Introduction
ASOS has developed greatly since its inception in year 2000. In its early years of operation, the online fashion store was dealing with products that had been inspired by celebrities such as ephemera and other design products (Alexander, 2010).
Adoption of growth strategy and launching of Marketplace in its website has significantly increased its potential. Moreover, its sales volume has also expanded overseas (Završnik, 2007). Over the years, ASOS online fashion business has grown tremendously. This has been attributed to its knowledge on consumer behaviour.
As an online company, it has been keen in identifying how groups or individual customers make decisions regarding their quantity of purchases and where to buy them from (Ashworth et al., 2006; Grant & Graeme, 2005; Walker, 2010).
Its current designing skills and competences have made the company to be a leading online fashion retailer in UK (Osarenkhoe, 2009; Walker, 2011). Besides, the online retailer employs efficient customer support and engagement, better presentation of its products and design choice. These are some of the strategies the company is applying in order to be ahead of its rivals like Harvey Nichole.
In addition, it has endeavoured to offer effective and efficient services to its customers. In its online site, it launches approximately 5000 new product lines each month, offers an equal number of own label styles and designer wear from collaboration with other fashion industries and independent designers (Evans, 2011; Osarenkhoe, 2009; Walker, 2010).
The company is continually seeking to maintain the quality its products to match the present fashion needs of customers. In order to achieve this strategy, the retailer is ensuring that its products are up-to-date and have vibrant life cycle (Nelson & Paek, 2006). The latter method puts into account the various stages which products go through. Depending on the choice, taste, preference and trends, products may exhibit ether short or long life cycles (Grant & Graeme, 2005).
The Nature Of Management Issue
The management at ASOS has put into consideration the need to understand the needs, behavioural variables and consumer characteristics to evaluate purchase decisions of its customers. The company has put in place serious consumer engagement through the use of blogs on a regular basis.
Moreover, ASOS Life forum has been instrumental in reaching out for both prospective and active customers. One of the merits of this form is that it allows consumer interaction especially on matters pertaining to the products of the company. In order to make it a long term strategic plan that can be achieved easily, the company has instituted plans that will rejuvenate its marketing skills.
For instance, increasing the attractiveness of its bran is one of the top priorities of the company. Various outreach channels such as forums, Frequently Asked Questions and blogs have been used to improve consumer interaction with the industry (Alexander, 2010; Lu, Karpova & Fiore, 2011).
These needs can be met through engagement of consumers in order to understand their feeling, beliefs, attitudes knowledge and motivation. Besides, the company is looking for other ways and means of understanding how psychographics, marketing mix, social class and culture can influence the behaviour of consumers.
However, the company has an advantage over its competitor Nichole Harvey in terms of making quick sales due to its lean profile (Ashworth et al., 2006; Murphy, R. 1998; Walker, 2010). Hence, its speed in response to changes in the market trend is high just as its ability to lose products that have lost fickle fashion demands (Dias, 2003).
Some of the research questions that will be used will include:
- Is ASOS a good example of online fashion business?
- What are the needs of the online fashion business?
- What online fashion business consumers expect?
- What are the weaknesses of the online fashion business? How to face it?
- What are the key success factors of the online fashion business?
This research proposal will seek to attain the following objectives at the end of the study:
- Identify both external and internal factors that influence fashion industry
- Identify ethical issues affecting the industry and its sustainability
- Identify the needs, strengths, weaknesses and unique selling strategies of the industry
SWOT analysis
Strengths
ASOS has continued to display its strength as the leading fashion retailer in UK. Althugh fashion trends keep changing and are shorter in life cycles, ASOS has always made brilliant sales since its products have longer life cycles (Ashworth et al., 2006; See appendix II).
This is normally achieved by a sequence that its clothing products go through and which include making products available to customers through website invitations. Its homepage offers links to new products and which receive heavy promotion (Grant & Graeme, 2005; Hagman & Polsa, 2011; Karise & Quinn, 2011; Marciniak & Bruce, 2004).
Additionally, the company has experienced rapid growth in terms of sales and profits for a considerably long period of time. It has expanded internationally with the aim of marketing itself using newly devised strategies. It has come up with a program that allows its customers to resell unwanted items through the new ASOS Marketplace (Barnes & Lea-Greenwood, 2010; Laohapensang, 2009; Walker, 2011; Završnik, 2007).
Moreover, the online retailer has captured the market by acquiring over 3.5 million registered users as well as introducing about1,300 new products on a weekly basis. To date, it owns slightly over 36,000 beauty, accessory and clothing lines (Alexander, 2010; Carrigan, Marinova & Szmigin, 2005; Dias, 2003; Evans, 2011).
ASOS has a large international market for selling its products. Hence, it is capable of clearing its stock in good time, extend its product life cycle as well as create new products (Grant & Graeme, 2005; Karise & Quinn, 2011; Lu, Karpova & Fiore, 2011).
The online retailer also makes its product information to be available to customers through promotions. It also develops buying pattern knowledge and demography for its customers through its customer relationship management prgram (Nelson & Paek, 2006; Završnik, 2007).
Weakness
ASOS weakness lies in the distribution sector that fails to meet the needs of the market (Dias, 2003; Gam, 2011; Murphy, 1998). This failure affects advocacy and loyalty of customers which is the main aim of engaging consumers. On the same note, heavy discount stock caused by distribution problem plays a key role in lowering gains in terms of profits (Osarenkhoe, 2009; Walker, 2011).
Additionally, the company faces low sales in some seasons forcing it to operate limited warehouses. The impact is that stocks go slowly and as a result profit making margin is relatively on the lower side (Hagman & Polsa, 2011).
Opportunities
ASOS intends to create a strong run of sales by allowing its independent and smaller designers to sell their products through the company’s website. Through its ASOS Marketplace initiative, it will increase traffic to its site by allowing customers to resell unwanted items through the site (Ashworth et al., 2006; Lu, Karpova & Fiore, 2011).
Moreover, ASOS intends to boost its performance by launching Fashion Finder, a new feature that will expand its market in oversees by allowing customers to search for both the brands in ASOS and those outside ASOS (Laohapensang, 2009; Marciniak & Bruce, 2004). This together with the language website it intends to launch will drive their sales further and increase the pace at which it sales its products (Karise & Quinn, 2011).
Threats
The Company faces a threat to its brand name being short-changed by a rival retailer in Germany (Barnes & Lea-Greenwood, 2010; Gam, 2011; Marciniak & Bruce, 2004). Anson intends to block ASOS from doing cloth sales in Germany through legal procedures.
The claim that the names of the two companies are almost similar is indeed a threat to a brand name that has captured the market (Carrigan, Marinova & Szmigin, 2005; Dias, 2003). According to the management at ASOS, this close similarity in brand name may cause confusion among customers.
Visual Analysis
Distribution in organization plays an important role in enhancing industry performance and sustaining competitive advantage (Nelson & Paek, 2006). The problem of distribution affecting ASOS can be tackled through organizing the functions of customer care, consumer engagement, transportation, inventory control and management initiatives (Alexander, 2010).
In consumer engagement, organized forums, FAQ’s, product review and advertising will help ASOS to effectively improve its distribution channel. Efficient and effective distribution system eliminates inventory, effort and time wastage. Customers’ needs are satisfactorily met when they receive their products in good time (Grant & Graeme, 2005; Holmlund, Hagman & Polsa, 2011; Laohapensang, 2009).
To achieve proper distribution, there is need to synchronize the industry’s supply chain with the demands of customers through functions such as distribution, procurement and production. Additionally, the problem can be mitigated when chain supply partners form a collaborative effort (Lu, Karpova & Fiore, 2011).
This will reduce stock-outs, lead time, costs, inventory levels, and conversely increase the accuracy of information and service to the customers (Ashworth et al., 2006; Nelson & Paek, 2006).
Theoretical Input
In order to answer the research questions, a fashion adoption theory will be used. It will be able to explain the ASOS business environment, its fashion influences to consumer needs, choice, decision making and use of products offered (Alexander, 2010). ASOS is a good company since it is aware of the current needs and expectations of its customers.
As a fashion designer, the company puts into consideration factors that motivate and caters for the needs of its customers such as physical profile, socioeconomic characteristics, sex and age (Barnes & Lea-Greenwood, 2010; Lu, Karpova & Fiore, 2011; Murphy, 1998). Additionally, in its decision making process, it is guided by social and psychological forces to influence fashion decisions that meet the demands in the market.
These forces include fashion marketing systems, socio-cultural developments, lifestyle, social influence, psychological identity and cognitive orientation (Hagman & Polsa, 2011; Karise & Quinn, 2011; Laohapensang, 2009; Walker, 2010).
Moreover, in choosing the best fashion for its customers, the company considers the perception customers have on certain products (Alexander, 2010; Ashworth et al., 2006; Barnes & Lea-Greenwood, 2010; Dias, 2003; Evans, 2011; Grant & Graeme, 2005).
It is important to understand that consumer perceptions tremendously affect their awareness on fashion. ASOS establishes the interest of the consumers, create awareness and identifies the decisions on evaluation and purchasing that they have (Walker, 2011).
Needs of an online fashion business
Most importantly, a good online business should be in a position to understand the degree of operation and interaction in order to meet the needs of consumers. To begin with, it is imperative to investigate and explore social issues that may potentially affect business operations alongside creating product awareness.
This direct influence on consumers when making purchases (McColl & Moore, 2011). Therefore, actions such as disposal, use, decision, alternative identification and evaluation need to be applied to meet the needs of consumers (Laohapensang, 2009; Murphy, 1998).
Online fashion businesses need to understand that some of the factors that influence the decisions of the consumers to adopt and purchase fashion products include desire to adjust to changes in the society, psychological and social needs (Marciniak & Bruce, 2004; Osarenkhoe, 2009; Walker, 2010).
To meet these needs, fashion leaders compete in developing new fashions, shop frequently, seek information related to fashion and use more money to buy clothes (Lu, Karpova & Fiore, 2011). Therefore, these leaders of fashion businesses need to access fashion information, be exposed to social forces and know how to time fashion adoption in order to meet the demands in the market (Carrigan, Marinova & Szmigin, 2005; Gam, 2011; Hagman & Polsa, 2011; McColl & Moore, 2011).
Also, knowledge of products will influence fashion businesses to increase their knowledge on EFC, adopt new methods and use this to their advantage in the market to motivate and encourage consumers in making purchasing decisions (Nelson & Paek, 2006).
Expectations of consumers
Today, the market place is filled with green products bearing in mind that consumers have been made aware of products and the environmental impacts they are associated with. Therefore, consumers seek products which favour them and would much willingly pay more to have green products (Evans, 2011; Gam, 2011; Grant & Graeme, 2005).
As a result, most fashion companies seek a friendly strategy that takes care of the environment. Consumers have also become environmentally conscious (Ashworth et al., 2006). One of the green imitative programs embraced by ASOS is environmentally friendly clothing (EFC).
It has been recognized as a need among fashion seekers since it does not only fit as a social component but it also satisfies basic human needs (Karise & Quinn, 2011; Laohapensang, 2009; Murphy, 1998; Nelson & Paek, 2006; Walker, 2010). Consumer needs are influenced by opinions, motivations and lifestyles.
They do recreational shopping and attend promotional events guided by the need to obtain a fashionable product that reflects their recreational and social identities (Marciniak & Bruce, 2004; Osarenkhoe, 2009). Additionally, consumers have interests to appear well and therefore this heightens their expectations in the fashion market to get a product that will satisfy their needs (McColl & Moore, 2011; Walker, 2011).
Secondary data
Secondary data will be obtained from two broad methods. These are:
- Quantitative
- Qualitative
Quantitative
This will comprise various data bases which contain information on online business and especially clothing retail business. Some of the resource materials for quantitative analysis of this research study will include published books, per reviewed journals, newspapers, magazines and credible websites.
Qualitative
Although empirical research is not the primary methodology for this study, observation, field notes, focus groups transcripts as well as structured and semi structured interviews will form the better part of secondary data and qualitative analysis.
- Information for this research will be gathered from secondary sources which will include books, journals and magazines.
- The researcher will use literature sources to examine other fashion industries, their characteristics, ongoing debates and challenges faced by similar business operations.
- Theories and strategies that have been used successfully in accordance with the literature will be examined and measured in relation to the operations of ASOS (Appendix I).
- A conceptual framework will be developed from the literature analysis on how to cope up with challenging fashion business issues and to balance operations of the business with customer demands.
The Value of the Project
The study has investigated and identified critical elements of performance within the context of fashion industry. Issues surrounding online fashion business like consumer engagement challenges, strengths and weaknesses and how to resolve the associated problems have been tackled.
Generally, the research study will provide a strategic approach to overcoming weaknesses in high performing firms such as Harvey Nicole (Holmlund, Hagman, & Polsa, 2011). The strategies that have been adopted in the literature review will potentially provide solutions to both the the value chain and in the operations of the Harvey Nicole designer fashion business.
Putting into consideration the needs, tastes and preferences of the customers through fashion labels places the fashion business at a position where it can make better sales and enjoy profits. Future studies should offer broader explanation on financial and operational measures that will give more understanding on the impacts in terms of success in performance and output.
It is also important to suggest that further research need to be conducted on descriptive study, annual sales volume and other characteristics of the business.
Timetable
Research timetable
References
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