Can Asos boss José Antonio Ramos Calamonte really put the retailer back in fashion?

On the same day that Next upped its full-year profit guidance for the fourth time this year, Asos posted a loss before tax of £296.7m and a 10% drop in group sales to reach £3.54bn, throwing into sharp relief the decline of the one-time darling of the pureplay fashion space. 

Soon after his promotion to chief executive in June 2022, Ramos Calamonte unveiled four strategic cornerstones to put the business back on track after it swung into the red amid what he described as an “incredibly challenging economic environment”.  

More than a year on, the brand is still facing challenging conditions. While being honest about the fact that this isn’t going to be as fast a turnaround plan as first anticipated, Asos said that it expects a “return to growth with EBITDA margin around pre-Covid levels” by 2025. 

After Asos pledged that its focus for 2024 will be a shift “back to fashion”, Retail Week explores what this will look like and whether it will be enough to return the brand to its glory days.

Product priorities  

A key element of Asos’ strategy to shift “back to fashion” comes down to the products on offer. 

Speaking of the importance of product curation, Ramos Calamonte says Asos will prioritise its offer rather than bolster its brand portfolio. 

“We don’t have a target in terms of the number of brands we offer, we want to just make sure we offer the best curation for customers,” he says. 

“That means that sometimes we are going to add a brand but we are going to add a very limited amount of [product] options from that brand. It is not brands that count for us, it is about the options.”

He adds that Asos is also focused on cleansing old stock each season so customers are greeted with the new items as soon as they shop. 

Investec research analyst Ben Hunt says the key selling point for Asos historically has been the mix of products and how it showcases them, and this remains what differentiates it from the likes of Shein and Boohoo.

He says: “Asos naturally does a better job curating its range with the own-brand and the third-party offer. They sit nicely together.”

Hunt adds that with refined product curation and the right combination of own-brand and third-party products on offer, Asos has the ability to stand out from the crowd moving forward.

Mixed price points

While exciting consumers with its product offer is evidently at the top of Asos’ priorities, Ramos Calamonte emphasises that price points are also at the front of his mind.

As fashion retailers continue to attempt to win consumer spend during the cost-of-living crisis, the Asos boss notes that he has seen shoppers opting for lower price points recently.

While fast-fashion giant Shein continues to triumph when it comes to low prices, Asos is relying on its mix of price points to win the hearts of a wider range of shoppers.

“We are doubling down on the customer experience, making an effort to make the whole journey more inspirational… We are totally sure this is a winning formula”

José Antonio Ramos Calamonte, Asos

“We offer a very wide range of different price points and that is one of the beauties of our formula,” says Ramos Calamonte.

“We see that the cost-of-living crisis is having an impact on customer behaviour, on the returns front, as well as with prices and we’ve seen how some customers now are more prone to return than before.

“Our answer to that is our flexibility, the capacity to provide them with competitive fashion. As we always say our ambition is not to be the cheapest but to offer them the most exciting fashion at a competitive price.” 

If Asos can succeed in exciting shoppers again and putting the brand front of mind, its variation of price points might just be its golden ticket to appeal to Gen Z, Gen Alpha and millennials seeking different price points simultaneously.

Marketing matters

Having mentioned several times its bid to “excite” shoppers again, Ramos Calamonte admits that one fundamental area of the business where Asos has “work to do” is its marketing. 

He said: “We are very confident we have the right team, we have the right ability and we are going to do it, but this is where we really need to prove ourselves.” 

GlobalData analyst Louise Deglise-Favre says that a narrow focus on Asos’ marketing efforts would boost its brand visibility and give it a more competitive edge against fellow fast-fashion giants.

“Shein has been so successful partly because of its social media and TikTok and it has blasted its presence everywhere. I’m not saying Asos should do the same thing, but I do think it needs a good marketing campaign,” she says. 

“It could either be a campaign with a talent that everyone knows and relates to, or maybe a collaboration that would elevate the brand.” 

Despite Ramos Calamonte being passionate about Asos’ “solid” strategy and turnaround progress, making waves with a bold marketing campaign could really open the doors for Asos to be seen as cool and aspirational in today’s fashion market.

Nailing customer experience

Customer interest in the Asos brand has declined in recent years and Asos is certainly not alone when it comes to refocusing on providing a “seamless customer experience” in a bid to win people over. 

Former Asos boss Nick Beighton said earlier this week that it has been a vital part of his role as chief executive at Matches to sharpen how the brand shows up for its customers. Beighton emphasised the importance of ensuring “every part of the customer journey is unmistakenly Matches” as part of the retailer’s turnaround strategy. 

As Asos also doubles down on its customer experience, Ramos Calamonte highlights that if it can nail the customer experience for shoppers, it remains “absolutely possible” for Asos to regain the hearts and minds of its core customers.

“When Asos started out there wasn’t anything else like it… the competition was less fierce. It really has to justify its fashion credentials in the future”

Maureen Hinton

He said: “We are doubling down on the customer experience, making an effort to make the whole journey more inspirational and making sure that we support that with the right cost structure. We are totally sure that this is a winning formula.”

Hunt emphasises that ensuring the customer experience is frictionless for shoppers is key to the future success of Asos. 

“You can put an outfit together and Asos can do that for you by suggesting you pair products but you’ve got to make sure it is a very seamless journey when you do that,” he says. 

“Their proposition is that they are a multi-brand one-stop shop, rather than going to Boohoo or Shein to try and piece outfits together with third-party products, you’ve got it all in one place.” 

With the advantage of offering shoppers the chance to create outfits across various brands, the improvement of Asos’ customer experience is likely to significantly boost its brand popularity and competitive edge.

Essential execution

According to retail analyst and consultant Maureen Hinton, the strategy Asos has set out is the right one and it does identify the problems it is facing. Despite her confidence in the brand’s turnaround, she admits it is unlikely to be a quick fix.

“It is going to take a while to implement because it has got a lot of stock to get rid of and it has really got to re-establish itself as a fashion player.

“When it started out it was a standalone, there wasn’t anything else like it. The competition was less fierce and it was in a way a trialblazer. It really has to justify its fashion credentials in the future and I think that is going to be a difficulty.

“That investment in marketing and really bringing it to the top of mind with the fashion-focused customer is going to take a while. What Asos is doing is good but it is the execution that is going to produce the results.”

While it is unlikely to be a quick process for Asos, if it can successfully refine its product offer, balance its price points, improve the customer experience and boost its marketing efforts, it has every chance of reinventing itself as a pureplay fashion leader.