The apparel retailer plans to continue to invest in mobile upgrades and other technology as more than half of orders now come from mobile devices.

British web-only apparel merchant ASOS PLC Holdings reports a 61.8% surge in retail sales to consumers in the United States for the first half of its fiscal 2017. Executives attribute the gain, in part, to heavy customer engagement via mobile usage and a new digital platform.

U.S. sales reached 124.3 million pounds ($154.78 million) for the six-month period ended Feb. 28, up from 76.8 million pounds ($95.63 million) year over year, the company said this week. Total global sales increased 37.9% to 889.2 million pounds ($1.1 billion) from 644.6 million pounds ($802.6 million). ASOS is No. 22 in the Internet Retailer 2016 Europe 500.

Mobile sales have been bolstered by a 28.0% jump in daily app downloads for the six-month period. Plus, mobile devices account for 70% of its web traffic, the retailer says. ASOS says its customer engagement on mobile has been “fantastic” and that there are more than double the product views in app versus on the web. More than half of all ASOS orders—58%—now come from mobile devices, up from 44% in the prior-year period. The retailer has seen more than 780,000 monthly app downloads with shoppers using the apps an average of eight times a month and spending 80 minutes a month on the site or in the app. 63.3% of U.S. visits to the e-commerce site were on a mobile device.

“Mobile has already disrupted desktop e-commerce for 20-somethings, and that channel shift continues at pace,” ASOS CEO Nick Beighton told investors during an earnings call, according to a Seeking Alpha transcript. “We’ve been at the forefront of that, but it’s become much bigger than any of us ever realized.”

The retailer completed the rollout of its new mobile checkout during the last reporting period. ASOS plans to launch a series of updates for its Android app and an Apple Pay option for its iOS app and mobile site in the coming months. Upgrades to the mobile “My Account” section also are coming soon and will allow customers to more seamlessly find their order history as well as delivery and returns updates. The revamp will integrate a dashboard for the ASOS A-List loyalty program, which just hit its one-year mark.

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ASOS, which sells its own-label fashions along with pieces from such brands as Adidas and Ted Baker, also has better product images and enhanced navigation on its to-do list, Beighton said.

Apple’s “Peek and Poke” quick action shortcut, which allows a product to pop up and then advance to the order page when the home button on an iPhone is pressed hard, already is live on the mobile app. ASOS says it will add visual search functionality in the next several weeks that will allow shoppers to take a photo of an image from a magazine or an outfit someone is wearing, upload the photo to ASOS.com and search for similar products.

ASOS also has its eye on a new finance system to support the company’s efforts to inventory and sell products in multiple locations and in local currencies. It’s slated to launch in fiscal 2018.

ASOS says it’s looking to “accelerate” penetration in its third largest market, the United States. About a quarter of all U.S. orders are being fulfilled by the company’s U.S. operations with the remainder shipped from the United Kingdom. To save money and reduce delivery time for U.S. customers, the retailer says it eventually will open facilities on both coasts.

Although ASOS says the more promotional market in the United Kingdom has been challenging and hampered profits during the past six months, the merchant placed first in January among apparel retailers for unique visitors ages 15 to 34, according to data from media measurement and analytics firm comScore Inc.

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Even though ASOS continues to lead in the online fashion market, the company’s cost of growth remains high and continues to rise, according to Sanjay Vidyarthi, an analyst at financial services firm Canaccord Genuity. Investments in the new distribution center and the customer loyalty program also are crimping profits, Beighton said.

The rapid growth of ASOS and other online fashion players such as Amazon.com Inc. (No. 1 in the Internet Retailer 2016 Top 500 Guide) and Zalando SE (No. 7 in the Europe 500) has forced traditional store-based retailers to beef up their e-commerce strategies. “Up until a few years ago, ASOS was able to grow at relatively little cost, but fiercer competition in online retail means that to stand out now, you have to spend,” says Charles Allen, an analyst at Bloomberg Intelligence.

For the six months ended Feb. 28, ASOS also reported:

  • U.S. gross profit of 76.9 million pounds ($96.06 million), up 61% from 47.7 million pounds ($59.57 million) in the year-ago period.
  • Total gross profit of 440.1 million pounds ($549.64 million), up 35.8% from 324.0 million pounds ($404.64 million).
  • Total orders shipped of 23.3 million, a 33.1% jump from 17.5 million.
  • 2.0 million active customers in the United States (those who have shopped in the past 12 months), a 42.9% uptick from 1.4 million.
  • 14.1 million active customers, a 29.4% increase from 10.9 million. This is the fastest growth rate in nearly three years, Beighton said.
  • Average order value of 70.86 pounds ($88.16), up 2.9% increase from 68.86 pounds ($85.67).
  • 21.3 million social media followers, up 25.3% from 17.0 million.
  • 804.8 million website visits, a 26.9% year-over-year boost from 634.0 million.
  • Conversion rate of 2.9%, up from 2.8%.

Bloomberg News contributed.

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