Online stalwart Asos is in for a fashion face-off with Amazon's wardrobe service

 
Shruti Tripathi Chopra
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Having a first-mover advantage isn't a bullet-proof strategy (Source: Getty)

What do Debenhams, House of Fraser, Mothercare and Asos not have in common?

Cracking Christmas clothing sales. While the high street’s stalwarts struggled to attract bargain-hunting shoppers over the festive season, their smaller online-only rival yesterday revealed a 30 per cent rise in sales for the final four months of 2017.

Asos, or as As Seen on Screen, floated on the Alternative Investment Market in 2001 for 20p a share. Today those shares are worth more than £70 a pop, valuing the fashion retailer at £5.9bn – a cool £1bn more than the retail industry’s bellwether Marks and Spencer.

The north London-based company’s progress is thanks to a strategy of beating household names to the punch.

Read more: Asos sales have soared as it attracted even more millennials

From its product range to delivery service and social media presence, it has made the twentysomethings skip trips to shops. All this without the hassle and investment of shop estate. But having a first-mover advantage isn’t bullet-proof.

As with any industry, someone better is right around the corner.

For Asos, that someone could be Amazon.

The e-commerce giant is currently trialling its “try before you buy” Prime Wardrobe service in the US. The new feature allows customers to order three or more items without paying for them up front. Members have a week to decide which items they want to keep and return. What’s more, shoppers are offered a hefty 20 per cent discount when they keep five or more items.

Read more: This online retailer aims to score better margins than Boohoo and Asos

And if customers don’t like any items, they put it back in Amazon’s resealable box which comes with a prepaid label for returns.

Rumour has it that Amazon is bringing the Prime Wardrobe service to the UK, which would put it directly in the path of Asos’ growth.

No doubt Asos has ambitious expansion plans. Just last year it opened a new distribution centre in Berlin and another one in Atlanta is on the cards for this year.

But to remain a retail darling, Asos needs solid ammunition to fight a force like Amazon that has access to swathes of consumer data, let alone billions of dollars at its disposal. It’s also worth noting that the American behemoth’s strategy involves dominating sectors by acquisitions.

And for years City analysts have said that Asos has a big Amazon-shaped target on its back. This fashion face-off is one to watch.

Read more: Asos is the fairest of them all as profits more than double

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