Asos has turned to online stylists powered by artificial intelligence as it attempts to win back customers and reverse a fall in sales.
The online fashion retailer said sales had fallen 12% in the year to 31 August, and City analysts predicted another year of declining sales ahead.
The company is testing “Styled for You”, which uses AI trained on its database of 100,000 curated outfits to suggest items that could go together with those a shopper has already bought or has searched.
If a shopper signed up to its loyalty programme is seeking advice on buying a dress, for example, the AI stylist on the Asos app may suggest how the item can be complemented with a jacket and heels or given a more casual look with a sweater and trainers.
The choices offered up are picked from Asos ranges based on consumer trends, and the shopper’s history and preferences are expressed when they sign up to its app. Separately, the site already offers suggestions for all shoppers via an automated feed.
Retailers are turning to the technology to improve the shopping experience and internal processes. Marks & Spencer last year began using artificial intelligence to advise shoppers on their outfit choices based on their body shape and style preferences.
Asos is also using AI to help speed up its design process by showing what a product could look like on a model or in different colours.
The company said action to cut discounting and deter unprofitable shoppers – who return lots of items and buy little – had contributed to the decline in sales as well as a “soft consumer backdrop”.
The retailer said on Friday that annual pre-tax losses had narrowed to £282m, from £379m the year before.
José Antonio Ramos Calamonte, its chief executive, said he wanted to “make Asos not just a place to shop, but a destination for inspiration and style”.
Asos has been struggling to turn around its fortunes since a boom in sales during the pandemic lockdowns was followed by a slump when high street shops reopened it was left with a £1bn of unwanted stock.
New competition from Shein, the fast-growing Chinese-founded marketplace, as well as slick operators such as Next, which combines high street stores with quick online service, have hurt Asos’s sales and left it loss-making for more than three years.
The company introduced new charges on returns and banned shoppers who return too many items earlier this year, which it said had cut return rates by 1.5 percentage points.
“With the most difficult work behind us, I’m more confident than ever that we have the right strategy and capabilities to achieve our ambition to become the most exciting destination for fashion-lovers,” Calamonte said.
Anubhav Malhotra, a retail analyst at the investment bank Panmure Liberum, said the fall in sales at Asos was worse than expected and the company’s guidance for the year ahead suggested it was “bracing for another year of sales decline”.
He said Asos’s actions had so far “managed to plug the holes in a leaking bucket as sales have declined by more than a third from their 2022 peak”.
However, Malhotra added: “We remain concerned that significant challenges remain for Asos as the competition in fast fashion, in omnichannel retail and in multi-brand retailing has increased significantly.”
Shares in the retailer fell by as much as 10% on Friday.
