Innovative Retailer – AO.com

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The Name: AO.com

The Place: Headquartered in Bolton and what headquarters they are… but more of that later.

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John Roberts, founder, AO.com

The Story: In 1999 John Roberts thought he would shake up the selling of white goods good and proper. So he did. And everyone was happy. The end.

It’s a bit short this week isn’t it. Can we have some more details: What I’m trying to get across is the no-nonsense get-it-sorted approach to customer service that is the hallmark of this company.

Ah, no escalating teams: Not one in sight. The call centre assistants don’t have to refer to anyone else to resolve a complaint from ‘disgruntled from Berkhamstead’. They don’t need financial authorisation or permission from superiors, there are no checks on what they are allowed to promise on social media – just keep ‘em happy is the general idea.

Sounds expensive: Well, it would be if there were vast amounts of complaints but the beauty of its innovation is that most people are content.

And that is a retail innovation! But seriously, large and expensive white goods and the Great British Public. It’s not a match made in heaven is it? I see your thinking but I raise you this….AO.com holds all its stock – only around one to two weeks’ worth – rather than having some of it held with the manufacturers.

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1 of 500

Whoa. Hold on there cowboy. It’s a UK tradition that when your delivery doesn’t turn up you ring up the retailer who tells you that they are not delivering it but the manufacturer is and can you please get off the line and call them instead; This is my point. Short customer service trails. And I’ll tell you something else – AO.com own their own fleet of vans. 500 of them. There is no question of retailer A not knowing where driver B is because it’s all one happy family and thus in an instant the major bugbear of any delivery-based business is eliminated. I thank you. But there is more. The company have almost obsessional control over their business and that includes deciding to write their own IT software.

No, no, it’s just too much: A whopping 130 people work in IT at AO.com. Its own logistics systems have been written in house. It’s seamless.

Well, that’s happy customers what about the staff? If you thought the emphasis on customers was impressive, wait till you hear what the staff get. They’ve only got a spa.

Meh. Not really my thing: Hot stone massages on tap. Party room with glitter balls.

Each to their own: Free crisps, chocolate and soft drinks.

And now you’re talking: John Roberts maintains that the vast majority of his time is spent “protecting the culture” i.e. nurturing the staff so that they all have the same focus on customer service as himself. There are 3,000 of them and 40-50 newbies start every week. Each and every one of these gets a personal meet and greet from the boss who also maintains he will reply to any complaint directed his way within the hour.

Super. Anyway, back to the crisps – Tyrells or Walkers? I’ve no idea. Let’s talk about growth. AO.com has grown at around 30% each year and its market share stands at 15-16%. However its brand awareness is low – at only 6% among the general population.

Well, if you will go around changing your company name: It’s true it was only 12 months ago that AppliancesOnline.com changed to the snappier AO.com. But as Roberts points out Comet went bust two years ago and it’s still got 28% brand awareness. You can’t win. But if I may give you another statistic.

If you must: Its ‘trust’ score across all UK customers is a fairly low 13%, but among customers who have actually used the company it is unbelievably high.

Go on then: 98%.

Blimey, I wonder what happened to the other two: The statistics illustrate very well the slow-build success story that is AO.com, there is virtually no mainstream marketing, and TV ads only started very recently. But if you make customers happy then they will take to their computers and tell everyone else about it. Social media provides all the recommendations they need.

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One of many innovations

I see. How many? 1.7million people. AO.com is adding very slowly to the new categories it is selling in order to bring all these existing and loyal customers to other types of goods.

So it’s more than fridges? Yessir. Just added to the range are TVs and small domestic appliances. And as Roberts’ notes if your whole raison d’etre is customer service then you don’t rush into new things lightly. And if I may just give you a final statistic.

Absolutely not: Tough. 70% of sales in these new categories come from existing clients. You have to remember that buying white good is not a very regular event. You’re lucky if there is a sale a year in the large appliance category but customers might buy two small appliances during this time. AO.com is proving very adept at giving its customers a good reason to keep shopping with it.

And what’s next for this paragon of customer service? The first international expansion – Deutschland.

Ah, free wurst all round: Wunderbar.

PCMS Group is a leading independent supplier of software and services to the retail industry; PCMS Store and Multi-channel solutions have been chosen by over 98 retailers including Arcadia, John Lewis and M&S.

 

 

 

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