How eTailer ASOS takes a holistic approach to Retention Marketing

The efficacy of email marketing as a retention tactic continues to receive high praise and attention. While much deserved, don’t be seduced by visions of open and click through rates alone: truly effective retention marketing requires an integrated and multi-platform approach. ASOS (asos.com) is one company who understands this concept, though they prefer to call theirs a “holistic approach.”

Hailed as an internet phenomenon, ASOS is one of the largest online-only fashion retailers in the industry. The UK-based eTailer exploded since its domestic launch in 2000, transforming a niche online store into a veritable eCommerce powerhouse. With 14.8 million registered users as of December 2013, ASOS now ships to over 237 countries and territories with a mix of branded and own-label products.

Here’s a brief look into what makes ASOS’ retention tactics effective – and where there have been some missteps along the way.

Building Your Brand (Loyalty)

Customer loyalty and brand loyalty, as we’ve discussed previously, are two sides of the same coin: while closely tied, they are actually quite different concepts. Customer loyalty mainly refers to how often your customers come back (and how much they spend) based on your promotions and sales. Brand loyalty refers to how often they come back based on how they perceive your brand, whether that perception is through user experience, company reputation, or even just word of mouth. It’s probably no coincidence that ASOS has managed to create a significantly brand-loyal consumer base. In the fashion sector, brand name recognition is half the game, as high-fashion houses like Chanel and Burberry can attest; as a fashion retailer that sells its own-label products, emphasizing their own brand recognition and reputation is key to their long-term success.

ASOS has managed to do this by creating a seamless user experience for the consumer. The website is geared to cater to the customer’s personalized shopping experience, while simultaneously elevating the brand. From offering video clips of their models wearing garments (to make online purchases seem less risky) to personalized suggestions of products to “complete the outfit,” ASOS manages to create a shopping experience that feels high-level and full-service. Add in free worldwide shipping, a generous 2-month, no-questions-asked return policy, and personal touches in their emails, and it’s no wonder customers all over the world consider ASOS a legitimate, go-to fashion brand.

Reaching Your Audience

ASOS’ target demographic is “fashion forward twenty-somethings.” Such a distinction is important, especially when it comes to their email marketing approach. Here’s why, for the most part, it works quite well: It’s personal (but not creepy) As tech-immersive as the younger generation is, there is a healthy amount of distrust toward what is perceived as “creepy” overtures from companies, especially with online presence. While ASOS does send emails based on previous purchase history, it is not done in an overtly “we know you like this” way, but rather as a gentle nudge – just a happy coincidence that the particular sub-brand you like is on sale this week.

It’s on-trend (and therefore relevant)

Discussing and showcasing new fashion trends builds brand-based relationships, while conveniently providing new reasons to spend. Further, emphasizing the fashion know-how of their customers has the twofold effect of appealing to aspiring fashionistas – who then might immediately want to join in on the trend by purchasing – while elevating the brand as one that is cutting-edge and fashion forward.

It’s an experience (not a transaction)

By far the most important aspect of their email marketing strategy, ASOS sells itself as experience-based as opposed to purely transactional. Strong social media tie-ins, celebrity fashion looks and gossip blogs, and Pinterest-worthy content keep the customer engaged – and thus more likely to return.

Asos-Email

Here is an example of an ASOS email for a young male subscriber. They offer a reasonable discount percentage off and highlights a trend for wearing white. They feature both their brand and another retail brand in their product recommendations.

(Don’t Forget) the Bottom Line

We’ve discussed how ASOS successfully built up brand loyalty, which all companies could take a few pointers from. However, the learning lessons and takeaways regarding ASOS’ customer loyalty building strategies have a markedly different tone. Through deep discounts, special offers, and email marketing, ASOS has established customer loyalty. The only problem is, it seems they were too effective: sales went up, but at heavy cost to their profit margin, resulting in two profit warnings in a span of three months.

In many ways, the pitfalls of batch-and-blast email strategizing apply to discounting as well. While it’s important to maintain customer loyalty, mass discount campaigns end up eating away at your profit. The key to prevent this, as with email marketing tactics, is personalization.

This is where Retention Science can help. Our automated Retention Marketing platform aggregates your customer data, applies scientific machine learning and predictive algorithms, and profiles and predicts customer behavior. This leads to the delivery of personalized multi-channel communications that can determine the most relevant discounts to offer each customer in order to drive a purchase.

Perhaps a large portion of your brand-loyal costumer base only needs a rewards push to make that purchase, as opposed to the coupon-cutters who actively want the 30% discount. Even companies like ASOS, with quite effective retention marketing strategies, can benefit from a more personalized data driven approach.