The Royal Mail strike has thwarted sales growth at Asos, the online fashion retailer, in spite of the company making alternative delivery arrangements.

In a sign of how the strikes have eroded confidence in home shopping companies and online retailers, Asos said that the threat of a national strike by 121,000 postal workers and a series of smaller local disruptions was one of the leading factors behind dragging sales growth in Britain to 23 per cent in the seven weeks to November 15.

Booming international sales have compensated for the slowdown in growth in its domestic market. In the same seven weeks last year, total sales growth, including its international business, ran at more than 100 per cent, compared with 46 per cent this year.

About 85 per cent of online retailers believe that the threat of postal strikes discouraged customers from placing orders, according to IMRG, the online retail industry body. A third of online retailers said their revenue had declined and 60 per cent said that they had found their new carrier arrangements more efficient.

The Communication Workers Union put the postal strike on hold this month after agreeing with Royal Mail to a “period of calm” before Christmas.

Nick Robertson, chief executive of Asos, said: “All the companies we speak to will do everything they can to avoid using Royal Mail. But the reality is, customers don’t necessarily join those dots together.”

He added that the weather, rising youth unemployment and credit card debt were weighing on Asos’s customers, who are aged mainly between 18 and 24. “But we still think there is opportunity in Britain: there is much more brand awareness and we can turn the volume up with regards to marketing. And, at the end of the day, the UK accounts for 1 per cent of global internet traffic,” he said.

Asos said that it had added a further 12,700 lines, taking the total to 34,000. It reported profit of £4.4 million for the six months to September 30, up 9 per cent on the same period last year, on revenues of £96.5 million, up 47 per cent.

Shoppers in America, Denmark, France, Germany and the Republic of Ireland, spurred by the weakness of the pound, have flocked to the Asos website, despite minimal marketing. The company plans to launch country-specific sites next year. Asos shares closed unchanged yesterday at 413p. It did not pay a dividend. Asos said that it intended to reinvest cash back into the business.

Source : The Times

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Here is a snippet taken from Modern Selling, asking sales leaders about the dreaded last quarter, here they give us an insight to their situation :

Bob Apollo – Inflexion-Point Strategy Partners (IT)

‘According to the clients I am working with and the messages I hear from the market, it remains tough out there, but some of the projects that have been in limbo since Q4 last year are starting to come back to life.

‘Even in live projects, there remains a big gap between being chosen and getting the order. Many internal champions haven’t yet fully understood how to navigate their pet projects through a financial approvals process that has become much stricter and highly risk-averse. “Deciding to do nothing” remains a common outcome.

‘The vendors that are breaking through have mastered the art of both eliminating the perceived risk of their solution and elevating the negative consequences of doing nothing. Simply exhorting your salespeople to “selling hard” is absolutely, definitively, a losing strategy. They have to eliminate risk and facilitate the prospect’s buying process.

‘The early adopter market has shrivelled to almost nothing – not because their aren’t still some early adopter individuals out there, but because the companies they work within have become more conservative in approving new projects and new expenditure. So innovative technologies are having to work out how to “cross the chasm” (and talk business, not technology) far earlier in their company’s evolution than was necessary in the past.

‘Start-ups who haven’t mastered this are particularly hard hit, without an installed base or an established service revenue stream to fall back on. But failure is not inevitable – companies that have the discipline to focus on creating genuine customer value (rather than product marketing puffery) are winning business.’

Eduardo Launa – CEO, GTM (IT)

‘We where talking about this today, our main provider has closed fiscal year today and it was time to look back and see how we where going. I have to say that this year is going very well for our very small Spanish company.

‘The fact is that we are going to close our best year and we want to make fourth quarter even better than other years and prepare for 2010 the year in which our company will be ten years old!

‘The points we are focusing are adding new low-entry products: the market demands them and the ones in our portfolio don´t perform well at the moment and we are looking for a real partnership in the SaaS (software as a service) model. We’re also considering the mixture of our portfolio.

‘We are going to use this quarter to hire, train and evolve towards more consulting services to grow inside the customers more than we are doing at the moment.’

Kathleen Steffey – president, Naviga (US sales & marketing recruitment)

‘I’m going to have the best quarter of the year, 4th quarter 2009. Customers are starting to execute and make decisions.‘

Source : Modern Selling

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