ASOS – Never Late To Innovate

by Mr E Bright
ASOS – Never Late To Innovate

Somewhat ironically, online retailer ASOS has acted as the poster boy for the AIM market for many years.  It is well documented that savvy investors who bought ASOS shares at their listing would have returned a staggering 24,351% to date, however all investors know it is future performance which will dictate their fortunes.

Companies rise and fall. This is a natural life cycle for businesses and there are few companies that escape it. They key thing for longevity is innovation, but to really excel you need to innovate fast. In the words of Steve Jobs, “you can't just ask customers what they want and then try to give that to them. By the time you get it built, they'll want something new". Companies need to stay ahead of the game.

ASOS’s policy of allowing consumers to order a basket of goods for almost instant delivery, and then allowing for them to return unwanted garments free of charge whilst receiving a full refund, has proved incredibly popular. Ask a teenager and most will have used this service, keeping what they like and returning what they don’t. It is exactly how you would act in a store. We’ve all been in a situation where something ordered online arrives and it isn’t how you imagined, this clever service acts to mitigate this, preventing a barrier to sales.

However, a note from ASOS management last week highlighted that their most common client query was “When will I get my refund?”

ASOS has recently introduced the ability for UK based app customers to try products at home and only pay for those that they want to keep. The service enables customers to order a delivery from ASOS, try the garments on at home, return as many items as required, and only pay for what they keep - within 30 days (with no interest or fees).

We see this as a brilliant example of a company innovating to provide customers with a first class service, which will importantly grow revenue and brand loyalty. This innovation can drive company and thus share price growth, and it is exactly the sort of ingenuity we look for when selecting companies for our AIM portfolios.

ASOS is only one example of top quality AIM companies which we hold in our AIM portfolio. The portfolio has performed impressively so far in 2017, generating +22.61% (up to end of September) versus the 20.15% return of the FTSE AIM All Share Index. To discuss an investment into our discretionary AIM portfolio, please contact the team on 0207 397 2597 or send us an email at