Asos warehouse woes highlight operational complexities beyond the buy button, Brightpearl

Shares in Asos sunk yesterday after the pureplay said that sales growth in the US and Europe had been held back by problems at its warehouses.

The retailer now expects to report profits of £30 million to £35 million this year, well below the £55 million forecast by analysts and only a third of the £102 million it reported in 2018. Asos Chief Executive Nick Beighton said overhauling its US and European warehouses had taken longer than anticipated, affecting its "stock availability, sales and cost base in these regions". He insisted the problems would be resolved by the end of September.

Pinning recent struggles on operational issues comes as no surprise to retail operations platform provider Brightpearl, which points out that this is the oft-ignored backbone of the entire retail operation. While most brands are aware of everything they need to do on the front-end, few seek to address the operational complexities that lie beyond the buy button, argues Ant Payne, VP Marketing at Brightpearl.

“As a brand grows, its multi-channel operation becomes ever-complex and difficult to manage, even for a brand with the resources of Asos. When you’re operating in different markets and you’re scaling quickly, you have got to have the right retail operations in place to respond effectively. Without those mechanics, for example, to handle inventory management, shipping and logistics or for more customer-facing support, the business is quickly going to run into problems like Asos has experienced,” says Payne.

“You cannot build a consumer-focused strategy on top of unstable foundations. I would advise retail brands to consider the feelings they want to create for customers every step along the way and use intelligent retail technology to remove any potential bottlenecks in your operations - that's the real secret to success, in our view,” he concludes.