Asos considers Australian warehouse
An Australian distribution centre could be on the cards forAsos, though international director, Shaun McCabe, has told Inside Retail PREMIUM that it is still a while off.
Outside of its main DC in England’s Barnsley, which is the size of six football fiends, Asos has just one other DC – in Ohio in the US.
McCabe says that while all product for Asos’ Australian customers is currently shipped from the UK, this may not always be the case.
“At some point it will make sense for us to have a warehouse here,” he said.
In the US, around 20 per cent of orders are fulfilled locally, with the DC primarily used as a returns facility. All returns are consolidated, repackaged, cleaned if necessary, and used to fulfil future orders.
“It’s important, and I can see us doing the same thing for Australia, rather than sending returns all the way back to the UK.
“Let’s just consolidate them and think about how to fulfil Australian orders using returns. At some point, we’ll move forward, so rather than just returns, we’ll start holding fast sellers.
“That’s the way we’ll get to even faster delivery, but it’s some way in the future. I would say it’s in the five year plan, we have to be thinking ahead.
“I hope we can do the returns part more quickly than that, but that’s the logical next step. It’s slightly more difficult in Australia than the US, and that’s because the percentage of returns in Australia is a lot lower,” he said.
Not only is shipping from a local warehouse quicker, it saves the business around 6 pounds per order when shipped from the Ohio DC to an US address.
Australia has a returns rate of 15 per cent, while the US sits at 25 to 30 per cent returns. The lowest globally is Italy, with six per cent, while Asos’ German customers return a whopping 50 per cent of all purchases.
For Asos, Australia is now considered a mature market, making up 10 per cent of the total business – the second largest market outside of the UK.
McCabe declined to disclose exact growth figures for the Australia, except to say that it is in the double digits. In terms of size, however, Germany is hot on Australia’s heels and is expected to take over soon, with more than 100 per cent year on year growth.
Other markets of similar size to Australia are the US and France.
In Australia alone, Asos sells one item every six seconds and in 2013 was the most googled fashion brand in the country. It ships four 747 jets worth of orders to Australia each week.
The Australian office, in Sydney’s Surry Hills, houses a team of eight, predominantly focused on local marketing and business analytics.
“It’s really important for us to have a local presence because of the nature of the proposition. We need to have someone local with expertise in the market and the customer, feeding all of that insight back to our central teams in London to ensure our global strategy is taking into consideration the specific requirements of the Australian market,” said McCabe.
A small editorial team is also based in Australia to create bespoke content for the local website and ensure the correct tone of voice and relevant topics for Australian consumers.
A search is currently underway for a new GM for Australia, with former country manager, Sally-Anne Newsome, having returned to the Asos London office earlier this year to take up a role in business development.
Said McCabe of the role: “The recruitment process is ongoing – it will be as long as it needs to be to get the right person.
“I think it will be someone from Australia, it’s important to have a local person, because in my experience and what I’ve seen in every country, having a local person and a local team, they care passionately about that market and they are connected.
“That passion is hard to replace with someone who is not Australian. We’ll take our time to find the right person, trying to make the right hire, rather than a fast hire.”
Asos’ delivery times to Australia are impressive. For a standard delivery from the UK to metro areas it takes five days, with express delivery a maximum of three days. Outside metro areas, delivery is up to seven days.
“Very often we’ll beat that by a day, but because we can’t do it every time, we can’t promise it,” said McCabe.
“A key part of our quick shipping is because we have scale, so we’re able to buy space with the carriers. We’ve got a very slick supply chain in that respect.
“We have delivery solutions teams who are figuring this stuff out on a global scale, so we’ve got subject matter experts doing this. I’ve constantly got my foot on their neck to try and get it down as low as possible, because we’re trying to provide the best experience for customers.”
Asos has now enhanced the experience for Australian customers further, having upped the ante on its Asos Premium service – a paid program launched last year to provide Asos regulars with VIP offers and free shipping.
Prices at $49 a year previously, and inclusive of free express shipping (usually $10), this has now been lowered to $39 a year, with the added incentive of free unlimited returns.
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