Asos turns to AI stylists to win back shoppers after sales slide 12% | Asos

Asos has turned to AI-powered online stylists to win back customers and reverse a decline in sales.

The online fashion retailer said sales fell 12% in the year to August 31, and City analysts had predicted sales would fall for another year.

The company is testing “Styled for You,” which uses artificial intelligence trained on a database of 100,000 curated outfits to suggest items that might go with items the shopper has previously purchased or searched for.

For example, if a customer enrolled in the loyalty program is purchasing a dress, a post on the Asos website might suggest how the item could be complemented with a jacket and heels, or styled for a more casual look with a sweater and sneakers.

The options offered are selected from the Asos range based on consumer trends, and the shopper’s background and preferences are expressed when they sign up to the app.

Retailers are turning to technology to improve the shopping experience and internal processes. Last year, Marks & Spencer began using artificial intelligence to advise shoppers on clothing choices based on their body shape and style preferences.

Asos is also using AI to help speed up the design process by showing how a product might look on a model or in different colours.

The company said the action to reduce discounts and discourage for-profit shoppers who return large numbers of items and buy few, contributed to the decline in sales and a “soft consumer environment.”

The retailer said on Friday that annual pre-tax losses fell to £282 million from £379 million the previous year.

José Antonio Ramos Calamonte, Asos’ CEO, said he wanted to “make Asos not just a place to shop, but also a destination for inspiration and style.”

Asos has struggled to recover its fortunes since the crash, facing £1bn of unwanted stock as high street stores reopened following a boom in sales during pandemic lockdowns.

New competition from fast-growing China-based marketplace Shein and slick operators such as Next, which combine high street stores with fast online service, have hurt Asos’ sales, causing it to lose money for more than three years.

The company introduced new fees on returns earlier this year and banned customers who returned too many items; He said this reduced return rates by 1.5 percentage points.

“With the hard work behind us, I am more confident than ever that we have the right strategy and capabilities to achieve our goal of becoming the most exciting destination for fashion lovers,” Calamonte said.

Anubhav Malhotra, a retail The analyst at Panmure Liberum said the decline in sales at Asos was worse than expected and the company’s forecast for next year suggested it was “preparing for another year of sales decline”.

He said Asos’ actions so far had “managed to plug the holes in the leaky bucket as sales are down more than a third from the peak in 2022”.

But Malhotra added: “We are concerned that significant challenges remain for Asos as competition in fast fashion, omni-channel retail and multi-brand retail increases significantly.”