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Asos growth too reliant on discounts, analysts warn


Perhaps the root cause of discounting is over zealous buying? With targets to achieve, I suspect there is a lot of stock waiting to be purchased, forcing discounting. Particularly with seasonal items. Let's be honest, there are not (m)any businesses who target to sell less... and as competition increases, so does the amount of product available. While it works for food (we can all eat more), you can only wear one dress at a time! So clothing retailers just get left with more unsolds and higher returns. Asos has certainly helped the consumer get better prices. Though to the detriment of the industry, now and in the future. Lower margins for everyone means less investment as a whole. For the record, I expect Amazon and supermarket multiples will make it more competitive yet. The solution? Better understand your customer... Better target what you sell them (so it doesn't come back)... Be different by doing 'customer service' properly. Then use the data and invest in those who understand the customer to make more informed buying decisions.

Posted date

11 June 2014

Posted time

5:13 pm