As part of Arcadia’s strategy to save its failing brands, Topshop and Topman are set to launch ranges on rival ASOS’ website in the next few months but it must tread a fine line between driving additional revenue from the online pureplay’s wide global shopper base and rendering its own websites redundant.

Curated ranges are essential to protect brand identities

Following years of battling close competitor ASOS, as it has steadily gained a share of the UK clothing market, Arcadia’s flagship brands have finally decided if they cannot beat their nemesis, they might as well join it.

Moving to where shoppers are – ASOS’ visits rose 15.9% in H1 2018/19 – makes sense for Topshop/Topman whose sister brands, Miss Selfridge and Burton already sell on the site, with products available in abundance (around 600 styles per brand). However, ranges must be edited to ensure consumers still have a reason to visit the individual brands’ websites. Topshop/Topman need to launch with strong ranges to protect their brand identities and longevity, but also to compete with the plethora of other fashion players that sell on ASOS including, River Island and Missguided.

Online investment is much needed

In order to turn Arcadia’s fortunes around, the retailer has pledged to invest £60 million to upgrade its online operations (plus an additional £75 million to rejuvenate stores) which is much needed as it will now be even more important that the brands’ websites stand up to ASOS’ best-in-class proposition. The online giant’s appealing Premier delivery saver scheme (next day delivery for 12 months for £9.99) encourages shoppers to make the online pureplay their first port of call for a fashion fix; and for Topshop/Topman to drive conversion on their own sites, fulfilment options must be just as fast and affordable. Similarly, ASOS’ nifty tools such as visual search and boards where you can pin products, drive repeat visits so the Arcadia brands must introduce equivalent functionality to satisfy young shoppers with high expectations. Given ASOS is a tech-focused retailer that prioritises frequent small tweaks to its proposition, alongside major enhancements, to constantly improve the shopping journey, it is difficult to see how Arcadia, as a multichannel player, will be able to evolve quickly enough to match the rapid pace set by its new partner.

Despite Arcadia’s long term sales slump, it is a coup for ASOS to have secured two of its challengers in the youth fashion market and demonstrates its position as a retail powerhouse. With H&M’s in demand yet sparsely available brand, & Other Stories, launching earlier in May, ASOS is clearly viewed as a channel for its competitors to expand their global reach (over 60% of ASOS’ revenue is generated outside of the UK) and piggyback on its well-oiled platform. With revenue growth slowing as the online pureplay matures, the addition of major brands will bolster sales and attract new customers enabling it to continue gaining share of the clothing market.