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ยท Posted on
February 21, 2024

The supply chain's moving at a snail's pace and ASOS is paying the price, literally

Turns out supply chain struggles and inflationary pressures are expensive.

What's the key learning?

  • Every company has a value proposition - the #1 reason you should choose them.
  • ASOS' value proposition is being affordable, so its absorbing losses rather than raising prices.

๐Ÿ‘‰ Background: ASOS is the online fast-fashion retailer that launched back in 2000. They did well during lockdown, but not so much now.

๐Ÿ‘‰ What happened: As Seen On Screen (who knew that's what ASOS stands for?!) saw its first-half profits down a whopping 87%... and it ain't looking good for the second half either.

๐Ÿ‘‰ What else: The company says the pesky supply chain and inflationary pressures are to blame. And while ASOS could raise prices to help recoup costs, that would go against its value proposition.

๐Ÿ”” What's the key learning?

๐Ÿ’ก A company's value proposition tells customers the #1 reason why a product or service is suited for them. It's a fundamental marketing tool.

๐Ÿ’ก Take a squiz at most companies' websites and you'll see a value proposition in black and white. Myer's is about putting customers first, Telstra's is about giving purpose to technology, and ASOS' is about accessible, low-cost fashion.

๐Ÿ’ก So, ASOS is absorbing some inflationary pressures instead of hiking costs for the sake of sticking to its values.

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