A research on ASOS - British online fashion & beauty company - about its marketing activities and 3 potential A/B tests

1. Keqing Hong (Mandy)

2. Company Profile
Originally stood for AsSeenOnScreen, ASOS
is a British online fashion and cosmetic
retailer founded in 2000. The website sells
over 850 brands with its own clothing and
accessories lines, and ships to 196 countries
including the US. Its annual revenue is
￡2,573 billion (2019) with a net income of
￡1.307 billion (2019).

3. ASOS Marketing Activities - Social Media
One way ASOS uses to acquire customers is
through social media platforms such as
Instagram, Twitter, Facebook, and YouTube.
ASOS’s social media feeds focus on style
inspirations that usually feature influencers and
affiliates to encourage purchase. Products are
usually linked or searchable on their website/app.
There are also paid ads that are curated for
customers based on their personal preferences.

4. ASOS Marketing Activities - Affiliate Programs and Campaigns
ASOS uses their social media very strategically
with affiliate programs and social media
campaigns such as the #AsSeenOnMe hashtag
that encourages customers to post pictures of
products they purchased on ASOS.
ASOS Affiliate Programs include ASOS Insiders,which are a stylish group made up of employeesand outside influencers who have specialASOS-handle Instagram accounts where they share
outfit photos. ASOS also offers commissions tofamous influencers and bloggers if they shareASOS items on their social media handles.

5. ASOS Marketing Activities - Web / Mobile
ASOS’s official shopping site has a website
version and a mobile app. ASOS’s web
marketing efforts also include email
newsletters, which deliver personal
recommendations and sales/discount
news. A large proportion of sales in fact
come from the mobile app.
Source: ASOS PLC Annual Report and Accounts 2019

6. ASOS Marketing Activities - Print
ASOS Brand Magazine publishes high-quality fashion content in both print
and online versions, with shopping links attached to the online version.

7. ASOS launched the ASOS Fashion Discovery
Competition to search for emerging designer
brands. Consumers have the chance to vote for
their favorite emerging brands.
ASOS Marketing Activities - Events and Charity
ASOS Foundation provides infrastructure, training
and support to enable disadvantaged, young
adults reach their potential, through focused
projects in the UK, India and Kenya.

8. ASOS Marketing Activities - Summary
ASOS uses a wide range of marketing activities to acquire customers, both online and
offline.
Affiliate programs with influencers, social media hashtag campaigns, and events create a
sense of community and allow more exposure to the target audience. Email newsletters
also keep customers returning by using personal recommendations that are gathered
and curated from user data.
The print edition of ASOS Brand Magazine further exposes the brand to a larger audience
group that might not be active on social media. With covers featuring famous pop stars
and TV stars, it is hard not to capture the attention of millennials, who are ASOS’s target
audience. Consumers also would be more likely to support a brand with a good cause -
this is where ASOS Foundation serves its marketing purpose.

9. Marketing Activities - Marketing Cost to Acquire a Customer
CAC is calculated using marketing
costs and number of customers.
According to ASOS PLC Annual Report
and Accounts 2019, ASOS’s number of
active customers (having shopped in
last 12 months as of 31 August 2019)
was 20.3 million. The marketing costs
were ￡121.8m.
CAC = Marketing costs / no. of
customers = 121.8 / 20.3 = ￡6

10. Marketing Activities - Customer Lifetime Value
According to ASOS PLC Annual Report
and Accounts 2019, the average basket
value was ￡71.29; the average order
frequency was 3.56 times.
This means that the customer value in
2019 (the amount of money an average
customer spent) was 71.29 x 3.56 =
253.79 pounds.

11. Marketing Activities - Customer Lifetime Value (continued)
According to YouGov, 62% of ASOS’s customer base is
aged 18-34. ASOS’s target audience is aged between 16
to 34. Starting at age 16, an ASOS customer could start
purchasing from ASOS, even until they are older.
However, I think ASOS’s general style fits mostly
millennials aged between 18 to 30. I would estimate
that the customer lifespan is around 5 years,
considering the relatively younger style that ASOS
promotes and the existence of many competitors.
Thus, the estimate CLTV of ASOS is
253.79 pounds x 5 years = 1268.95 pounds

12. Marketing Activities - Customer Lifetime Value Conclusion
Overall, ASOS is a very viable company because the
estimate marketing cost to acquire a customer is only
￡6. Even if a customer only places one order on ASOS
in their entire life, the order would likely be over the
average selling price per unit: ￡23.34 (according to
the ASOS annual report.)

13. The Business Objective of
ASOS Website:
⭐To increase time of browsing,
sales, and frequency of orders
- The main page of their website
promotes their sale campaign:
extra 20% off sale, which
encourages customers to
purchase items at a lower price
- The website also inspires
styles, outfit ideas using
blocks with categories of
clothings/products , which
encourage browsing and
purchase

14. Website A/B Test Proposals
A/B Test 1:
Instead of showing latest sale
campaigns, show new clothings and
products in the first block of the
website (targeting high-value
customers with a higher income
level)
Hypothesis:
High-value customers with a higher
income level are more likely purchase
new items.
Instead of focusing on lower-priced
sales items, high value customers
with a higher income level value new
trends and styles and might be more
likely to browse through and
purchase new items because they
are new.

15. Website A/B Test Proposals
A/B Test 2:
Add “View All” option for clothing (the
current version does not have this
option)
Hypothesis:
Being able to view many items in one page
saves time for customers that are casually
browsing.
The “View All” option provides customers with
a quick glance and general idea of the items
ASOS sells, without having to browse through
them by category. This saves time for
customers, who are just browsing and not
looking for anything in particular.

16. Website A/B Test Proposals
A/B Test 3:
For images of clothings, add “quick view” option for customers to
look at different pictures of the item and add it to cart easily
instead of having to go to a new page (competitor example: Nasty
Gal)
Hypothesis:
Customers are more likely to add items to cart if there is an easier
way for them to take in information and decide.
Having to click on an item, open a new page just to view a product
and add it to cart is a hassle for online shopping. Imprudent
customers are more likely to add items to a cart if it’s easier for
them to do so, by being able to browse through the item photos
quickly and add them to cart easily.

17. Time it takes to run the A/B tests
According to SimilarWeb.com, the
estimate monthly traffic in March 2020 is
59,700,000. Thus, the estimate number of
daily visits would be 59.7 million divided by
31 days (March) = 1,925,800
According to ASOS PLC
Annual Report and
Accounts 2019, the
conversion rate for year to 31
August 2019 is 3.2%. Using
the Evan Miller model, the
sample size needed for
these A/B tests is 191,314.

18. Time it takes to run the A/B tests (continued)
Using the traffic data and Evan
Miller’s model, the % of a given day
needed to run the tests is Evan Miller
sample size divided by daily traffic:
191,314 / 1,925,800 = 9.93%.
This means that the A/B tests need to
be run for 24 (hours) x 9.93% = 2.38
(hours)