With sales flying, Asos is coasting the downturn. IT chief Gary Mudie tells Joanna Perry how his technology plan will keep it in fashion.

You’ll never catch him having a conversation with his fellow directors about network issues, promises Asos’ Gary Mudie.

In fact, this board-level IT director believes that if the IT department is part of the business, it should act like the rest of the business. “The buying director never says to the rest of the board that we didn’t get a shirt out because the thread count or buttons were wrong,” he reasons.
Luckily Mudie has plenty of bigger picture business issues to occupy his mind. He arrived at the e-tailer earlier this year, but it’s growing so quickly that there has been little time to get his feet under the table before he has had to start thinking of a plan to support a company of the size Asos intends to be within the next few years.

The retailer took 2 million orders last year, but had already overtaken that figure by the end of August this year. The site will also have up to 100,000 SKUs by Christmas, compared with less than 45,000 last year.

Mudie says that the systems in place can cope for the moment, but the company is working on a strategy for the longer term. “They are capable of taking us through this year’s trading and maybe next year, but we have to split out what we will create ourselves and what we won’t,” he explains.
In all likelihood this won’t lead to a rip-and-replace project; it is more likely that additional systems and technology will be brought in to increase the functionality of the e-tailer’s IT platform. Mudie says: “As we are growing in volume we will be putting in more robust systems to cope with demand over the next three to five years.”

He agrees with Asos chief executive Nick Robertson that the company should buy, not build, systems to support traditional retail functions such as buying and merchandising. He says: “There is nothing sexy in recreating systems that already exist. We will take a view on new systems to support buying and merchandising and financials in the next 12 to 18 months.”

Two new systems have been introduced in the past year: a CRM system from SmartFOCUS, and a system from eGain that is running at Asos’ call centre and analyses all e-mail queries sent to the customer care team.

However, Asos intends to continue differentiating itself from competitors through its web platform. Mudie says that this is where internal development capability will be focused.

There were no software packages available that did what Asos needed when the site was first set up. The web platform it runs on was essentially developed in-house, making use of third-party services for functions such as transaction management. He is keen to stay in complete control of how the company interacts with its customers through the site and has a research and development unit that works with leading technologists on this. “We have user interface specialists who understand human behaviour and translate it into technology. For us, having these skills in-house is the equivalent of a high street retailer having a store designer,” he says.

With about 20,000 options set to be available on the site this Christmas, Mudie says that customers can look at many more products and quicker compared with what they would see browsing a store. And he is pleased that Asos Red, a new tab on the site that launched in September, has had really good feedback.

Asos’ management is against adding gadgets to the site that bring no value to customers and could be risky. “It is our shop window and will be an area where we always stay ahead with new techniques and technologies. However, we won’t take anything bleeding-edge that could break the business,” says Mudie.

He is also keen not to get ahead of the technology adoption curve of his customers. However, he says it is interesting to note that 30 to 40 per cent of customers are now running Microsoft’s newest operating system Vista on their computers, and this is beginning to create opportunities to provide them with a more personalised experience on the site.

Asos’ site is based on Microsoft technology and Mudie is keen to embrace a service oriented architecture model when it comes to the platform’s development. He explains that this would allow new web site features to be almost “plug and play”, with little coding needed, and says this is the only way that the business can stay nimble.

Interestingly, the sites that are impressing Mudie at the moment are US-based, such as Endless.com, which he says has some nice features. He adds that Amazon (which owns Endless) has created a balance between simplicity and functionality. He also believes that Gap has made a directional move in the US with its single shopping basket concept.

Support for expanding operations

Asos’ burgeoning publishing operation means that Mudie has a “huge creative and production team” to cater for. He says the company is looking at systems to support this, as Asos’ women’s magazine now has the third largest circulation of any women’s magazine in the UK.

One area where the e-tailer has chosen to go into partnership is logistics. Asos works with Unipart and uses its systems to support its logistics function. However, with its quickly growing supply chain – and about 50 per cent of products sold are own-label – another likely project will be to choose a product lifecycle management system. The company already deals in fast fashion and with the support of a system to manage the process of getting product designs from conception to stock in the warehouse, Mudie believes that the company can get even faster.

Robertson has spoken before of his desire to take the business international. 10 per cent of sales already come from overseas. A phased approach of bringing more international brands to the web site and then setting up international sites will mean that the e-tailer has to look again at how it manages its supply chain. Mudie says that it doesn’t make sense to have products shipped to the UK from overseas, only to be shipped out again to fulfil international customers’ orders.

The e-tailer’s IT investment is planned to be in line with its growth projections, but any projects are expected to pay for themselves quickly. “We are cautious about financial investment. My whole training has been around getting return on investment. So my first stance is not always a technology solution, it is what actually is the problem and how do we deal with it. I am not shy to put people in – rather than technology – where it is appropriate,” Mudie says.

Emphasis is being placed on investment in people and skills. An IT team of 15 has already grown to a 70-strong workforce since Mudie started. A large portion of staff are working in development and he has also put in place a senior management team.

Mudie adds that not having complex store networks to support means that the company can do a lot with smaller IT budgets than other retailers he has worked with. However, with just one channel to operate, it is crucial that the site maintains maximum uptime, unlike other fashion retailers, which will still take a site down during the day for necessary maintenance. He explains that Asos already has a number of business protection procedures in place and a disaster recovery plan, and is moving towards a disaster avoidance strategy.

When the site does occasionally need to be taken down, which would normally only occur between midnight and 2am, the e-tailer is also careful to communicate to customers so they know what is going on.

Mudie says that having a chief executive who reminds him that enough people visit the site each day to fill Wembley Stadium twice is a wake up call.

And with the consumer downturn having done nothing so far to slow Asos’ pace of growth, Mudie might well find that soon enough his visitor numbers will be measured in terms of cities rather than stadiums.

Venturing into e-commerce services

Asos is working with some of the brands that sell through the site such as Religion and Ringspun to get them up and running with e-commerce quickly.

Mudie says that the model is for each of the brands to build their own magazine-style web site that connects through to the Asos site if consumers want to buy products. From the Religion web site, consumers can connect straight through to a page on the Asos web site showing all of the Religion products it is stocking at present.

Mudie adds that the company would consider offering white label e-commerce services, but that this would be a complete offer that could include fulfilment, rather than just a software platform.

However, he adds that Asos holds no ambitions to become a software house.

CAREER HISTORY

2008: IT director at Asos.com
2006: international IT director, Borders Group; global chief information officer, Paperchase
2002: IT consultant at Paperchase, which was bought by Borders Group
2000: global programme director, Universal Music Group
1998: managing consultant, CSC (Computer Sciences Corporation)
1991: various roles, Burton Group