Asos full year profits edge up as Beighton hots up international focus

Asos is betting on eCommerce expansion in France and Germany, as the e-tailer ploughs investment into Europe.

Beighton, who took over as CEO from founder Nick Robertson at the beginning of September, said the Asos strategy would not change under his leadership.

"The strategy remains the same, that won't change. We won't change our internally-led brand virtues and we won't change the culture," Beighton said this morning. "But you'll see a greater focus on execution and international strategy from me."

Asos today reported a 1% increase in full year profits to £47.5 million. For its year to 31 August 2015, the online fashion retailer also reported a 17% increase in retail sales to £1.1 billion, while UK sales increased 27% to £473.8 million, compared to an 11% increase in international sales, standing at £646.1 million.

Beighton's "tighter focus" on the Asos international strategy will begin with efforts ploughed into France and Germany.

"I will be focussing on the Eurozone, particularly France and Germany and the third focus will be on the US," he said. "That’s where I'll be focussing the majority of my effort and the majority of our investments."

Beighton said the reason for the focus on France and Germany is because its eCommerce penetration is accelerating at a greater rate than the UK. Asos is planning on introducing a Barnsley-style warehouse in Germany, which will be able to handle up to 20 million units of stock and next day delivery up to midnight.

"We think those markets will be extremely exciting for us over the next three to five years," he said.

Meanwhile, Beighton said China is still in start-up mode. "We're planting seeds for future growth, so China will be getting an awful lot of attention too, but it's still very early doors in our China investment."

Customer loyalty

Meanwhile, Beighton said Asos will be launching its loyalty scheme in the UK over the next six months. The e-tailer has been trialling a scheme on a few hundred thousands customers over the last half year, whereby shoppers are rewarded for their engagement.

Beighton said that engagement could be through social media or posting a selfie through the retailer's '#AsSeenOnMe' online tool.

"It rewards total loyalty," Beighton said, explaining customers would receive basket and delivery incentives. "We're saying, 'see this beautiful proposition we have, come and get involved and we will reward you accordingly'."

Over the last year, Asos has seen growth in average order frequency and average basket size, while the e-tailer now has 9.9 million active customers, which is an increase of 13% over the year. 

New search functionalities

Over the last 12 months, Asos has also invested in search and personalisation technologies which, Beighton said, are "bringing back great results".

Beighton said making Asos more personalised, relevant and providing a more friendly service for customers will be key to the business going forward.

The Asos ‘new in and recommendation app’ was built in-house over the last 12 months and is "totally unique to us and totally mobile", he said, while noting that nearly 60% of all Asos traffic now comes from mobile devices and 44% of orders are placed via mobile.

Beighton said the app is based on a customer's purchasing and browsing history and the technology makes 55 billion calculations in a mere 200 milliseconds to produce up to 1,000 personal recommendations.

"It’s a very nice piece of technology and one of those things where the more you interact with us, the greater you use it, the more the algorithm works for you and becomes more intuitive," he explained.

He plans for this technology to be also rolled out to the US over the next year, as Asos plans to introduce more new products into the market, along with investment into social media and customer experience.