FT Live: Future of Retail 2024 review: fast fashion giant Asos drops anchor for digital marketplaces

A ‘fireside chat’ with Asos was held at the FT Live: Future of Retail 2024 event this week on 17th September at Convene in the City of London. This covered the digital marketplace model that the pureplay has embraced, as it seeks to expand and grow its customer base. 

Chris Peduto, Head of Partnership Management at Asos, explained that they participate in digital marketplaces because third party sellers can augment their own branded clothing range, which makes up 50% of Asos’ business, without the brand owner tying up capital in excessive inventory.

The examples of Amazon and Shein have shown what is possible for retailers in this area.  

“Making decisions about clothes six to nine months out means it is subject to weather risk and discounting,” said Peduto, alluding to what happens if the sunshine you were expecting doesn’t show up.

Guessing the clothing trends that will hit in any season is also notoriously hard, so having the flexibility to include others in your e-commerce platform and vice versa, plus undertake any associated marketing campaigns is useful.

Additionally, new designs can be tested in a small way, perhaps in a targeted arena, before scaling up production if it’s a hit. 

Commenting on the advantages of the marketplace model, Peduto said: “We can sell Asos branded products on other digital marketplaces, clear down old stock by working with a TikTok shop, and improve our wholesale selling as well,” while stressing that marketplaces have helped make Asos more responsive and efficient.

There are two models they use: 

• Hybrid model: means Asos do still place their own orders six to nine months out with suppliers and take that stock in for use on their online platform. The offer is supported by its own studios to aid online storytelling but they’re not restrictive in their approach to market. 

• Dynamic mixing: means Asos can still partner with other brands on their own platform and vice versa, ensuring they are open to fast fashion trends, new marketplaces, regions and opportunities. It not all just about their own online or in-app offering.

This flexible approach can help retailers, of whatever type, to improve their online presence at the top of search engines, in apps, on socials and to generally be more responsive, agile businesses on the front-end.

Back-end flexibility is also possible if you look at the dropshipping fulfilment model for online retailers that allows them to keep no stock and empowers third parties to make and ship goods purchased on owners’ platforms on their behalf.

This was discussed at the FT event by Simon Dyer, Regional Vice President, UK/IE and Nordics, Mirakl, who explained that Asos is a customer for some of its services, as is Kingfisher among others.

Dyer stressed that if your business follows a more front-end marketplace approach then “personalisation is easier with this model”. Marketplaces allow personalisation.   

According to Dyer, the key benefits of a digital marketplace approach are:

• More flexibility

• Faster turnaround times

• Cheaper operating costs and less risk.   

“Think about your [re]sellers by creating an experience for them on your platform, as well as your own direct customers and their CX. Considering both sides of the coin is vital in driving business forward under a marketplace approach,” advised Dyer.

He also separately pointed to role of technology in all of this. Particularly AI which can drive personalisation, targeting, logistical efficiency and control.

But also aid the front-end by rewriting stories in different languages, augmenting pictures to reflect local norms and provide enhanced user experiences.

Peduto concluded that: “Marketplaces aren’t a silver bullet. But the flexibility of them is useful.”  

2024 RTIH INNOVATION AWARDS

Online retail is a key focus area for the sixth edition of the RTIH Innovation Awards, which is now open for entries.

The awards, sponsored by CADS, 3D Cloud, Retail Technology Show 2025, and Business France, celebrate global tech innovation in a fast moving omnichannel world.

It’s free to enter and you can do so across multiple categories.

Key 2024 dates

Friday, 25th October: Award entry deadline 

Tuesday, 29th October: 2024 shortlist revealed

30th October-6th November: Judging days

Thursday, 21st November: Winners announced at the 2024 RTIH Innovation Awards ceremony, to be held at RIBA’s 66 Portland Place HQ in Central London.