It’s great to see some positive news from a retail business this morning. OK, so it’s Asos and some might say that online success is exactly the point – that traditional retail cannot hack it in the modern market. This misses the point.
In my opinion, the biggest problems faced by troubled retailers today are of their own making. They are the legacies of ill-conceived growth, achieved without understanding the consequences. Most of these ailing businesses have too many stores, over-sized stores, too many SKUs, too many customers…yes, there are some customers you don’t want because of the costs attached to serving them. This has led to the plethora of distressed retailers today who don’t know what and who they are, so neither do their customers.
Asos happens to be a digital retailer but on its own, tech is only ever a means to an end. It’s a conduit for the offer. And the Asos offer and how it is put together and managed is why today’s results are so strong. Asos is first and foremost an outstanding retailer – it happens to trade online. The business understands exactly what it is and refuses to dilute that by chasing incremental growth from beyond. It is focused at young fashion for twenty-somethings. It will neither stray far beyond that in other markets (so no homewares – a graveyard for so many fashion brands) or customers. While it does lots of business with older shoppers, it is not trying to chase them with dedicated older looks.
For as long as retail distress attracts focus on the symptoms and ignores the root causes, those companies are on borrowed time. If these businesses had no stores and the latest tech, their offers would still be irrelevant and competitively weak. A well-run, focused player like Asos can win huge chunks of market share, and there’s plenty more to come.
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