AO World’s chief executive believes shoppers will never look back from buying electricals online following the retailer’s strongest ever peak trading period. Covid-19 has kept more shoppers at home, resulting in higher levels of online demand for the electrical products that AO sells – and John Roberts says that has accelerated the shift online in his market.
The electricals pureplay, ranked Top50 in RXUK Top500 research, today reports UK sales of £457.3m in the three months to December 31, up by 67% compared to the same time last year. In its German market, sales of €73.6m were 77.4% ahead of last year – when sales from its now-closed Netherlands website are excluded – and the retailer says the business has been profitable throughout the third quarter.
AO has invested in extra warehouses (pictured), staff and vans in order to support those higher levels of sales, and says it is delighted with how those investments have played out. But it also says the costs of Covid compliant environments have meant significantly higher costs, while customers have cancelled mobile phone and warranty contracts at a slightly higher rate.
AO founder and chief executive John Roberts says: “I believe we’ve seen ten years of change in ten months and experienced our strongest ever peak trading period.
“We backed ourselves by investing early in warehouses, vehicles, stock and people. This not only set us up to satisfy customer demand for electricals for the current crisis but also for the longer term, as the structural shift to online becomes a permanent feature of the market in the UK and Germany. One of our biggest achievements this period is to have our German business profitable throughout Q3.
"Our confidence in those investments has been rewarded by these exceptional levels of sales. We’ve seen how the short-term costs translate into a fantastic opportunity to drive lifetime value for millions more customers.”
He adds: “Now that customers have experienced a better, digital-first way to shop for electricals, I believe the majority will never look back. We intend to cement that change by raising the bar on our service and proposition in ways that only AO can deliver.”