Asos must tackle brand criticisms to reignite profit

When Asos offered Twitter users the chance to win a £500 voucher this week if they followed its account and tweeted what was on their wishlist with the hashtag #ThanksItsAsos (no, we don’t get it either – not even with an apostrophe in the right place), it probably wasn’t expecting a barrage of tweets about poor working conditions, unfair pay and contracts, monitored toilet breaks and pollution.

But, amid the thousands of screenshots of wishlists, that is exactly what happened. Because if anyone loves the modern-day equivalent of lobbing rotten vegetables at someone in the stocks – a good old corporate hashtag hijack – it’s Twitter.

Many of the less complementary tweets draw attention to accusations of poor working conditions endured by Asos warehouse employees, while others highlight the detrimental impact fast-fashion is having on the environment.

“Fast fashion producers that try to trend on Twitter to encourage greater consumption of low-cost product in 2019 are playing with fire,” one tweet reads.

Another says: “Which clothing retailer announced huge profits just months after being exposed for treating its workers appallingly?”

A few years back, when Asos was the darling of fast fashion and consumers were less clued up about the environment and poor working conditions, this is something Asos would have been able to get away with. But in 2019, when sustainability dominates the news agenda, Asos can’t expect to walk out waving its big e-voucher and not be called out.

In fact, this is the second time in a few days that Asos has faced backlash from social media users.

On 20 July, Asos posted a photo of a man wearing a lime green polo shirt with the caption: “Cropped polo shirts, discuss!”, which has been criticised for inciting homophobic comments.

One user tweeted: “Asos keep doing this v specific thing where they make and sell clothing quite clearly for queer men then get their straight customers to laugh at the products in the comments??? fuck off??”

Interestingly, in response to a tweet that said the top was “Bloody awful!”, Asos responded with: “We’re sorry to hear that you feel this way. If there is something we can help you with, please DM us, confirming your ASOS registered email address, 9 digit order number, full name and a brief description of your issue and we’ll happily look into it for you.”

Either Asos’s AI is very confused or its customer service team has turned into copy-and-paste bots.

This might all be criticism Asos could ignore if its business were performing strongly. But this week Asos issued its third profit warning in less than a year.

The first, last October, was blamed on “unprecedented levels” of discounting around Black Friday and “fragile” consumer confidence, while the second just before Christmas came as the result of weak consumer spending. The most recent is the fault of a glitch in the rollout of European and US automated warehouses.

Asos boss Nick Beighton insists these are short-term problems that don’t “change the opportunity ahead for us, which is huge”.

But what this triple profit warning shows is even online retailers are not immune from the challenges their counterparts on the high street face. High discounting and low consumer spending on clothing impact businesses whether they are only-only or bricks-and-mortar. Ecommerce alone does not equate to success.

Asos benefits from a strong brand and high awareness among its key audience, but maintaining that strong brand will be key as competition increases and opportunities for growth slow. While the likes of Boohoo and Missguided seem to ‘get’ their audiences – as evidenced by their sponsorship of TV ratings phenomenon Love Island – Asos has lost some relevance in recent years.

While this by no means signals the imminent death of fast fashion – Asos is, in spite of its profit warnings, still making making millions a quarter in profit and growing sales, as are its rivals – it is indicative of the way things are moving and shows these fast fashion giants are no longer as invincible as they once were.

As the online clothing market matures, those hoping to stay ahead will need strong brands. There are some obvious operational improvements Asos needs to make, but it also needs to start dealing with shoppers’ concerns around sustainability, workers’ conditions and inclusivity to ensure it remains a key competitor in the fast-fashion pack.