ASOS, Zalando, & EU Fast Fashion | In Practise

ASOS, Zalando, & EU Fast Fashion

Former Sales and Marketing Director at Zalando

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Executive Bio

Former Sales and Marketing Director at Zalando

The executive has over 25 years working in fashion retail and is the Former Sales and Marketing Director at Zalando. She also has experience working for Missguided, a competitor to Boohoo and ASOS, and was responsible for selling the Arcadia Group brands, such as Topshop and Miss Selfridge, into Europe.Read more

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Interview Transcript

Disclaimer: This interview is for informational purposes only and should not be relied upon as a basis for investment decisions. In Practise is an independent publisher and all opinions expressed by guests are solely their own opinions and do not reflect the opinion of In Practise.

As you know, we are an investment fund looking more into the fashion industry and ASOS as a story, and wanted to see what your views were. Could you please introduce yourself so we can better understand your know-how and how things fit together?

I have spent 25 years working in the fashion industry, being involved with everything from luxury fashion to very fast fashion and I worked for a several UK brands. Separately, I have lived in Madrid, Berlin and the Middle East, so I am pretty well-versed in terms of the fashion industry from an international perspective. Aside from what I have achieved in my corporate career, last year I became a consultant working with fashion brands rather than for a company. I also have a fashion platform which is based around sustainability and the growing need for a more circular economy. That is a new project I am trying to get off of the ground.

What is the core competency and USP of ASOS in the marketplace?

ASOS has evolved over the past 20 odd years that it has existed. It has niched down in terms of who their customer is. 10 years ago, they were trying to do all brands, but have now niched down to the Gen Z and partly the Millennial market and have taken a big corner of that market. The pricing has been defined and they know who their customer is. Over the past five years it has changed substantially.

From my view, all those brands look the same, but just to get a better idea, what are the most important niches or where are the things developing if you go one level deeper into brand logic and categorization?

ASOS has a vision to be at the forefront of fashion, to be first at everything. From a fast fashion perspective, they are always on it in terms of trends but far cheaper than many other brands, but for them it is about being first to market rather than the price point. Even though it might be fast fashion, it is not necessarily the cheapest. They are niched into that, definitely with the brands which have evolved through ASOS because they have a slightly higher price point but also have the mainstream brands. They have become complementary with the brands they work with, in terms of what they are offering.

In terms of lower and higher price points, can they evolve their position to capture audiences above their 20s and follow them through their fashion life cycle?

Yes, I think they can. They have recognized they cannot keep customers forever. I am now in my 40s and was an ASOS customer over 10 years ago, but am no longer. I have grown up and moved onto brands which are no longer sold on ASOS. They did keep me on hook because of brands like ASOS Design, which was a higher price point but was also quality. It was never about the fashionability but more about staple pieces based around tailoring. It was more about the long-term investment pieces they niched into very well.

You mentioned they wanted to be first, and I know they have an extensive design team in-house; does that mean they differ to Zara who work for other brands or luxury brands that are innovating? Do they also take design risks or are they taking designs from the luxury players and bringing them to the cheaper mass market?

It is definitely a combination. Based on my experience with ASOS, I worked for a particular fast fashion brand who bought the product as a brand but we also provided them with exclusive pieces. They were first to market with those exclusives in terms of what worked well for that particular brand. For example, if it was a dress, we may repeat it in an exclusive style specifically for ASOS, with a longer or shorter sleeve and three inches longer or shorter.

They had a separate team for their private label business, which looked at trends happening on the catwalks and the fashion scene. They also looked at products from a data perspective in terms of what sold well on the ASOS website. They tried to get as much margin as possible with their own private label brands. For example, if red dresses did particularly well, they would do a range of red dresses.

How does that work because players like SHEIN put new designs out rapidly and if something sticks, they produce more. It seems that lead times are fast for them, but delivery times may take slightly longer because they ship from China. I understand that ASOS have a lead time of seven weeks, is that still the case and do you see that as an advantage or disadvantage in terms of, is that state of the art?

With ASOS the average is seven weeks but some brands deliver within two weeks.

Who are those?

Many UK suppliers and brands deliver quickly. In terms of the example you gave in regards to SHEIN or She In as it's known, their concept is about testing the trends from the catwalks to see what works. They are a very data driven company and look at who is shopping, specifically targeting the Gen Z generation. They are not interested in quality; the price point is what drives the number of sales. In addition to copying from the catwalk, they copy products from Zara and use prints which are very similar to products in high street brands. They are not bothered about which brands they copy, because they will do anything. If they can get something that looks similar to other products and they think that they can sell it, they will.

When you think about price versus brand, this leads to the lower price segment where brand is not an important driver; is that a fair assessment?

You are absolutely correct.

ASOS are acquiring brands which are complementary in this lower price bracket; what is your view on that strategy?

Are you alluding to their purchase of Top Shop earlier this year?

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