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Asos ramps up technology investment

Asos said it will continue its high level of investment in technology to improve its capabilities as it works towards achieving £4 billion of net sales.

Speaking during a media call following the announcement of its interim results 2018, CEO Nick Beighton said: “It has undoubtedly another strong trading performance. And we are particularly pleased with the results considering the high investment put into the organisation and the high level of change.”

The e-tailer stated capex will now sit between £230 million to £250 million in the current and following two financial years, investing the money in both infrastructure and technology to improve customer experience.

The online retail giant invested around half of its £95 million 2018 capex spend into technology and transformation programmes in the first half of the year, with the rest of the money spent on physical infrastructure in the supply chain and head office, including optimisation improvements to its Barnsley warehouse, extending Euro Hub and prepping for the early July launch of its new DC in Atlanta, US.

Beighton described how the online fashion retailer had completed 1,200 technology releases in the six month period, compared to 1,300 in the previous 12 months.

He also said the retailer will continue its artificial intelligence (AI) trials, which he believes will be a “game changer” to improve customer experience and lower the cost of how its business model operates.

Its interim results for the six months ending 28 February 2018 saw pre-tax profits grow 10% to £29.9 million, with group revenues climbing 27% to £1.16 billion. Nearly 30 million orders were placed over the period, an increase of 28% year-on-year and Asos also hit a billion site visits in a half-year period for the first time.

In fact, site visits increased 25% year-on-year with 80% of UK traffic now coming from mobile. Active customers were up 17% to 16.5 million, with an improved order frequency of 8%.

Heather Barson, director of retail and hospitality at Fujitsu UK and Ireland, noted: “Asos’ strong boost in sales is a great reminder of how retailers can do very well from a digital-first approach. There is an mounting pressure from consumers for retailers to maximise their digital offerings and Asos clearly recognises this demand, having invested - and having plans to further invest - in its technology and logistics to deliver a truly seamless and connected experience."

She said retailers should learn from Asos and its focus on providing convenient ways to shop online. But Barson said retailers shouldn't focus entirely online just because eCommerce giants like Asos are making waves in the industry.

“Bricks and mortar and online shouldn’t be rivals; the two approaches actually go hand in hand, if only retailers truly embrace digital – but only 50% of retailers appear to have a digital strategy in place," she said. "If retailers applied this to their whole multichannel offering, from the physical store to online to mobile, customers would be able to shop freely. This would build up that customer loyalty which is invaluable to any retailer.”

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