Primark’s decision to start selling online through Asos is yet another indication that chances of retail success are improved by having a good multichannel strategy.

Primark’s decision to start selling online through Asos is yet another indication that chances of retail success are improved by having a good multichannel strategy.

The online market now represents more than 16% of all fashion spend, having grown by 13% in the last year, and Asos continues to grow its share of this channel.

Until now, Primark has been unwilling to jump on the digital bandwagon because its low prices pose profitability questions.  Perhaps unsurprisingly, it is the last of the fashion retail giants – aside from Sainsbury’s which only sells Tu hosiery – to take the step.  So, has it made the right decision? And what’s in it for Asos?

The move looks likely to benefit both parties. For Primark there is nothing to lose, it’s a perfect compromise to get around the profitability issues, while Asos can add to its growing repertoire of high street brands. 

Although its collection already includes the likes of River Island and New Look, other high street brands cannot match Primark’s reputation and remarkable growth which Asos will now benefit from.

Both retailers have similar shopper demographics; however, there are some distinct differences which Asos can use to its advantage. 

Over a third of Asos’ sales come from the London area while Primark is far more nationally represented. This means Asos can use the partnership to widen its customer base across the country. 

In addition, with about one in three Primark shoppers aged under 25 (compared with nearly two in three of Asos customers), the etailer now has the opportunity to tap in to a slightly older shopper purse, even if those consumers are buying for their daughters.

Although we are starting to see an increase in the number of people that shop in both retailers – in the year to April 2012, about 1.6m shoppers bought from both retailers however by April 2013, this number had increased by 23% to just over 2m – there are still 21m Primark shoppers that do not shop in Asos at present. This is where the massive opportunity lies.

It’s a clever initiaitve for both parties but Asos in particular can really look to grow its customer base. 

At the moment, Primark shoppers spend £1.6bn on womenswear online and Asos is their third favourite destination after the Next and Shop Direct websites. 

However, only 6% of that pot goes to Asos. This figure is almost certain to rise now that Asos has opened its doors that little bit wider to Primark shoppers.

  • Ian Mitchell is business unit director at Kantar Worldpanel