Retail Theory and Practice

This report analyzes the operations of ASOS, a large retail business organization, in the UK fashion clothing sector and provides recommendations on strategies to address industry changes.

Retail Theory and
Practice

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Introduction to the Company.......................................................................................................3
Several changes in macro environment in UK fashion retailer...................................................4
Changes within micro environment.............................................................................................5
Suggestion of several strategies and tactics that could be used by ASOS to gain competitive
advantages....................................................................................................................................6
Recommendation.........................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Retail is the strategic process through which a business organisation sells to the
consumers goods and services that are manufactured by the business organisation through
various distribution channels in an attempt to earn financial profits from the consumer markets.
Fashion retail refers to the selling of fashion clothing products and apparels manufactured by a
business organisation to the customers within the consumer markets in order to gain profits. The
retail fashion industry of UK is a large industry with numerous different business organisations
operating in it to satisfy and meet the needs of a very large base of global consumers all around
the world. This report analyses the operations of ASOS a large retail business organisation
towards identifying the changes in the UK fashion clothing sector and make recommendations
on strategies that can be used by ASOS to address the changes within UK’s fashion industry.
MAIN BODY
Introduction to the Company
ASOS is a quite prominent pubic retail business organisation that operates in the fashion
and clothing industry of UK. ASOS specialises in selling fashion clothing products and apparels
in addition to cosmetic goods to the consumers through their official online digital store. ASOS
was founded in 2000, being an abbreviation for “AsSeenOnScreen” where the business sold
clothing products that were imitated to look like the clothes worn by celebrities on TV and films.
Since then the business has been able to expand and diversify its operations, now being only
known as ASOS. ASOS operates from its current headquarters which are located in London,
England (Who We Are, 2020). The digital store of ASOS sells to the consumers clothing
products and apparels from over 850 different brands in addition to the range of clothes and
accessories that have been manufactured by ASOS themselves.ASOS conducts its operations in
the fashion retail industry by shipping purchased goods to their customers in all the 196 different
countries across the world from their dedicated fulfilment centres which are located in EU, US
and UK respectively. ASOS is a large size business organisation as it employs more than 400
employees at various positions within its hierarchical structure, making ASOS biggest
independent online fashion beauty retail business organisation in UK. On the basis of its global
operations and customer base, ASOS enjoys a very strong market position within online fashion
retail industry.

Several changes in macro environment in UK fashion retailer
There are continuous changes and development in macro environment that have
impacted business operation and strategy. Asos is British online fashion retailer that sells its 850
brand products through official websites to attract large number of individuals. There are rapid
changes in customers preference, policies of government and development in technologies that
have forced Asos to make changes in its operation in order to retained market share and
customers satisfaction. Pestle analysis is a powerful model which is used to identify several key
external factors that impact on Asos operation. Such as:
Political factors: Due to increase number of case of loss of personal data and information
of individual that is customers while they are using internet or making purchased online. So,
government in order to protect people for theft or loss of data have make rules and regulation
such as GDPR which needs to be followed by ASOS while operating its business (Kim, Park
and Glovinsky, 2018). Brexit is policy that has reduced sales of large number of fashion retailers
but ASOS by delivering products at reasonable rates is able to meet customer’s satisfaction.
Economic condition: It can be stated that UK is facing situation of recession and
increasing level of unemployment rates therefore slow economic growth that have impacted on
choice of people to spend their income on unessential products. ASOS operates its business
online so cost of maintaining stock of products and warehouse are saved so company is able to
provide maximum value to end user at affordable prices. Thus, people are motivated to prefer
products and services of ASOS as compared to other competitors in market.
Social factors: Customers are most important resources of firm as it performs several
function and activities in order to satisfied or fulfil their requirements so overall objectives can
be achieved. There are several changes in preference and taste of customers such as most of the
younger generation like to have shopping of fashionable clothes and cosmetic through online as
it provide ease and comfort to them by delivering products at their doorsteps. At the same time
there are people that think digital platform is not best way to purchased products as individual
cannot feel, touch and look at products such as in physical stores. Thus, lack of trust and physical
presence are two main barriers that have impacted more sales of ASOS.
Technological factors: There is rapid development and innovation in technologies
related to production and delivery of products to customers. Most of the individual or younger
generation spend their lot of time having enjoyment and fun in social media so advertisement of

fashionable products of ASOS have provided opportunity to company to attract large number of
individual for growth and success of firm. ASOS have its official website where customers can
easily see varieties of products, services and brand firm deals in order to select best option for
fulfilment of their requirements (Thakur, 2018). Therefore technological development have
contributed in increasing sales, brining new idea to influence people but at the same time it have
increased overall cost as it have to adapted to new and innovative technologies.
Environmental factors: People and government are becoming more and more aware as
well as concerned about natural resources and impact of business on environment. There are
limited resources in environment so government as well as local communities are forcing ASOS
to take various initiatives in CSR activities and optimum utilisation of resources in order to grow
and sustain its business in fashion retail industry. Thus, it have also increased overall cost and
impacted upon profitability of firm.
Legal factors: It is last external factors that have also impact on ASOS as several legal
laws, rules, policies and procedure made by government to protect employees and customers
from being cheated needed to be followed by enterprise (Kautish and Sharma, 2018). Such as
GDPR, employment act, health and safety of individual and discriminative laws that need to be
followed by manager while performing their task.
Changes within micro environment
SWOT analysis-
It is one of the best techniques or models that a company can use to asses four aspects of
business in effective and systematic manner. It stands for strength, weakness, opportunity and
threat. ASOS company can use this tool to make most of what they have got, to their business’s
best advantage that is very important.
Strengths-
ASOS is leading brand in the world they sell over 850 brands and their own range of
apparel as well as accessories (Colliander and Marder, 2018). One of its biggest strengths, is
innovative ways of company used to display merchandise to consumers and creative ways to
shop, including client created looks, business edited fashion trends and ASOS market place.
Another strength of this organization is its independent online product selling capability which
makes them able to lead a market even better. Firm assure that it does everything to aid people

find their fit. They have more than 30 sizes and is committed to offering all sizes at same set
price. With all above strengths company can sustain for long run.
Weaknesses-
It can be said that every company has some weaknesses that affect profitability and
productivity in negative manner. ASOS is less invest on research and development function, it
has not been capable to beat with leading sector players like Boohoo in term of innovation. It has
come across as mature company who brings out goods on their websites when it is already
working and testing in specific market. They need to take appropriate action related to this
weakness. Another weakness of ASOS is lack of investment in advanced technologies that
impact on its brand image negatively and also affect operational efficiency.
Opportunities-
Development of digital technology is one of the biggest and best chances for company
which they can grab to enhance and improve business operations as well as practices (Park, Sung
and Im, 2017). With the help of advanced technology, organization can generate brand
awareness across UK and all over the world in effective manner. Changing trends is another
change firm can grab to build strong brand image and recognization effectively. The newer
trends in fashion sector and modifications in consumers purchasing behaviour can open up new
markets for organization, where they can achieve their aims by providing quality products. These
two opportunities are very beneficial for business and increasing productivity rather than before.
Threats-
Due to intense competition level ASOS organization feel high pressure, they conduct a
lot of efforts to overcome. It is one of the biggest threat that affect operational and functional
functions of company in negative manner. Organization must work on marketing of items in
terms of unique selling propositions and positioning. Since there are not good defined, it has led
to major attacks in segment by business rivals.
Suggestion of several strategies and tactics that could be used by ASOS to gain competitive
advantages
From the above analysis and evaluation it can be concluded that there are several
strategies and tactics which can be used by manager of ASOS to promote its sales and enhance
market share of firm. One of biggest challenge that is faced by ASOS is increasing level of

competition in online fashion retailing as most of the companies are planning to increase their
presence in online sites (Patten and et.al., 2020). ASOS in order to compete with other
competitors have to differentiate its products and services in terms of quality, uniqueness and
design of clothes or cosmetic products so diverse individuals are motivated to make purchased
for satisfaction of their requirements. It have to improve its supply chain management and
focused on quick delivery of products and services to end users so that they can get it within
minimum time frame and cost. Most of the people are using social media or search engine to get
knowledge about brand that deals in high quality of products in fashionable retail industry so that
they can have better option at reasonable prices. Therefore, ASOS by providing better service to
customers by use of innovative technologies is able to retained their satisfaction level and
loyalty. Content marketing can also another tactics or strategic that can be used by marketer of
ASOS to create strong brand awareness and reputation of company in mind and heart of
customers.
Most of the companies are making ineffective use of resources or the amount of wastage
released by fashion retailer is increasing at rapid stage which have created problem for local
communities in near future. ASOS in order to add more customers with firm have to adapt to
sustainable operation of business which means maximum or optimum utilisation of resources by
minimising amount of wastages so that high value products can be delivered to end users
(Perlacia, Duml and Saebi, 2017). Company needs to engage itself in CSR activities for
development and maintenance of strong brand image of firm in fashionable retailers as people
preferred company that take crucial steps for benefits and welfare of individuals.
ASOS needs to invest its sufficient amount in new and innovative technologies in order
to delivered best services to end customers. It can also make use of information management
system in order to effectively analysis data regarding existing availability of resource, future
demand so that sufficient products can be arranged for meeting requirements of end consumers.
It helps company to easily evaluate existing performance of enterprise in retail fashion industry.
ASOS needs to pay emphasis on building strong relationship, confidence and trust among
customers in order to increased number of repeated sales in firm. 24 hour customer’s services,
resolve of grievance or problem of consumers within limited time frame can contribute in
maintaining relationship and satisfaction of individual needs. Company can motivate individual
to make purchased can upload clear and appropriate image of several products and services on its

official websites. Provide information about promotion offers that are launched by company can
also contribute in increasing overall sales volume of firm.
ASOS in order to avoid legal complication in future and satisfy needs of customers in best
possible manner needs to take steps to protect their crucial information and data being stolen for
undesirable purpose. Refund and replace policies of ASOS can also contribute in developing
more customer satisfaction and increase in overall sales volume of firm (Davari, 2016). Brexit
has resulted in decreased in sales volume of firm as people were less interested to spend their
saving or disposable income on fashionable products thus company needs to make use of
innovative technologies to reduce cost and delivered best quality products to end customers.
Therefore these are various strategies and tactic which could be adapted by ASOS to retained
customers satisfaction and brand image of enterprise in fashion retail.
Recommendation
These are following recommendation which can be used by ASOS to enjoy large profit
margin and huge market share in fashionable retail. Several recommendations for ASOS can be
illustrated as follows:
 It can make standard procedure that needs to be followed by employees to delivered
qualitative services customers so that number of errors, mistakes can be minimised
and better outcome can be gained (Kautish and Sharma, 2018).
 Email marketing or personalised blog content can be used by ASOS to create aware
of brand products and services in which company for effective achievement of
goals.
 ASOS can make use of information technology in order to collect and analysis data
about needs and preference of customers or recent trends so that it can make
optimum utilisation of available opportunities and gain competitive advantages.
 Promote sustainable work culture and effective utilisation of resources so that
maximum value products can be render to customers at reasonable rates for earning
more profitability (Strähle and Müller, 2017).
 It is last recommendation that can be used by ASOS to meet its desired goals or
attained objectives is that it can invest more in research and development
department to find best possible or unique method to meet customer’s expectancy.

CONCLUSION
Through the analysis of the report, it is concluded that there are major significant changes
within the UK fashion clothing sector and the micro environment of ASOS, which have a
significant impact on the financial and operational performance of ASOS, that it can effectively
address through the strategies and tactics discussed in the report. This report introduces ASOS
and makes use of PESTLE framework in order to effectively evaluate the macro environment of
the entire retail fashion market of UK. The report also makes use of SWOT framework with the
intention to effectively analyse the micro environment of ASOS. Finally, on the basis of the most
significant changes identified, the report recommends strategies and tactics that ASOS can make
use of in order to effectively address the changes and continue their successful operations.

REFERENCES
Books and Journals
Colliander, J. and Marder, B., 2018. ‘Snap happy’brands: Increasing publicity effectiveness
through a snapshot aesthetic when marketing a brand on Instagram. Computers in Human
Behavior. 78. pp.34-43.
Davari, A., 2016. Investigating the Determinants of Store Brand Image for Online
Retailers. 2016 SMA Proceedings, p.341.
Kautish, P. and Sharma, R., 2018. Consumer values, fashion consciousness and behavioural
intentions in the online fashion retail sector. International Journal of Retail &
Distribution Management.
Kim, J., Park, J. and Glovinsky, P. L., 2018. Customer involvement, fashion consciousness, and
loyalty for fast-fashion retailers. Journal of Fashion Marketing and Management: An
International Journal.
Park, J.Y., Sung, C.S. and Im, I., 2017. Does social media use influence entrepreneurial
opportunity? A review of its moderating role. Sustainability. 9(9). p.1593.
Patten, E and et.al., 2020. Minding the competition: The drivers for multichannel service quality
in fashion retailing. Journal of Retailing and Consumer Services, 53. p.101974.
Perlacia, A. S., Duml, V. and Saebi, T., 2017. Collaborative consumption: Live fashion, don’t
own it. Beta, 31(01). pp.6-24.
Strähle, J. and Müller, V., 2017. Key aspects of sustainability in fashion retail. In Green fashion
retail (pp. 7-26). Springer, Singapore.
Thakur, R., 2018. Customer engagement and online reviews. Journal of Retailing and Consumer
Services, 41, pp.48-59.
Online
Who We Are, 2020 [Online]. Available Through :< https://www.asos.com/about/who-we-are/?
ctaref=aboutus|whoweare>