Over the last few years, the clothing market has seen some major ups and downs. With online retailers gaining prescience over high street outlets, businesses like ASOS have seen benefits from the closure of physical stores that has been difficult for traditional businesses to manage. Here, we explore what online retailers can learn from this success, and what this means for store-based clothing retail.
Standing Out From the Online Crowd
ASOS began in 2000 as As Seen on Screen, a marketplace where shoppers could find the same garments worn by their favourite celebrities on TV. In 2002, they shortened their name to the acronym ASOS and launched their first own-brand womenswear two years later.
Years later, in 2022, ASOS has seen purchases from more than a tenth of those who took part in Mintel’s survey. This is more than ASOS competitor brands like Shein, Zara, and New Look, all of which have captured the fashion zeitgeist effectively. This exceptional performance indicates that ASOS has effectively distinguished itself in the competitive fashion landscape, successfully capturing the attention of online shoppers.
A change in consumer behaviour is evident between 2019 and 2022, where the percentage of shoppers using in-store retailers declined from almost 9 out of 10 to less than 7 out of 10. Along with some uplift in shoppers using online-only retailers at this time, it is clear that online is taking over from in-store high-street retail as the preferred way of purchasing clothing.
Agility Through Difficult Times
During the COVID-19 pandemic, ASOS proved itself agile enough to rapidly pivot from one category to another, adding more leisurewear items at the expense of occasionwear in response to a major change in consumer lifestyles. ASOS stands out from its rival pureplays as being the most trusted online-only clothing retailer, as our 2022 Clothing Retail Report suggests. As a result of their innovations, in the 2020 survey of 15 clothing brands, ASOS was the one that consumers rated most highly as an excellent experience and that they would most recommend.
In recent years, the cost of living crisis in the UK has also proven tricky for retailers to traverse. ASOS’ introduction of their ASYOU clothing range aimed to capture young shoppers hoping to find well-made, fashion-forward, but budget-friendly clothing options online. Originally launched at the end of 2020 with garments priced under £28, the prices now have slightly increased but still offer young people stylish wardrobe pieces for inexpensive prices.
Moving to New Methods
Though you won’t find any permanent stores in shopping centres or on the high street, ASOS took a unique approach just ahead of their annual Black Friday and Cyber Monday sales in 2022 when they launched an experiential marketing push. ASOS installed four pop-ups in major cities around the UK where shoppers could play arcade games for the chance to win ASOS gift cards. As well as the arcade games, they handed out free tote bags and had a coffee shop to enjoy. This particular marketing event is typical of ASOS’ appeal to younger consumers who prefer to shop online and whose attention is captured more effectively by unique, experiential marketing tactics. ASOS may be online-only, but their marketing is not.
The Key Takeaway for Retailers
ASOS’ success highlights the importance for retailers to be agile in times of uncertainty in order to adapt to changing consumer shopping behaviour. As newness becomes less important, retailers need to focus on investing in the right products that their customers want. This will help protect their margins, as well as diminish the need for constant and deep discounting to get rid of unsold stock. The pureplay has also demonstrated how imperative it is for all fashion retailers to invest in their online operations and in innovative technology such as digital fit tools in order to improve the customer experience and convert browsers into loyal shoppers.
What Does This Mean for Store-Based Clothing Retail?
While most generations currently favour buying clothes online, a significant proportion have also bought clothes in-store. Younger generations including Gen Z and Younger Millennials, who are the keenest online clothes buyers, also visited clothing stores the most in the period immediately after lockdowns. This highlights that despite the shift online, stores still have an important role to play. The future of fashion retail will require retailers and brands to focus on connecting online and offline in order to create a seamless experience for the customer.
Mintel’s leading experts have conducted independent consumer research to identify the latest trends and growth opportunities happening across the fashion industry market. Explore our Fashion Market Research, or fill out the form below to sign up to Spotlight, Mintel’s free newsletter for exclusive insights.
