Using relevant strategic pathway concepts explain the reasons for the success and the outlook for the future. Company selected: ASOS
ASOS, an e-retail site launched in 2000, has now become the largest online fashion and beauty retail site in the United Kingdom. It offers a variety of products from designer brands, high street brands and also their own label.
ASOS has shone in the online retail sector in recent years. It has become the most visited fashion website on the planet for 15-34 years old. Despite the financial crisis, its sales in 2011/12 has grown nine times greater than that was in 2008/09, i.e. from £32.2m to £287.5m when other high street brands were struggling to survive. (ASOS PLC, 2012)
Since ASOS has achieved remarkable market performances in a short period of time, it must possess superior customer value with a clear value proposition.
Hence, I would focus on discussing the customer value strategy and positioning concept in the strategic pathway to analyse the reasons behind its successful market performances as well as its outlook for the future in my essay. What is strategic pathway?
Strategic pathway refers to an idea to test whether a company owns a market strategy or not. It evaluates the learning capabilities of a company in making strategic choices and whether it can create new ways to enter a market with real competitive advantages. (Piercy, 2009)
Sources of superior customer value
Apart from having a quality internal management structure to build a strong company, due to the increasing customer power, it is crucial to focus on customer value creation.
ASOS initially started with offering designer brand products only, yet it realized the majority of customers shopped for mainstream fashion trends. With its maiden profit in 2004, ASOS extended its skills of capturing latest fashion trends and capability in sourcing fashion products; therefore it eventually launched their own label – ASOS in 2004. Their products aim to offer inexpensive yet trendy items for customers. (Marketline, 2012)
In terms of organizational processes, it is crucial to do what customers want but not to do something that is convenient for the firm. (Piercy, 2009) Due to technological advancements, free shipping has become a mainstream service and which customers started to expect it. Research showed that 77% of the online shoppers would purchase more when free shipping was offered.
(Compete, 2011) ASOS noticed this trend and has offered global free shipping since 2011. Not only free delivery, it also offered free returns in the UK,
Germany and France. (Marketline, 2012) Though delivery receipt dropped
18% due to the implementation of global free shipping, it has brought a 63% growth in sales in 2012 with higher order frequency and more average items per checkout. (ASOS PLC, 2012)
As for commitment and services, it is essential for a firm to maintain as this is the aspect whether customers decide to re-visit the company or not, in which
ASOS has put much focus on its after-sale services. ASOS understands the quality of services is the most important element when customers value their performance which they allow customers to get full refund when goods are returned within 14 days. (ASOS, 2012) Also, in order to improve their quality of services, a ‘returns form’ is attached in each parcel they sent. Indeed, ASOS has recently achieved highest overall customer satisfaction which has won against the reputable online retailer, Amazon. (Institute of Consumer Service,
ASOS aims to enhance the level of customer care by bringing in new innovations and change processes. As ASOS heavily relies on international carriers systems to monitor all the orders dispatched, which it used to have five different carriers to handle all