The general election could also have a positive effect on ASOS as a retailer meaning that companies taxes and overheads are lowered due to a boost in the economy. By there being a boost in the economy the pound becomes stronger compared to other currencies and importing goods costs less money. This means that by ASOS having a larger profit than in previous years they are able to offer discounts and special offers without the worry of them being at a loss. This also means that employees can be granted a bonus ensuring staff stay with the company and enjoy working there.
Legal minimum wage. Minimum wage could be a problem for ASOS as governments are always trying to raise it. By the government raising the minimum wage this means that the company will have higher overheads due to raising wages. Although employees will stay with the company ASOS may be forced to make employees redundant as they do not have enough money to pay them. The minimum wage is a legal pay and every company has to abide by it. By the government raising minimum wage companies like ASOS are no longer able to pay their staff the extra money each month. By ASOS paying their staff extra each month adds to their overheads, the minimum wage is a law, therefore ASOS must comply. By raising minimum wage it encourages people to want to work due to them earning more money, due to peoples changing attitudes lots of people are going to apply for these positions however ASOS can no longer recruit new staff due to not being able to pay their current staff members.
The minimum wage rising is a problem for ASOS as a company in the future as they must come up with new strategies on how to make more of a profit. ASOS’ overheads will rise due to having to pay higher staff wages and so they will need to compensate elsewhere. This would with be by making a few staff members redundant or by raising the prices of their products. In the long run however ASOS do ideal not want to raise their prices as loyal customers may be put off by the increase and start to look elsewhere. Keeping customers interested and loyal to the company is essential to ASOS as they do not have a high street store to compete with other retailers.
By not having a high street store and being an online retailer only ASOS have an advantage against stores who have to pay higher overheads than them due to being situated in town centres or shopping malls. This gives ASOS an advantage over local high street retailers as they are more likely to close down before any online retailer. Therefore it is essential that ASOS reassure their loyal customers even if their overheads are outweighing their profits. Consumers for ASOS are loyal and are likely to come back if they feel they're getting a good deal for their clothing, whist providing an impeccable service online all the way to delivery.