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ASOS profits warning provokes retail fears

Tuesday 18 December 2018

DR GORDON Fletcher, retail expert from the University of Salford Business School comments on falling profits at online retailer ASOS.

Dr Fletcher said: “Today's profit warning and resulting plunge in ASOS's share price shows that e-commerce retailers cannot afford to rest on past success. The sole innovation in the original business model of e-commerce was to take the traditional retail form online. 

“The subsequent development of technology and newer business models means that further innovation is now needed. While online retail is a challenger to traditional high street brands this also does not make e-commerce immune from the rising power of the consumer or changeable weather conditions. Similarly e-commerce must deliver a strong customer experience that includes rapid, cheap and convenient delivery as well as a free returns policy. 

“More importantly, for ASOS, or any e-commerce brand, they should not expect to compete solely on price. There are too many online competitors in every sector to enjoy reasonable long-term success as a discounter. The fashion industry is not only a fickle and fast-moving sector it is also one not solely driven by price. 

“Perhaps it is time for ASOS to reflect on its origins. In 2000, AsSeenOnScreen offered consumers a particular focus and was a distinctive offering in what was an already crowded fashion market - how long ago that initial challenge to fashion and retail now appears.”

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Sam Wood

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