Why invest in ASOS?
Our vision is to be the go-to destination for fashion-loving 20-somethings and doing 20-something fashion better than anyone else is what we are about. Our customer base is more fashion engaged and spends more of their wallet on fashion than other segments. Capitalising on this and our strong order economics, we aim to deliver £7bn of sales in the medium term , with >4% EBIT margin. We’ll deliver this by leveraging our platforms & capabilities, doubling down on our winning offer & localising our offer.
We see a large opportunity to increase our current market share from 1% of our total addressable market as the shift to online continues and through our execution of our strategy, enabling us to reach our long term EBIT margin ambitions of >8%
We are fashion creators, with c.40% of retail sales derived from our own brand sales. We have developed 17 brands that appeal to and meet the needs of the fashion loving 20-something market and our brands cater to all our customers style and price point needs. This puts us in a unique position to develop our future ambition of growing our own brands by £1bn in the medium term
Combined with our 17 exclusive own brands, we offer customers a curated edit of over 850+ partner brands, offering the most relevant brands to our fashion loving 20-somethings customers. We have grown our Face + Body and Sportswear offerings, which are core strategic priorities for ASOS.
Our customer demographic spends more of their wallet on fashion than other segments. Customers retained in each cohort spend more with us each year and the total value of the cohort increases over time driven by incremental spend from our retained customers
The more customers engage with our offer the more valuable they become
Many consumers discover ASOS through our own brands with 60% of new customers having an own brand product in their basket. For many customers, this is just the start of the journey. Many customers next step is to add partner brands to their baskets, and shoppers who do this have even stronger economics with increases in all key metrics - with their average annual spend increasing nearly 4-fold
Many consumers who’ve loved this experience take the next step and sign up for Premier – these customers exponentially increase in value – spending 2.5x more and 83% of these customers are retained.
For these premier customers, the next step is shopping Face +Body, and in time in other categories. For them, ASOS is their go-to destination and they return to ASOS at least once a fortnight to make a purchase with 96% retention – meaning nearly 100% of these customers will place an order on ASOS in the following financial year. This customer journey shows us that the more customers engage with more of our model, the better it works for our customers and the better it is for us.
Fashion with Integrity
Our Fashion with Integrity principles are non-negotiable and underpin everything we do
Running through every part of our business is our commitment to sustainability. Our Fashion with Integrity programme guides our approach and since 2010 has been our way of moving our business forward in a more responsible and sustainable way.
We have four goals which will shape the next steps in our sustainability mission:
Our Fashion with Integrity programme means that we will be net zero by 2030 and ensure all of our products are made from more sustainable or recycled materials.
We will also be a more diverse organisation and have achieved full transparency in our supply chain.
These principles underpin all the other commitments and targets that are set across the organisation.
Levers to accelerate future growth and margins
In order to accelerate growth and margins, we have 3 focus areas which will enable us to achieve this:
- We will leverage our platform and capabilities – driving greater product choice and evolving our capabilities to ensure greater executional ability, through the expansion of our Flexible Fulfilment Programme to encompass the launch of Partner Fulfils and ASOS services, improving our core customer proposition, evolving our marketing capability, leveraging our premier offer and driving operational excellence
- We will double down on our winning offer and by doubling down on our fashion credibility, strategic category expansion and brand partnerships.
- We will truly localise our offer and invest in marketing to win in our most important markets which is critical for the next phase of our growth, through leveraging infrastructure, localising assortment, and increasing marketing investment.
Our ambition is to be the go-to destination for fashion-loving 20somethings globally, and in the medium term we aim to deliver £7bn of sales with a >4% EBIT margin and capex spend of £200m-£250m per annum.
Through leveraging our platform & capabilities, c5% of GMV will come from our partner platform in the medium term. Doubling down on our winning offer will drive an additional £1bn of own brand sales; and through localising our assortment and increased marketing investment we will double the size of our US and EU sales.
Our warehouse network includes 4 fulfilment centres and 5 returns centres. Our Barnsley and Eurohub warehouses are fully automated. We launched our fourth fulfilment centre in Lichfield this year and our Lichfield and Atlanta warehouses will be automated by the end of 2023 financial year. Our warehouse & logistics network enables us provide next day delivery to 85% of our global customers.
As well as our distribution centres, we have 5 returns processing centres and have over 200,000 click and collect and returns locations, which provide for a quick delivery and returns experience.