The online fashion retailer needs a serious rescue plan to reverse its declining sales. It’s betting on brand marketing by borrowing from the luxury and beauty space with its first-ever pop-up.
This week Asos opened its doors to its first pop-up – a milestone in the retailer’s 23-year history. The decision to meet its customers in the real world is part of a significant marketing shift at Asos that aims to breathe some life back into the brand.
Senior customer director at Asos, Dan Elton, declares that brands can only be built through experiences and not communications alone.
“If you look at the luxury space, and you look at the beauty space, which are categories that are highly tactile, highly aesthetic, emotionally driven purchases – no one ever needs a new luxury handbag they just want a luxury handbag,” Elton says. “Part of the way those brands do things, and the category norms are just to do cool stuff.”
The marketing team is eyeing cultural collaborations and experiential marketing and is seeking innovative tech to rebuild the Asos brand. The £30m brand pot is additional to the overall marketing spend, which last year was £195m.
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The investment is a recognition that the Asos brand has been struggling. The once-dominant online-only retailer has had to compete with new entrants like Shein and Temu, and has lost relevance with younger demographics.
According to its latest financial earnings, Asos sales are expected to drop by 15% in the upcoming financial year – higher than its 10% sales slump this year. Full-year losses (September to September) near £300m with the business forecasting that it wouldn’t return to profit till 2025.
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Elton admits there has been a “gap” between how Asos views itself internally as a “Fashion-focused business” and how it has presented itself externally to the world. Customer feedback often credits Asos for its “functional and operational” qualities like its speed of delivery, prices and ranges, Elton says. But the aim of the brand marketing strategy is to make Asos known for its “fashion authority” and “style and fashion differentiation”.
‘Asos Your Way’ is the first brand campaign from the new strategy. The full-funnel campaign which hands over styling to Asos customers spanned out of home, social and included an always-on influencer strategy.
‘Asos In Real Life’ pop-up
Asos In Real Life is a four-story immersive pop-up off Oxford Street that brings together fashion, beauty, food and music in partnership with brands like Charlotte Tilbury, Crosstown donuts and Marc Jacobs Fragrances.
To blend the physical with the digital Asos has teamed up with Snapchat where visitors can try out outfits using AR technology. There will be live DJs, panel talks, workshops, styling sessions and even a running club with New Balance. The space is open from November 23-26.
However, Elton is clear that the pop-up is not a signal that Asos is considering permanent physical presence. “This is a recognition that Asos as a brand has almost exclusively existed purely in digital environments,” and that “Gen Z audience looks for experiences that take them out of their screens.”
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In global markets where brand awareness isn’t as high the pop-up strategy will be more about brand trial and customer acquisition. “In the UK it’s a blend with experience for experience sense and entertainment,” he adds.
Over-reliance on performance
Asos had been spending 90% of its marketing budget on short term channels – primarily performance – which Elton now needs to rebalance.
“The bigger challenge for us is building on our effective performance marketing program that we’ve got, but then also building out a primary marketing activity that is highly additive, and allows us to build kind of rich emotional connections with consumers,” he says.
“The first thing we hear from customers is that they want to hear from us more and that is because most of our advertising has been performance.” Despite the volume of Asos advertising customers are failing to recall any of it, Elton acknowledged.
“Going forward, we want to build a much stronger brand affinity with our customers and the pop-up is the first step in that,” he says. That said performance will stay at its current levels, but brand marketing is additive.
Elton will be hiring more internal talent, especially in the brand marketing space, and will be adding new agencies to its roster with specialties in experiential and cultural and guerilla marketing.
“The marketing team has done a lot of cool stuff over the years, but maybe not of late,” Elton says. “Part of rebuilding the brand is rebuilding confidence in the brand internally – one of the most exciting things is just watching the team and seeing the team’s energy.”