32 ASK THE MANUFACTURER
people are so surprised at the “simple fact” that his firm will do what they say they will, and deliver when they say they say they’ll deliver. He suggests that this is something that may come from experi- ence in other supply chains - noting that of course the pandemic has again intro- duced even greater problems here, with companies folding or suddenly being unable to keep commitments they’d made pre-lockdown. One of the biggest challenges for
businesses is when there are snags in their supply chains, Anthony argues. He tells me that when Covid hit there were a huge number of companies who had made commitments they couldn’t make, or had inbound products that they simply couldn’t receive - especially B2B providers who’s customers were suddenly put on hold. “If your world is just B2B supplying - housebuilders, landlords, whatever - and suddenly lockdown hits, you’re in a position where it’s hard to justify staying open,” laments the managing director. “Because of that, we have seen a number of distressed customers that have come to us out of the blue because they need supplies now, and their existing supplier isn’t back up and running yet.”
CHANGING THE FACE OF WHITE GOODS Anthony went on to explain how the company came to be in this position, and the steps it took to offer such stability to both B2B and B2C customers: “20 years on, selling appliances on the internet isn’t such a big deal, but people forget that when John Roberts (CEO and Founder of
AO.COM) first came up with the idea, Amazon was still only selling books on the internet through dial up connections.” He continues: “Back in 2000, when John basically decided to go and change the face of the white goods industry, there’s no question about it - it was a hugely bold statement.” Anthony remembers how most people would go into an appliance store, make an order, and receive it at least seven days later. “John’s attitude was different, however,” he says. “To give customers what they really wanted, we needed to do more.” “He decided that for us to become a
differentiator, and to give true customer service, the only way to do that was to own our own logistics business,” says the firm’s MD. AO purchased Expert Logistics from food retailer Iceland, which, according to Anthony was an “inspired” decision: “About three of four years ago I was at a round table industry discussion, and I was chatting to this person who said he sometimes wonders if John realised at
WWW.HBDONLINE.CO.UK
accommodate these rules. In doing so, he believes the company has provided an “essential lifeline” to the sector in such times of uncertainty. Another strengthening factor the online retailer has found during the pandemic is the general move away from the store- front, says Anthony: “As John has said, there has been five years of market change in five weeks – this huge migra- tion from the retail store to internet-based solutions. I suspect that now people know how easy and trouble free it is, people will continue to buy on the internet.” He continues: “I can’t predict the
the time how significant that was, or was he just got lucky.” The MD adds: “He knew, truly, he did.” With “probably the best two-man deliv- ery fleet in the country” – so much so that other companies are now utilising it – the retailer is able to cover all its own deliv- eries and be in “every postcode, every day” as customers were demanding. This means that buyers can get whatever they want from the company’s over-a-million- square foot of warehousing the very next day - from individuals, to landlords, to large scale developers. This control over the chain is so impor-
tant to AO’s ethos that the company even launched its own facility to collect and recycle old appliances - including the largest fridge recycling facility in the country, which covers more than just its own products. “Why?” he asks, “because we wanted to make sure it was done properly.”
A JOURNEY Taking things back to the present situa- tion, Anthony tells me that this approach to bringing more and more of the supply chain under the same umbrella has been a “huge help” towards its stability during these uncertain times. Of course, AO did not go wholly untouched during the current troubles, but the MD believes it has actually strengthened the company’s position in some respects. “There have been a lot of changes, and
it's been a really interesting journey - I’ve been blown away by how people have coped and what they’ve done,” he says. “But, while it's been challenging and thought-provoking, it’s really been one of those proud moments - just the fact that we’ve been open for customers has been really positive for us as a business.” He tells me how in three days the
company immobilised all its offices to home working, including call centre aftercare – “everything” – and intro- duced all the necessary social distancing measures in its warehouses – even opening new warehouse space in order to
future, but it’s hard to deny that people have changed their shopping habits. When was the last time you went anywhere except the local shop? It takes 66 days to make a habit, and we’re well past that now.”
MESSAGE TO THE INDUSTRY Bringing the conversation to a close, AO’s managing director says that looking back he is “very proud” of the company’s approach to these times, celebrating its “can do” attitude. He explains how this attitude has helped define AO Business, and what it offers over other routes: “Intrinsically, we are selling the same product, but a very different service – a washing machine is a washing machine – but in the business market, what people want to know is that you’ll meet your promises and deliver when you say you will. And, in 20 years, we’ve met all our promises, and we always deliver when we say we will.” He provides me with a great example
of this in action – another matter the company discussed with builders, where in order to meet social distancing measures and spread out their workforces, companies were changing a five day working week into a seven day working week. “What does that mean for AO?” says Anthony. “Well it’s not a problem, because we deliver on Saturday and Sunday anyway; there are so many advantages in working in this retail-esque way.” “Saturdays and Sundays are some of
our most popular days in the consumer market, so if a developer wants the same, it’s not a problem.” The managing director concludes with
a message to the industry that, while throughout the purchasing space there are “all sorts of issues like this” with supply currently, from where you can get hold of your brick to your cement, “you can spend your time worrying about that, but when it comes to the appliances you want delivered, there’s no need to worry – we’ve been doing it for 20 years.”
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