How ASOS uses warehouse technology to differentiate their brand

Warehouse automation doesn’t sound like something a consumer-facing company would focus on as their key differentiator, but for fast fashion brand ASOS, same and next day shipping is a huge part of their competitive advantage. It’s the first thing they tout to consumers on a page on their website titled, “The ASOS experience.” By focusing on streamlining logistics and automating their warehouse technology, they have grown from a predominantly European brand to a worldwide force.

Founded almost two decades ago in London, the direct-to-consumer fashion brand’s super-fast, free shipping and returns is a major driving force behind their ability to compete worldwide. They’ve optimized the process so well that they’re now able to offer next-day shipping anywhere in the U.K. for all orders made before midnight, every day but Saturday (when they still offer next-day shipping for orders made before 8 PM).

By focusing on increasing the sophistication of their warehouse technology and giving customers more access to their ever-expanding inventory of house-designed and popular brands, ASOS is exceeding expectations and maintaining their position in the market.

Invest in logistics as you grow

ASOS invests significantly in its warehouse and shipping logistics in order to meet lofty efficiency goals. By automating their warehouses they’ve establish a midnight cutoff for next-day shipping almost every day of the week. It’s this experience that sets ASOS apart from their competition.

In their 2018 financial statement, ASOS notes that their “investment across technology and logistics continues to deliver great results and is key to sustaining the strong growth momentum within the business.”

These investments routinely pay dividends for the company. Sales in 2017 were up 26 percent, due in large part to ASOS’s continued investment in its warehouse and shipping infrastructure to support international expansion. Those investments included software and physical systems aimed at further automating their warehouses and increasing efficiency.

The technology investments not only result in a better customer experience, due to faster shipping times and fewer lost orders, they also reduce costs. Adding automation and better sortation technology to warehouses in 2016 resulted in a huge drop in warehouse costs, for example.

Sortation machine. Via: Warehouse & Logistics News.

This faster and more streamlined approach to warehouse automation helps position ASOS as a major player in the market as well. The name of the game for big eCommerce retailers is now automation. Big players like Alibaba and JD are heavily investing in automated warehouse technology that allows them sort, pick, and pack customer orders faster and with less human intervention. ASOS is following suit by continually making improvements to its own warehouse network with an eye toward increasing automation for greater efficiency and speed.

Of course, ASOS’s logistics improvements aren’t all about technology. For instance, in 2016, ASOS renegotiated carrier pricing agreements and was able to use those benefits to reduce standard ship times.

By leveraging their ever-expanding network of warehouses and investing in automation technology, ASOS has expanded their distribution capabilities in a way that supports faster shipping, production, and tracking of every item they sell. This enables them to provide a streamlined customer experience centered around free, fast shipping and returns.

Find ways to highlight specific differentiable features

In a crowded fast fashion market, ASOS needs to find as many ways to showcase their unique selling points as possible. They do this through ads and social media content, as well as a localized website experience. When a customer interacts with ASOS they immediately know what kind of experience they can expect.

One way ASOS accomplishes this is through their advertising strategy. Their ads routinely feature statements about their worldwide, free shipping and free returns.

Shipping-focus ASOS ads via Moat.

By focusing on this specific aspect of their brand, ASOS is taking a much different approach than their competitors. Take these ads from Zara, one of ASOS’s fiercest European competitors:

Sale-focused Zara ads via Moat.

Zara’s ads focus more on item price. But when it comes to fast fashion, low prices are expected. ASOS is able to stand apart by offering something extra—free and fast shipping, and free returns—made possible because of their obsessive focus on continually streamlining and upgrading their warehouse and shipping logistics.

Customers encounter the same themes when selecting their location on ASOS’s website:

Website preferences via ASOS.

ASOS makes sure to put their shipping guarantees front-and-center during the checkout process, which not only reinforces their key differentiator, but likely also pre-empts some abandoned carts. Further, by localizing their website experience ASOS is better able to provide a personalized shopping experience. Customers know exactly what they’ll receive from the company, and adjust their expectations accordingly.

This is another way that technology affects the customer experience at ASOS. The company’s ability to provide a certain type of experience based on the customer’s specific needs is dependent on their ability to fulfill these promises. They even extend this personalization into the post-purchase experience with a service called Precise, which gives the customer the ability to choose their preferred shipping times.

Matt Rogers, director of delivery solutions & inbound supply chain at ASOS, told Post & Parcel, “Precise is another first for ASOS and a huge leap forward on our customer focused delivery proposition. Our customers love getting their deliveries quickly and tell us they want control and choice over how and when their parcels arrive. Precise gives them exactly that.”

This focus on the experience of a typically mundane feature like shipping time is what sets ASOS apart. Their ability to tailor the entire experience, from warehouse to customer delivery, is what has helped them maintain their popularity over the last two decades.

Stock items that appeal to various customer types

ASOS’s huge network of warehouses, suppliers, and manufacturers gives them access to an almost unlimited number of different items and styles. There are times when they stock between 2,500 and 7,000 new items every week. This is only made possible by the robust and efficient warehouse technology they’ve built out.

With a network of 175 different suppliers around the world, ASOS has access to a number of popular brands, such as Adidas, DKNY, Juicy Couture, etc., on top of ASOS-branded items. ASOS doesn’t focus on a single brand or price point. They offer a wide range of items that can appeal to many different customers

ASOS’s ability to attract different customer types based on brand loyalty, price, and availability builds on the infrastructure of their business to create a brand that appeals to the widest possible market. Being able to effectively support the needs of all these different types of customers is another way that ASOS differentiates itself from competitors.

ASOS experience page via ASOS.

Takeaways

ASOS has grown their fast fashion brand into the global powerhouse by investing their time and money in warehouse automation and supply-chain management.

► Invest in technology

ASOS provides same and next day shipping to every customer in their main markets. They are able to do this by investing in supply-chain and logistics technology to improve efficiency and speed. You need to make sure that your infrastructure can support business growth.

► Automate for efficiency

ASOS offers free next-day shipping on almost every purchase made before midnight. Thats possible only because of the investments they’ve made in things like warehouse automation and order tracking. Strive for efficiency in every process.

► Build a strong network

By working with suppliers around the world, ASOS is able to offer their own product as well as other popular brands. This network allows them to offer a wider range of products and appeal to a broader audience. A strong network means a stronger business.

► Don’t forget the customer experience

Everything ASOS does helps to build a better customer experience. Their free next-day shipping appeals to the fast fashion market, and their free returns help make it easy for customers to commit to purchasing from a direct-to-consumer brand without first trying out the products. The happier the customer is the more loyal they’ll become.

Sam Hollis
Sam Hollis is a writer at Jilt. When he's not writing about high growth eCommerce startups, he likes to play the piano and cook. See more his writing at his Contently page.

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