As some dire non-food Christmas trading results have rolled in, there were a couple of bright spots in an otherwise gloomy January sky.
One was the continued advance of the lifestyle-oriented retailers, with Superdry and Ted Baker leading the pack. The other was the incredible performance by pureplay Boohoo, where revenues doubled at a group level.
This week, all eyes will be on whether fellow etailer Asos can replicate its rival’s success when it reports its Christmas trading on Thursday, January 25.
The outlook appears positive – as more data emerges, it’s becoming clear that this Christmas was more about online than ever before.
Take high street stalwart Next, for example. The retailer run by Lord Wolfson posted a full-price bricks-and-mortar fall of 6.1% while its full-price online sales shot up 13.6%.
“Gift-shoppers choosing not to battle the high street means that strong online players – such as Asos – could have won even bigger than in previous years”
Coupled with December’s footfall data, which saw the sharpest rate of decline in nearly five years, this paints a picture of divided fortunes for online and offline retailers.
Shopper numbers fell 3.5% in the five weeks to December 30 compared to the same period a year ago, according to the BRC-Springboard Footfall and Vacancies Monitor.
Shopping centres, retail parks and high streets all suffered a similar level of decline and consequently Christmas footfall came in “significantly below” the average over three-month and 12-month periods, which suffered 1.9% and 0.7% declines respectively.
Gift-shoppers choosing not to battle the high street means that strong online players – such as Asos – could have won even bigger than in previous years.
Reasons for Asos’ success
Three major factors back up analysts’ forecasts that Asos sales will have soared 28% on a reported basis over Christmas – and these same three factors will see it prosper over the year ahead.
The first is its stellar delivery proposition.
At Christmas, customers were able to order in time for the big day up until December 23. That will have stood it in good stead with last-minute gifting and party outfit-buying and comes on top of its regular same-day delivery offer in London, Manchester and London.
What’s more, the etailer is storming ahead on supply chain capabilities – its new Eurohub in Germany is now fully operational, while its US warehouse will open this autumn.
These developments play into the accelerating shift to online and ensure Asos is in a position to capitalise on that.
Second is its category extension. Its beauty launch last year, which was supported by a host of outdoor and social media advertising, should have boosted gifting spend while its new activewear range – late to the market because of long-running trademark disputes – launched this week.
“While it’s easy for more established retailers to throw up their hands in despair of replicating the success that Asos and Boohoo manage to make look easy, it’s worth noting the results that those tactics can bring”
While only six ski-wear items are currently on the site, the rest of the range should be available mid-February. That won’t contribute to festive trading but is sure to boost sales in the year ahead.
Third is an area Asos has historically excelled at – and one that fellow festive winner Superdry also managed to master over the period.
Both companies’ marketing efforts were completely in tune with their customers – from Asos’ current More Reasons to Move activewear campaign to Superdry’s digital campaigns such as This is the Jacket, which featured grime artist Paigey Cakey.
While it’s easy for more established retailers to throw up their hands in despair of replicating the success that Asos and Boohoo manage to make look easy, it’s worth noting the results that those tactics can bring.
Those with store estates should look to the likes of Asos for inspiration on what they can change, rather than begrudge the etailers’ success.
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