U.K. fast-fashion retailer Asos is upgrading its beauty offerings and experience over the next year. It’s a response to a quarantine-driven boost in beauty sales, as well as to fashion’s uncertain future.
Asos launched a beauty and grooming category in 2004, which rebranded as Face and Body in 2017 in order to be genderless. At the time, it sold 110 brands, which accounted for 1% of its global net sales. Now there are approximately 240 brands including The Ordinary, Olaplex and Frank Body, and the category accounts for 5-10% of global net sales, said Alex Scolding, Asos head of buying for Face and Body. Asos’ core customers are 16- to 30-year-old shoppers. The retailer has remained a popular destination for beauty in the U.K., as the category remains fragmented there and Sephora and Ulta are not present. According to Asos’ 2019 annual report, 12.8% of the company’s sales came from the U.S.
On June 29, Asos added Charlotte Tilbury to its site via a three-month digital pop-up; it is the first time Asos is testing out this kind of pop-up strategy. Thirty-five Charlotte Tilbury products are available, predominately makeup and less expensive, travel-size skin care. In addition to sales, Asos will evaluate the increase in new customers, shopping engagement rates, and social listening and buzz. After the pop-up, Asos aims to sell the full Charlotte Tilbury assortment, said Scolding.
“One of the reasons why we trialed with a pop-up concept is to make sure that the customer, who is quite young and [price conscious] can stretch into those luxury price points. But Charlotte Tilbury has already proven that her brand and products are universally loved,” she said.
While Asos has historically experienced incremental growth in face and body category sales, coronavirus has accelerated the growth and shifted what customers are purchasing. People are purchasing more nail care, for example, which has grown 800% year-over-year, said Scolding. Global face and body category sales have grown 200% year-over-year. Asos has also adapted to changing trends by adding hair dye and hair removal to its offerings since March.
“Growth in e-commerce will be accelerated by the [coronavirus] experience people are having now,” said Dean DeBiase, Revieve beauty technology consultancy chairman. “The percentage of online commerce has been under 15% in the U.S., whereas in a place like China it is 44% and growing. This acceleration is going to have a long-term impact as more people are now more comfortable ordering online with direct delivery or curbside pick-up.”
But despite the boon to the beauty category over the last four months, Asos (like all of fashion) has suffered due to coronavirus. According to its half-year earnings from April, revenue increased by 21% to $2 billion, but group sales declined by 20-25% in the three weeks prior to the quarter ending as countries outside the U.S. were first impacted by coronavirus. Even prior to this, Asos, as a fast-fashion retailer, has had to compete with the likes of Boohoo and Fashion Nova, which has driven down its profitability, according to previous Glossy reporting.
But another silver lining for Asos’ beauty category due to coronavirus is that the beauty industry’s 3-year-long focus on omnichannel has now shifted to pure-play e-commerce retailers, said Scolding. That puts Asos in a strong position to scoop up premium brands and create a stronger experience. Asos will add virtual try-on and peer-to-peer product reviews over the next 6-18 months. Scolding said she aims to make the face and body category one of the retailer’s largest categories, based on the number of brands and products she plans to on-board over the next 12 months, though she declined to state sales growth goals.
“We need to first establish ourselves with all the big brands. That’s the most important thing: establishing those relationships with brands, making sure that we are [enhancing] assortments and ensuring that we are meeting all of the customer’s needs,” said Scolding. “We’re introducing more premium brands and more accessibly priced brands, and we’re broadening all of these categories. “