When Fashion Is The Way To Run Fast Fashion

Young consumers are becoming more and more fastidious, and the trend of fast fashion retailing has spread to the Internet.

ASOS, a British super fast fashion supplier who has been rushing all the way, is also facing bottlenecks.

In the latest quarter ended February 28th, ASOS sales increased 13% to 640 million pounds compared with the same period last year, while sales in the first half of the fiscal year increased 13% to 1 billion 281 million pounds, although the double-digit increase has continued, but the growth rate has slowed sharply compared with 25% in the same period last year.

Investors worried after the release of the earnings report. ASOS shares fell 7.34% to 29.79 pounds, and the market value is about 2 billion 500 million pounds.

2019 in the first half of fiscal year, ASOS sales in the UK market increased by 16% to 481 million pounds, while sales in other parts of Europe increased by 15% to 402 million pounds. Sales in the US market slowed to 8% to 161 million pounds, while sales in other parts of the world increased 8% to 236 million pounds.

During the reporting period, the total ASOS orders increased by 15% to 17 million 300 thousand over the same period, the number of active customers increased by 16% to 19 million 500 thousand, and the number of websites visited increased to 170 million, but the average selling price dropped 1%.

In fact, as early as last November, ASOS had released a signal of slower growth in performance and reduced its annual revenue growth from 20% to 15%.

Chief executive Nick Beighton said in the earnings report that the group's current business in France, Germany and the United States is facing major challenges, especially when Atlanta's warehouses are fully operational and still unable to meet the needs of the US market, but consumer demand far exceeds ASOS's expectations.

Nick Beighton also revealed that ASOS is trying to improve profitability by increasing the sales of its own brand series. At present, the proportion of ASOS DESIGN products in total sales is 35%, and the gross profit margin of the group in the second quarter has increased by 40 basis points.

In particular, he pointed out that ASOS's own cosmetic brand is small, but its growth rate is 4 times that of its overall performance. Its brand Colusion launched in October last year has been positively responded by consumers.

In addition to makeup, ASOS's own brand also includes ASOS DESIGN, ASOS EDITION, ASOS WHITE and ASOS 4505. In February this year, ASOS also launched a new home series, which is mainly divided into three categories: Eclectic Luxe, Eclectic and DESIGN. It covers porcelain, wall mirrors, carpets, products on the bed and lockers, and sells at a price of 8 pounds.

Some people have pointed out that with the fast fashion dependence on the growth of the clothing industry gradually slowed down, whether it is the traditional fast fashion Zara, H&M or fast fashion e-commerce ASOS began to regard home as a new breakthrough point.

Andrea Fenn, founder of Fireworks, a digital consultancy, says consumers are becoming more and more selective in the e-commerce market. Brands will also be more difficult to catch consumers' attractiveness, which will be a big challenge for ASOS.

ASOS, the largest shareholder of Denmark, Bestseller, a subsidiary of Denmark, suddenly sold about 2 million shares of ASOS shares in Numis Securities in September last year, with its share holdings below 25%.

For the 2019 fiscal year, ASOS maintained its previous performance expectations in the earnings report, the annual sales growth was about 15%, the gross retail interest rate would be reduced by 150 percentage points, the pre tax profit margin increased by 2%, and the total expenditure stood at 200 million pounds.

After experiencing the rapid growth of the past 5 years, the fast fashion providers represented by ASOS seem to have reached a new turning point.

ASOS, founded in 2000, is the abbreviation of "As seen on screen". The practice at the beginning is the same as that of the domestic Taobao sellers, that is, the direct sale of the stars and the same funds. The platform can find new trends in the morning, and immediately use the existing single products to match the similar commodity mix, and then update the website at 3 p.m.

At present, ASOS is the largest fashion business in the UK. It was officially listed on the London Stock Exchange in 2001. After its profit in 2004, its business has covered the whole world, including Russia, the United States, Germany and France. However, because of its failure to adapt to the situation, ASOS withdrew in three years after entering China in 2013.

Apart from its own brand, 40% of the products on the ASOS shopping platform come from all kinds of famous fashion brands.

ASOS has quickly become one of the global young consumers' favorite e-commerce platforms through localized applications and official website, as well as up to 85 thousand kinds of rich products and 5000 new weekly styles.

In order to meet the needs of consumers in a timely manner, ASOS also has warehouses in Britain, the United States and Europe, which will sell different brand products to different regions.

In addition to costumes, ASOS launched its first original magazine in 2007. It has become the most popular fashion magazine in the UK, and over 450 thousand copies are nearly two times the volume of local VOGUE.

The magazine is also being launched as a supplement to ASOS shopping platform in France, Germany and the United States to help consumers better understand the culture of clothing brands and to display popular products this season.

For many years, ASOS magazine's first line stars include Jennifer Lawrence and Telles.

In the list of 2018 fashion e-commerce websites released by trend data provider SEMrush, ASOS replaces the most popular fashion business website of British consumers, ranking second in the global list.

The list also shows that the highest fashion brands in the UK are New Look, TopShop, Boohoo and River Island.

ASOS has also been rated as the most useful e-commerce website in the UK. 75% of consumers are satisfied with the shopping experience on ASOS website, followed by Asda and Argos, while Amazon and Boots rank fifth in 69% place.

Retailers with more than 60% scores also include M&S, New Look, Zara, H&M and John Lewis.

However, the larger the scale of business, the more problems will arise.

In 2017, due to the sterling weakness caused by Europe, ASOS lowered its product prices in the United States and Russia and tried to seize more market share in the fierce market competition, and the fire of multiple warehouses also led the retailer to reflect on the problems in its supply chain.

In 2018, ASOS ushered in a comprehensive pformation. First, the former chairman Brian McBride left in November 29th and was replaced by Adam Crozier.

Although Adam Crozier has not been engaged in fashion related industries before, it has rich experience of board of directors, and has served as director of many groups such as Saatchi&Saatchi, ITV PLC and so on.

In December of the same year, ASOS was promoted to supply chain director Mark Holland as chief operating officer. Besides being responsible for the daily operation of ASOS, Mark Holland will also have the management power of the pformation project of Holland branch.

As the director of supply chain, Mark Holland has been responsible for supervising the global trade of ASOS, as well as the management of customer service and supply chain departments in recent years.

In terms of operation, ASOS extended the "first delivery, post payment" service, which was launched in Sweden three years ago, to the whole Nordic region. Consumers can pay within 14 days after delivery, so that consumers can make payment after trying out the products ordered and making careful choices.

It is reported that ASOS is also increasing investment in technological innovation to further consolidate its position in the field of electricity supplier.

In terms of products, ASOS launches model photos of different sizes in the same clothes to help consumers better choose products, and for the first time in their own brand advertisements, models with stretch marks are first introduced. It is emphasized that models and skins will not be processed in the later stage, so as to keep the most realistic appearance of the models, so as to narrow the distance between consumers and ASOS.

It is reported that ASOS intends to use AR augmented reality technology to display products in the future.

According to this analysis, ASOS's frequent initiatives over the past year are seemingly normal marketing promotion measures, but the ultimate goal is to attract traffic and increase sales. The retailer has already sniffed the urgent and pressure of market competition.

According to fashion headline data, the Inditex performance of the Zara parent company, which has long dominated the fast fashion industry, has been slowing down since the second half of 2016. In the 2018 fiscal year ended January 31st, the group's sales growth slowed to 3%, 26 billion 100 million euros, an increase of 4% compared with sales, and net profit rose 12% to 3 billion 400 million euros, the worst growth rate in the past 5 years.

H&M group's sales in the fiscal year ended November 30th also recorded an increase in the number of units, up 5% to SEK 210 billion 400 million, gross profit margin of 52.7% and post tax profit of SEK 12 billion 652 million.

In addition, over the past year, Britain's fast fashion Topshop parent company Arcadia, New Look, French Connection, LK Bennett and House of Fraser have also filed for bankruptcy protection or been sold for sale, and it is impossible for them to not be vigilant, even though it will not be negatively affected by the decline in physical retail business.

As the biggest competitor of ASOS in Britain, Boohoo also felt the crisis in the market. After announces that the sales volume of Christmas shopping season did not increase significantly last year, the group's share price fell by 20%.

In February this year, the electricity supplier announced that it was no longer using wool material under the persistent protest of PETA PETA, but then returned to it. It was questioned by the British Daily Telegraph that it was just a publicity stunt of Boohoo because Boohoo did not sell any wool containing goods.

What makes sense is that Boohoo has been considered to have the potential to become the next Zara.

The retailer was founded in 2006 by Mahmud Kamani and Carol Kane. It mainly sells clothing, shoes and accessories of its own brand. The core consumer groups are 16 to 24 years old. They have bought the Prettylittlething of the fashion business and the Nasty Gal of the United States.

The Kamani family has been in the clothing business for over 30 years, and has been a supplier of brands such as Primark and Topshop.

No matter what industry, once the structure of consumers is irreversible, all past experience may be cumbersome.

For a long time, the fast fashion business model has made the brand of Zara and ASOS become the dark horse breaking the traditional fashion industry rules. The combination of high-end design and low price has been invincible in the past 10 years, and the efficiency of various links has promoted the shopping frequency of consumers. The change of consumers' preferences nowadays is not only faster and faster, but their concepts are also changing.

Another industry believes that with the fast fashion profit space being compressed, the peak of this resource and manpower intensive industry is about to end, and may lead to a strong objection from consumers, just like the attitude towards selling coffee cups and plastic packaging.

According to the latest report released by fashion agency Thredup, 25% of female consumers said they would no longer buy fast fashion clothes from 2019, most of them young consumers.

Of the more than 1000 women surveyed by Thredup, 58% thought that waste should be reduced this year. Another 42% said they would reduce waste by buying second-hand goods.

The report also showed that 40% of the millennials surveyed said they would stop buying fast fashion brands, and 54% of the Z generation respondents aged 18 to 21 decided to buy higher quality products.

Some analysts believe that although the number of samples collected by Thredup is not large, the results of the report still have some reference value, at least we can confirm that some young consumers' fashion ideas are indeed undergoing subtle changes.

At the same time, fast fashion's middle and low end apparel industry has become increasingly crowded.

Before, WAL-MART, Amazon and other retail giants accelerate the penetration of the fashion market, followed by the emerging fashion bloggers who grow up in the social media era. The constant competitors are refreshing the consumers' awareness of "high quality and low price". The strong supply capabilities of these new competitors and the fans foundation become the sword of Damour Chris, hanging on the top of ASOS, Boohoo and other fast fashion business.

According to the latest research report released by Coresight Research, Amazon, which has only 6 years in the fashion industry, has successfully defeated WAL-MART, becoming the most popular clothing retailer for American consumers.

The report shows that of the 1732 American adults surveyed, 65% of respondents bought clothing or footwear products on Amazon's website. Clothing surpassed books, cosmetics and electronic products and became the most popular product of Amazon's website.

In order to better sell the fashion products, Amazon launched the Amazon live broadcasting function in February this year in conjunction with the US TV shopping group QVC.

In 2018, Amazon's revenue reached US $232 billion 900 million, and its profit exceeded US $10 billion for the first time. The number of Prime members has reached 101 million. 62% of US users have become Prime members, with an average cost of US $1400 per year, and non Prime members spend an average of US $600 per year.

Foreign fashion bloggers and domestic Taobao sellers have become another battleground of fast fashion. Their joining has made the competition between the middle and low end market become more and more fragmented.

Take Italy fashion blogger and designer Chiara Ferragni as an example, the TBS Crew Srl of its personal name brand belongs to sales of about 6 million euros in 2017, an increase of 82.5% over 2016.

The personal brand launched by members of the Kim Kardashian family is also popular among the younger generation. Kylie Jenner has become the youngest self-made billionaire in the world with its personal make-up brand Kylie Cosmetics. Its valuation is over $1 billion.

In China, the "net red economy" represented by Zhang Da Yi and Sydney has also attracted worldwide attention.

A week ago, successfully hatched Zhang Dayi, bugs, Daikin and other net red net business incubator Hangzhou such as Han Holdings has formally submitted IPO applications on the Nasdaq Stock Exchange, estimated to raise 100 million to 200 million dollars.

As one of the most representative net red, the annual income of Zhang Da Yi, which has about 10000000 fans in micro-blog, is more than Kim Kardashian. The sales volume of Taobao stores in tens of thousands of hours within two hours is unimaginable.

This kind of net red shop has a new appearance every month. Before the clothes are formally put on the shelves, they will be released half a month in advance, or even earlier.

They estimate sales according to the feedback of fans, and then place orders with factories, which can more accurately target the needs of target customers than ASOS, a branded fashion dealer.

Although China's Taobao network has been criticized for its copycat plagiarism like Zara's fast fashion brand, its advantage over fast fashion is the premium of net red personal brand, not just the product itself.

Loyal consumers who follow Taobao behind red often regard net red as their opinion leader, while Zara's consumer loyalty is relatively low.

The fashion headline has written that the supply chain is the key factor that influences how fast fashion becomes faster. All the decisions that help improve efficiency will become the key for retailers to take the lead in the market. If the winning way of luxury goods is "brand premium drive", the fast fashion survival way is still "efficiency driven", but it is worth noting that the market is undergoing drastic changes, which can make the brand persistent luminescence still be the product.