Asos’ six-month profits before tax have dropped 87 per cent. One reason for the massive dip could be the major investments the UK-based e-commerce retailer has made in new technology. Another reason for such a steep profit loss was the major price discounting over consecutive quarters, as more competitors gain market share. Because the brand has continually had to discount products to remain competitive, it is tricky to move away from that. An additional factor that will affect Asos’ future success is its new extended return policy. Earlier this year, the brand shifted the policy from 28 days to 45.
Asos is spending on new technologies, like artificial intelligence, new marketing strategies, technology platforms and infrastructure, and focusing on growth in the US. Current areas of focus include reducing prices and refocusing the marketing strategy. However Asos’ total sales grew by 14 per cent and overall retail sales grew 13 per cent from the previous year. And unlike a lot of other fast-fashion companies, Asos has its marketplace, all these third-party brands, its own products, it has beauty. The brand has diversified its offerings, unlike a lot of other fast fashion brands that have just focused on cheap items and breadth of assortment with private-label goods.