiming slighter higher frequency of purchase. What makes ASOS a real retailer to watch is its continued investment in its product proposition and supply chain, ensuring it continues to push the right product at the right time – critical when catering to a young, fashion-driven customer base.
Operational improvements are also starting to filter through. Retail data from Instock shows ASOS appears to have gotten some of its old inventory issues under control – it is protecting margins on new products, while restocking fast sellers quicker – both measures that should reflect in its bottomline and profit margins.
In October last year, ASOS boss Nick Beighton revealed the business’ aim to reach £4bn net sales, saying that the retailer was readying itself for that growth. ASOS sales currently stand at £1.9bn, so to double that initially sounded like a tough ask. But looking at indicators from WGSN Barometer data, it appears to be a very realistic ambition.
WGSN’s Barometer is used to track public perception of retailers. It launched in March 2017. It interviews 350 nationally representative consumers every day, yielding 120,000 interviews a year.
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