ASOS. Selling the decision.
ASOS cut half its product lines, and profit jumped 50% on 9% lower sales. The most valuable thing a fashion retailer can sell you isn't clothes. It's a decision.
THE GIST ON ASOS: "The Edit"
What is odd about ASOS's results?
ASOS has reported a 50% jump in profit, but sales fell 9%. Its shares jumped 14% in a single day. Something weird is going on. The most valuable thing a fashion retailer can sell you isn't clothes. It's a decision.
How did it get here?
ASOS built its empire on infinite choice. At its peak there were 850,000 product lines: if we have everything, everyone will find something. It worked for a decade because the alternative was driving to a shopping centre. Everything in one place, delivered next day.
What changed?
Infinite choice went from an advantage to a massive problem. Too many options doesn't help people to buy. It paralyses them. So ASOS cut half its product lines and redesigned the app around making decisions easier.
Profit jumped 50% because it increased conversion, not volume.
What is the lesson?
Every product ever made is on the internet somewhere. What we need is help picking. The easier you make it for people, the more you sell. It's very simple, because we're very simple. Any difficulty between wanting something and buying it is a chance for us to lose interest.
For 20 years the internet rewarded aggregators: more, more, more. That created the problem, that no one could make a decision. The next 20 years will reward editors, the ones who make the decision for us.
Endless choice or someone to pick for you?
Your take. One tap, then see how everyone else voted.
Quick answers
What did ASOS do?
It cut half its product lines, from a peak of 850,000, and redesigned its app to make decisions easier.
What happened to results?
Profit rose 50% while sales fell 9%, and the shares jumped 14% in a day.
Why did it work?
Conversion went up. Too many options paralyses people.
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