Archive | September 26, 2013

ASOS: Excellent Ecommerce in practise

Probably most of you are familiar with UK-based online retailer Asos.com, as its now one of the largest online retailers in Europe. 

The following chart shows ASOS sales over the last 12 years: from their foundation in 2000, to the half a billion in revenue in 2012. [1] This week, The Guardian reported that ASOS’ sales rose by a staggering 40% in 2013, and end-of-year revenue is expected to be £754m. [2]

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What is the key to their success in online retailing? Well, there are many things ASOS does right, but in the light of our class this Monday I will mention 3 characteristics. 

Hyperdifferentiation &  Resonance Marketing
Nowadays, often the success of a company depends on its ability to offer the customers exactly what they want, instead of giving them a product that is ‘good enough’. Even if there is only a very small number of customer that loves the product. [3] Customer will pay a premium for fulfilling their exact needs. Whereas traditional clothing shops could only offer what would fit in their store space, online retailers can order their customers a much broader range of products. ASOS sells more than 65,000 branded and own-label lines. [2] Therefore, almost any customer can find what he or she wants at ASOS.

Product Informedness
By offering customers more information about product characteristics, the chance is higher that customers in the differentiated segment will ‘trade out’ and ASOS will likely sell more apparel and at a higher price. [4] ASOS will offer detailed information about the product, about shipping & return options, multiple photos and a catwalk video of the product. Next to that, they offer a Fashion Finder option, in which customers can see the products on others and clothing combinations that bloggers made. 

Involved Social media
The Market Society of the United Kingdom calls ASOS ‘a truly integrated social media company’ as they understand how women get ready and dress up for social events. Indeed, with almost 3 million followers on Facebook and half a million on Twitter, they are not doing bad at all. Next to Facebook & Twitter, they are active in 8 other social media platforms, including Pinterest and Instagram. ASOS’ global social media manager states ‘Our social channels all have a clear direction and personality as consistency is really important so your audience gets a clear understanding of your company’s personality. Our social channels house everything from behind the scenes content and ‘shoppable’ updates to interactive competitions’. [6]

 

And to make a last remark: free worldwide delivery. ASOS is truly going global. 

 

Sources
[1] http://www.technologycreek.com/chart-of-the-day-asos-sales-for-the-last-12-years/

[2] http://www.theguardian.com/business/2013/sep/19/asos-beat-profit-forecasts-sales-soar

[3] Clemons, E.K. 2008.  How Information Changes Consumer Behavior and Consumer Behavior Determines Corporate Strategy. Journal of Management Information Systems 25(2) 13-40.

[4] Li, T., Kauffman, R.J., van Heck, E., Vervest, P., and Dellaert, B. 2013. Consumer Informedness and Firm Information Strategy. Working Paper.

[5] https://www.marketingsociety.co.uk/the-library/2013-winner-asos-social-media-marketingbest-leading-edge-thinking-case-study

[6] http://www.dynamicbusiness.com.au/social-media/lessons-from-the-pros-19082013.html

 

Do we, or Don’t we; accept IT?

Nowadays, Information Technologies are being used in so much more ways than say, 10 years ago. As individuals we can’t imagine living without it anymore. Which is also the case for companies that execute their activities with the use of the different information technologies available.

To benefit from what the technologies have to offer, the people working with it, must cope with it in the right ways. Or in other words, without correctly applying the technologies, they are of no use.

So, it is really important that employees believe in the positive effects of new information technologies and lot of changes have to be made when implementing these technologies. Because people often try to avoid changes, there are some aspects you have to take into account when you really want to make it work. For example the social and psychological factors.

The article (see link below) finds that different groups of employees have a different degree of accepting the changes which come with the implementing and using new information technologies.

Personally, I think people are a kind of  pushed in to accepting the use of information technologies (in the everyday life and in a business setting). I mean; can you actually decide not to use any of it? When choosing not to use it, you will get behind in a lot of things and create a gap between yourself and the society?

It is my opinion that we do (as individuals and companies) accept the use of information technologies. But, maybe a bit in a forced way.

Article: http://www.jstor.org/stable/pdfplus/30036540.pdf?&acceptTC=true&jpdConfirm=true

Building apps: what’s in it for the developers?

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What is a smartphone or tablet nowadays without applications (apps) running on it? The last few years the number of developed apps has grown rapidly. Regardless of building them for Android, iOS or Windows operating systems, people are rushing to develop apps for all kinds of purposes. But looking at the installed user base on each platform and information on the payouts made by the different companies, it appears that the vast majority of developers will find themselves with little revenue to show for [1].

Companies like Apple, Google and Microsoft are all trying to attract a huge crowd of developers to their platforms, but each company uses a different approach in announcing the actual facts and figures on this topic. For instance, at Apple’s Developer Conference the company proudly presents the current number of available apps in their app store emphasizing the payoff to developers. On the other hand, Google and Microsoft remain quite taciturn in revealing revenue numbers on their apps. Nevertheless, figures indicate that Apple is winning the game in terms of payoff to developers with an average of 5,000 million dollars paid to around 235,000 developers, whereas Google and Microsoft paid 900 million and 100 million dollars to 150,000 and 45,000 developers respectively. These figure show, however, no details on how much money developers can actually make on those platforms [1].

There are a few ways of earning money when building apps. The following monetization models can be distinguished [2]:

–          One-time paid apps: users have to pay only once to download the app. Updates and feature additions are expected to be free.

–          Freemium apps: users can download the app free-of-charge, but the app has limited features. If the users want to have additional features they need to make in-app purchases.

–          Paid apps with added paid features: this monetization model is quite similar as the Freemium model, but instead of a free download users have to pay for the download as well.

–          Free apps with advertising: users can download the app free-of-charge, but advertisements will be shown when the app is in use. The success of this monetization model highly depends on a large number of users who need to use the app on a very frequent basis.

When developing an app, it is recommended to consider all of the above mentioned monetization models and determine which model would be suitable for your specific app. Just like writing a business plan for a startup company, developers may investigate all revenue options and analyze the consequences of each option. After all, the application and its corresponding monetization model should fit with the user experience you want provide [3].

One approach of app development is to build both a free and paid version. For example newspaper The Guardian introduced a ‘Two App Strategy’. They created a subscription-based app for iPhones and a free-of-charge Android app based on advertising subsidy, because “We feel that having a free, ad-funded Android app is the right business model for this marketplace and platform at this point in time. We have no plans to change our iPhone pricing model as it stands, though we are always reviewing and watching the market very closely.” [4]

What do you think? Is there a future sustaining business model in building applications for smartphones and tablets? What’s in it for the developers?

 

[1] http://www.forbes.com/sites/tristanlouis/2013/08/10/how-much-do-average-apps-make/

[2] http://www.entrepreneur.com/article/228089

[3] http://techcrunch.com/2012/08/26/how-free-apps-can-make-more-money-than-paid-apps/

[4] http://paidcontent.org/2011/09/07/419-guardian-tries-two-app-strategies-android-free-iphone-paid/