AO World today said its strategy of pleasing the customer – both consumers and B2B clients – was working as it reported full-year revenue growth of 13.6%.
Bolton-based AO World operates AO.com, a Top50 retailer in IRUK Top500 research, alongside AO.nl and AO.de in Europe.
In the year to March 31 it reported revenue of £796.8m, up by 13.6% up from £701.2m the year before. UK revenue of £680.8m was up by 8.1% on the previous year, while UK AO website sales reached £606.6m, 8.7% ahead. European revenue of €131.2m (£116m) was 54.8% ahead of last time, on a constant currency basis. But while gross profit of £141.8m was 9.7% ahead of the £129.2m reported last time, at the bottom line, pre-tax losses widened by 92% to £13.5m from £7m last time.
Chief executive Steve Caunce said: “Over the year we have continued to evolve our purpose to ensure it is suitable for the AO of today: to have the happiest customers by relentlessly striving for a better way. Our consistently high NPS scores and our amazing Trustpilot achievement in the UK proves we are firmly on track.
“We have continued to successfully launch new categories across our territories and our UK recycling facility became fully operational, building upon our vertically integrated infrastructure.”
He said that in the UK, AO had maintained market share in its core white goods market, and that its European operations were building both scale and confidence as it continues to target profitability in that part of its business by the 2021 full-year.
Mobile & cross-channel
AO launched a transactional mobile app across all its territories during the year as part of work to make the customer journey easier. “This means,” it said in its statement, “that our customers now have the ability to shop easily from their desktop, tablet or mobile.”
Operations and logistics
During the year AO opened a new outbase in Bridgend during the year to improve delivery availability and services in the South West. That takes its total outbase numbers to 14, as of March 31, up from four in 2012.
Customer satisfaction remains strong, with AO’s net promoter score at about 80, and scoring “great” or “excellent” in 95% of Trustpilot reviews and AO said that repeat purchase metrics showed loyal customers across its territories.
AO launched a new business website, ao-business.com, backed by dedicated team with a customer experience tailored to trade customers, with features including credit accounts.
As well as supplying electrical goods to businesses, the retailer is also now supplying logistics and recycling services. AO has launched its own recycling plant, via subsidiary AO Recycling, to process its own waste under WEEE regulations, which is serving third-party customers as well. It won a logistics contract with a new third-party client during the year. In the coming year it plans to focus and invest more in its third-party recycling and logistics businesses.
AO World said that its sponsorship of Britain’s Got Talent had fallen short of its expectations for driving brand awareness, although it did bring some incremental traffic to the website. Since then, following “extensive” consumer research, it has developed a new creative campaign set to launch in the first half of its current financial year and designed to bring a new UK brand platform “to life through all channels and all customer touchpoints; it is going to shape our thinking on all aspects of the brand, not just TV advertising.”
Most customers for major domestic appliances now receive their deliveries in a green AO van, a move that AO says will promote and reinforce its brand.
AO added a second drop-shipper during the year enabling it to add new categories, including gaming, mobile, smart home devices and photography to a range that already includes small domestic appliances, computing and audio-visual goods as well as its core white goods.
AO is selling in Germany and the Netherlands both through its own website and through the Amazon marketplace in Germany and Blocker and BOL in the Netherlands. Working with third-parties, it said, was giving the brand visibility and helping to reach more customers. Here too AO is widening its range beyond its core white goods, to include audio visual products in the Netherlands, and food appliances in Germany.