Letting buyers pay only for items they keep proves a hit with young shoppers as sales rise to £300 million
The online fashion firm Asos has reported bumper Christmas sales as customers used its “try before you buy” service to turn their bedrooms into changing rooms.
The retailer’s UK sales climbed 23% to break through £300m in the last four months of 2017 as its legion of young shoppers headed to the site for party outfits and gifts.
The Asos chief executive, Nick Beighton, said the option for customers to pay only for items they keep rather than pay for an an entire order up front and then wait for a refund on returned items had helped it win sales in a challenging market. “Twentysomethings play their debit and credit card cashflows, so being able to try on fashion without being charged is a much better scenario for them.”
Clothing websites like Asos and Boohoo are winning market share from established high street retailers by tapping in to a generation of consumers who shop on their mobile phones and take their style cues from social media. At Boohoo sales doubled at Christmas, whereas sales fell at Marks & Spencer, the UK’s biggest clothing retailer, and rival Next managed only a small rise.
Asos’s UK sales climbed 23% to £300.9m while international sales soared 35% to £489.5m. Asos shares, which debuted at 20p in 2001, closed up 3% at £70.80. They have increased by a third over the last year, a gain that has seen it overtake the market value of the 134-year-old Marks & Spencer.
Beighton said Asos handled 20.2m orders over the four-month period, which was 30% up on 2016. Customers also spent 3% more per order.
Sofie Willmott, an analyst at GlobalData, said Asos stood out as of one of the biggest retail success stories of Christmas 2017. “Asos continues to streak ahead of its multichannel competitors. Its agility and willingness to adapt to changing shopping habits coupled with its confidence to invest in new initiatives are key contributors to its ongoing success.”
However, she added: “Though Asos is seemingly untouchable with double-digit UK growth the norm, the retailer must remain aware of smaller young fashion online pure plays such as Boohoo, Missguided and lesser-known brands like SilkFred and Missy Empire, who are creeping up and vying for a larger share of shopper spend.”
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Lead Image: Asos is winning market share from established high street retailers. Photograph: Christian Vierig/Getty Images