Case Study: ASOS.com
With the success of the Internet, retailers have quickly adapted to the online racket and recognize that the Internet Is a part of many people’s everyday lives. Online retelling Is rapidly becoming the preferred option for companies to sell their products. SASS, or As Seen On Screen, focuses solely on this concept. SASS has websites targeting the ELK, USA, France and Germany and also ships to over 190 other countries.
Aimed at fashion forward 16 to 34-year-olds, SASS attracts over 13 million unique visitors a month and as at 31 March 2011 had 5. 3 million registered users and 3. Million active customers from 160 countries (defined as having shopped in the last 12 months). Table of Contents 1. Introduction 2. Porter’s Five Forces 3.
SOOT Analysis 4. Assets 5. Segmentation 6. Resource Analysis 7. Recommendations 8. Conclusion 9.
References Introduction Founded In 2000 by Nick Robertson, SASS, earlier known as As Seen On Screen, Is the third most visited online fashion retailer In the world. Started off as a UK online clothing retailer SASS aimed to become a global fashion brand. It Is now working towards being established as a genuine fashion destination.
It has racked up profits AT more than Meme Ana Is along Tort a El on turnover Day 2015. NICK Retention, under and chief executive of SASS, is continuing to mould SASS by pouring resources into marketing, technology and functionality.
In 2008, SASS won the Online Retailer of the Year Award by Retail Week Awards and in 2011 it won the Best Online Only Fashion Site by Handbag. Com Online Fashion Awards, amongst others. It has correctly recognized the increasing popularity of online shopping and exploited it in order to grow its business. It is an online only corporation and keeps its costs down by not having a high street store.
Nick Robertson’s ambition of taking El ban in sales by 201 5 looks very real, as do his Lana to make SASS a global fashion force. The mission to make Internet shopping a favored experience over the established high street is Robertson’s aspiration; so continuing to create barrier-breakers remains high on the agenda.
Porter’s Five Forces Porter’s Five Forces (Michael Porter Competitive Strategy, Free Press, 1980) is a way of analyzing the business’ environment. Porter’s model identifies the forces that influence competitive advantage in the marketplace.
According to this model, there are five key factors that influence the state of a market or industry: 1 . Buyer Power Individually, a customer of SASS does not have much power, but collectively the buyers are very powerful. If a consumer decides that a product on SASS is marked at too high a price, SASS will be forced to bring the price of its service down because it relies on its customers. With technological advancement in online retail, customers are enabled to compare prices of similar products and can purchase cheaper alternatives from other companies like Primary.
Thus customers of SASS, together, have a high bargaining or buyer power. 2. Supplier Power There are several independent designers who work with SASS. Incase they feel that SASS is not paying them reasonably for their popular designs they could go to SASS’ competitors. This gives them a high supply power. However, SASS has a vast range of suppliers they can choose from in the current economic climate as the majority of clothes sold on sass.
Com could be supplied from an array of companies. This leaves the suppliers with a low bargaining power. 3.
Barriers to entry For a company to enter the online retail industry there are not many obstacles. It is comparatively easy to imitate retail websites. The new entrant must provide its customers Walt super quality goods at ten scantest prices .
Because SASS Is sun a cost-effective company, others will be tempted to enter the market and attempt to increase their profits while decreasing that of SASS’. This force requires SASS to be extremely alert about its competitors. SASS needs to keep a close watch on the market to prevent new entrants from creating dips in their profit margins. . Substitution In this market, substitution a major issue for SASS. Because SASS relies on the fact that they sell their products at cheaper prices than their rivals, customers are inclined to using their services.
However, if someone with similar resources and services as SASS decides to set up an online retail company selling its products at prices cheaper to that of SASS, they can pose a strong competitive threat. Customers will not take long before they switch to this cheaper alternative. SASS has to closely monitor any new such competitors who pose a threat to their company. 5.
Rivalry SASS possesses a competitive advantage over its rivals who have traditional clothing stores as it is an online only retailer.
However in this industry, rivals tend to moment aggressively solely based on the price of their products. SASS competes with corporations like Top Shop and River Island because they sell clothing very similar to each other. In order to stay ahead of its competitors SASS must provide its customers with the best quality goods at the cheapest prices. They must keep up with the latest trends and offer new products as often as they can before their rivals get the chance to release similar services.
Due to the fact that the clothes offered from these various companies are more or less the same, price is the key factor of differentiation. SOOT SOOT Analysis is a strategic method used to evaluate the Strengths and Weakness of a company and its products, and the external factors over which the company has no control such as Opportunities and Threats.
1 . Strengths SASS’ strength is its use of technology and the Internet. Through this virtual medium it has created its own defined market segment composed mainly of customers who use the Internet.
Since SASS focuses on fewer market segments it is able to provide better service to its buyers rather than expanding its attention over numerous market segments and losing out on quality. The marketing edge of SASS is that the apparel it sells, which is its core focus, is influenced by what celebrities wear thus attracting customers immediately. It also gives many different discounts over and above its cheap prices and offers free delivery.
The accessibility of the website is very easy Ana It Is simple Tort ten online snooping to navigate tongue.
SASS NAS Dolls and magazines through which it advertises. It also has a Fashion Finder which links all clothing items found in outfit pictures, making it easy for customers to identify the product they want to purchase. By signing up, customers can create their own outfits; this makes them feel connected to the brand. 2.
Weaknesses Delivery methods used by SASS are a weakness because they rely on postal or courier services. During unforeseen weather conditions this could result in failure to be punctual and a lot of unhappy customers.
As it is an online only retail corporation, SASS loses out on potential buyers who like to ensure that the clothes they purchase fit them the way they like. Because the customer can only view the item virtually before purchasing, there is a higher level of returns as compared to other retailers ho have traditional clothing stores. The website has a very young and vibrant feel to it which could possibly deter older customers from using it’s services. The Joy that some people feel when they go shopping is often lost through the concept of online shopping, which is less personal.
. Opportunities Commerce channels now represent 11% of the total I-J retail business, and record numbers of products are being procured vie the internet (Thomson et al, 2005). In the everyday lives of people, technology and the Internet have been integrated. The convenience and affordable prices draw potential buyers. As the number of working women, who are a majority of SASS’ customers, increases they are likely to become more financially independent and will need more clothes.
Also, there is an increase in the number of men browsing for clothes through the Internet. 4.
Threats International growth poses threats to the SASS brand. Copycat websites can cause huge security breaches. Brands such as Ezra, H;M and Guess are yet popular in the market and online retailers from overseas are effectively making their way through to the I-J. Unexpected downfalls in the economy can also cause customers o reduce their purchases on the online retail website.
Segmentation Market segmentation is the process of dividing consumers into different categories based on distinguishing characteristics. There are several key market segments used in the retail sector: 1 .
Gender-Related Segments 2 Age- EAI EAI segments 3. Geographic Segments 4. Behavior-Related Segments 5.
Lifestyle Segmentation SASS focuses mainly on Age-Related Segments. SASS’ target market is 16-34 year olds globally. Customers of this age are fashion enthusiasts no matter which country they are from. They are influenced by celebrities and follow the latest fashion trends. SASS is thus their preferred shopping destination. It not only offers its products at the best prices but also offers very fast deliver service including same day delivery through the Meta Pack software and City Sprint’s Same Day Courier.
There are various strategies companies have to implement in order to have a smooth and profitable functioning. SASS follows the Niche Strategy; to select a narrow-scope segment (niche market) and be the best in quality, speed and cost of products in that market (Turban et al, 2001). Resource Analysis SASS aims to have the capacity to deliver one billion pounds worth of sales. In order to achieve this they work on continuously improving their resources and services. To meet their anticipated growth targets, they moved into a 530,000 square foot warehouse in Barnacles.
They developed their operational efficiencies and introduced SASS into the US, Australia and France through a direct injection model.
Their delivery times have improved across the world and new customs processes haven been introduced to improve returns services. Their country list has increased to 196; 236 territories. To achieve their global growth targets, a Buying and Merchandising system was introduced to change manual and labor intensive procedures to less time consuming and more structured ones.
They continuously improve their website and in the previous year spent 10 million pounds to ensure state-of-the-art software. They increased their staff costs by 38%, marketing costs by 54% and technology costs by 72% to prepare for the demand. Resources have been dedicated to lead the mobile channel which is an important growth factor.
Recommendations SASS should keep investing in Information Technology and introduce new mediums f advertising. They should create an online fitting room to enhance the online shopping experience for its consumers.
They should start their own postal service to ensure fast delivery of products and deliver their best service. SASS should also open high street stores to give the customer a full buying experience. With the recent changes In ten government tense Is a Nell expectation AT JODI cuts S must TA this unemployment into consideration, as it will lead to a lower level of disposable income.
They need to develop a strategy to work around this challenge over the coming years. Conclusion References