Asos is investing millions in its IT. Chief information officer Pete Marsden explains how he plans to make sure its technology is underpinning its phenomenal growth.
Asos’s first half results don’t, at first glance, look as glittering as its financial announcements normally do.
Pre-tax profits fell 22% to £20.1m in the six months to February 28, despite sales surging 34% to £481.7m. But the reason behind it is a renewed vigour in its IT and infrastructure investment – a total of £68 million is being invested during the current year in logistics, IT and the Chinese site.
Chief information officer Pete Marsden is heading up Asos’ drive to bring its technology bang up to date. From the outside, it is easy to assume that the etailer’s technology has always been cutting edge – its phenomenal growth has, after all, relied directly on the technology driving its site. But it is this fast growth, combined with the relentless pace of change in retail and the speed at which the fashion behemoth is scaling up in size, that means even Asos’ systems need some attention.
“We all work very closely together and are very focused on the timely nature of the business.”
Pete Marsden, Asos chief information officer
Marsden, who joined the business in September 2012, says: “We had to change quite a lot. The main problem with Asos’ technology was that a lot of it was self-built in the early days. When they built these systems they didn’t expect Asos would be a global player that needs to operate with Far Eastern languages and at the scale we now operate. They didn’t have the level of sophistication needed and we have had to rebuild a lot of the front end systems.”
Asos’ investment schedule is a formidable one. It has already refreshed its front end systems, rolling out a new content management system which allows the marketing and editorial teams to update pages and content daily. The system also allows different content to be uploaded for different markets.
Marsden adds Asos is now working on the security aspects of the website. “We’re rebuilding core parts of the platform such as the checkout and the basket, to make sure we can keep up with growth. That part of the system has to be really high performance. Customers want to press a button that says ‘buy’ – at that point, we have to check the stock, check the delivery option and make sure the delivery partner can do it, take the payment and validate it all in that one second. You have to build that part of the system really well.”
Plus, the company will soon allow shoppers to purchase without registering on the site, as well as allowing them to sign in to the site via Twitter or Facebook. “We are looking at all aspects of traffic – how user journeys are managed and how easy it is for customers to navigate.”
A large amount of work is going on with back-end systems as well. For a start, Asos is building a new data warehouse to help it deal with the volumes of data it gets. “We get petabytes of data. We use Hadoop database technology and we send reports to the marketing team – we give them all the data they could want. We’ve got data scientists who analyse it all, and we use that to shift the look and feel of the website.”
As at Amazon, where use of data is credited for a large part of its success, Asos prioritises its use of data. Marsden – who used to work at Orange UK and the Royal Bank of Scotland – says: “The level of detail we go into in understanding data is just as high as it was in telecoms. We have a detailed understanding of each customer and the profitability of each customer. We learn what sells well in what place – it’s really important for us to understand what’s trending and getting the right product to market.”
He says his key priority is to build speed and flexibility into Asos’ systems, so they can cope and evolve as the business continues to grow and change. “Fashion moves at such a great rate, it’s a real challenge. It’s really important for us to try and design for speed. Speed doesn’t happen on its own – we have to constantly think about how we are building systems so they’re easy to change. That takes a lot of effort. We build in a modular fashion.”
This means Asos is boosting its use of cloud technologies, especially when it comes to international operations. “We are very conscious that having a UK data centre is a very long way from Australia. The cloud improves speed and helps with flexibility – we don’t have to keep buying new equipment.”
Asos has historically built a lot of its own system, and depending on the area of the business, this is still the case. “The closer to our customers the system is, the more likely we are to build our own systems. Apps and mobile sites, for instance, we built ourselves – warehouse management systems, we are not specialised in.”
A lot of the work going on at the etailer is internationally focused. The company is launching apps for Australia and the US, and will do the same for France and Germany later in the year. Marsden says getting everything right for different types of consumers is a delicate balancing act – the content, the language, payment options and delivery options all change in each market. He says: “The look and feel might be similar but in Russia, for instance, they want to have cash on delivery because it takes so long to get to them – the last thing they want to do is pay on credit card before the goods arrive.”
In the Far East and China, meanwhile, the look and feel of the site and apps is very different. “They want five times as many images, they want more detail, the level of information they ask for is much higher. They’re also even keener on social media than we are. They look for recommendations from other customers and peer reviews.”
While all this is going on, Asos continues to push the envelope on home turf, coming up with new innovations in areas from delivery to content. It is planning to roll out a ‘pick up drop off’ service in France and England allowing shoppers to collect parcels from a network of independent retailers, and it is trialling a loyalty scheme in the UK.
While Marsden insists it’s “not rocket science”, coming up with a technology strategy that supports a growth plan like Asos’ is a big task. His team is around 400 strong, and split into three. One section works closely with marketing, another focuses on core ecommerce systems such as the warehouse and buying and merchandising, and the third section is the data team.
Marsden says: “We all work very closely together and are very focused on the timely nature of the business. We all understand the performance of the site and what’s selling every day.” And by all appearances, Asos’s technology team is more than equal to the task in front of it.