How AO.com is achieving its goal to become Europe’s best electrical retailer
In a market full of online and bricks-and-mortar competitors, AO.com is defying the odds to reach its goal of becoming Europe’s best online electrical retailer. Starting out in 2000, the company came about when a friend bet founder and current CEO John Roberts £1 that he couldn’t use the internet to sell electricals. Fast forward 17 years, and AO.com now spans the UK, Germany, and the Netherlands, with many more on the horizon.
With its lofty goal in mind, the company has implemented a number of technological solutions that have put it on a trajectory towards success. Business Review Europe speaks to Adam Warne, Group IT Director, to discover how his department is working with the whole of the organisation to drive meaningful change.
He explains that technology is used in a wide variety of situations to deliver positive results, and the best implementations are where the innovation isn’t obvious “Customers always say how amazing the experience is with AO and how intuitive the website feels. An example of this is we recognised the computing category was a complex one to shop, and so built our own product finder to help the customer choose the right computer for their needs using a few simple questions. It is these little things that people probably don’t think about but we put a lot of effort into.”
Another example of technology improvements creating wow moments for customers is their Interactive Intelligence telephony platform. “Customers don’t phone us for fun, they call because they need something, and we want to solve their query as fast as possible. As a result we’ve built algorithms to predict the likely reason for the call so we can respond in the most appropriate way possible. For example, if your delivery is due today and it hasn’t been delivered yet the most likely reason for the call is you want to know what time it’s arriving. Instead of putting you into a frustrating menu system, we just tell you what time it’s due, and if there’s something else you need we can put you straight through to talk to somebody who already has your order on their screen. Integrating the best of breed telephony product with our bespoke CRM platform has yielded some very positive results for both our customers and our employees”
“It’s my role to ensure tech brings a benefit to the company, and that it is never a reason why we can’t progress,” says Warne. “It’s always been about how we can make the shopping experience more amazing than it already is. Part of the technology function I manage is about taking the abundance of ideas we have and turning them into reality as quickly as possible to deliver tangible results.”
With an IT and technology team of over 100, spread across multiple locations and territories, the opportunities to innovate are numerous, but AO.com has its own unique way of producing fresh thinking.
Warne explains one of the ways in which this is achieved. “We consistently allocate every team enough time to do something of their own – it could be a brand new innovation project, building technology to make us better as a business, or simply something to make the teams life easier”
By mapping processes and gathering data, AO.com has also been able to use technology to drive change in the logistics part of the business, as Warne explains: “When we looked at what to improve, we decided to start putting some telemetry in place to measure what was happening to the business. Due to the high volume of items we handle every day, we became aware that we had humungous amounts of data, some information, but very little insight.”
“It’s at this point that one of our existing partners, Grey Matter, worked with the team to produce some inventive ideas to overcome our big data problem. The solution used a combination of technologies to remove storage, processing and analytics barriers that were preventing us from progressing at the pace we’re accustomed to. Finding the right solution isn’t always about picking the most popular technology, it requires an in depth understanding of the use cases, the people, and most importantly, the culture. If you work with partners who don’t understand all three of these factors as well as Grey Matter do then it’s like trying to force a square peg in a round hole.“
“Once we had the right platform we started to use our experienced data science team to help us understand what the data was telling us and very quickly started to make some informed decisions about where to store products, how and when to move them efficiently, and how to make significant improvements to an already world class logistics business.”
“It’s important to realise that technology alone wouldn't have improved the performance. We relied heavily on the input, domain knowledge and foresight of the logistics team to put the technical icing on the operationally excellent cake.”
Whilst making the operation more systemic, Warne and his teams have ensured that the process was well communicated, understood and converted into positive results. He explains: “We make sure that happens through a ridiculous amount of analytics, measurements, and communication. We use information radiators around the business to make it obvious if we are doing well or not so well.”
“We have five underpinning values that drive everything we do at AO.com and they are fun; caring; smart; driven; and bold. No matter who you ask in the business – whether it be somebody in the contact centre in the UK or a group director in Europe – everyone knows what they mean and how they live by them.”
Alongside ensuring that innovation is hardwired at a team level, AO.com also continually invests in best of breed technology in order to remain competitive and deliver high levels of customer satisfaction, from the first click on the website site to the product delivery and beyond.
To ensure our business keeps ahead of the market Warne recently launched an initiative to migrate its legacy infrastructure, systems and services onto a private cloud platform. This brought numerous benefits to AO.com, as Warne explains: “We really liked the idea of having a unified compute platform, that could give us public cloud flexibility but with the security of a private cloud. And it was essential that this is provided and supported by one vendor to try and simplify things as much as possible. Interoute’s private cloud is global, available across 17 zones and built into its private and secure network. It give us the operational stability and cloud flexibility we need to ensure our underlying ICT infrastructure is market leading”.
“As well as being able to rapidly deploy and deliver our services in new territories, the private cloud platform means that now when we run projects, the time needed for the infrastructure to commission services is massively reduced.. Previously it was weeks and now we are talking minutes and seconds.”
AO.com have taken the learnings from their back office systems and have also invested in private cloud to run their ecommerce websites which for an online retailer can offer scalability and flexibility when it’s needed the most. “As a customer you expect a website to be fast, and more importantly available for use. When Black Friday hit the UK market in a big way in 2014, we realised that scaling up our physical web platform to keep up with customer demand was a battle that could get very difficult to fight alone so we chose to partner with Interoute who’s private cloud solution has all the benefits of scalable public cloud but with enterprise class security and customer support. Because we can now scale our platform based on our traffic predictions we can operate a very efficient platform that handles significantly more traffic at a reduced average cost.”
“Fast and scalable websites aren’t only about the platform they run on, it’s just as important to optimise the front end technology and have control over the traffic. It’s a specialism that you can spend a lot of time trying to perfect and so we appointed Intechnica who provide us with an unprecendented level of web performance knowledge and guidance and also a suite of products that are all about preserving and optimising the website experience for all our customers. The visibility and control we now have over the end to end web platform is unparalled and working with both Interoute and Intechnica has resulted in having an unblemished customer experience record during some exceptional traffic days.
The company has also leveraged technological advances to improve the speed and efficiency of its wholly-owned logistics operations. Tasked with moving, storing, and delivering thousands of highly varied products on a daily basis, the difference a seemingly small change can be made is massive.
“Using the data from an ecommerce and logistics perspective enables us to store products in the right location,” Warne explains. “We are optimising movement times and using software to direct the warehouse team to the place they need to be in next. It is literally seconds and centimetres that really start to add up and make significant differences.”
Meeting customer needs
Instead of simply predicting what its customers want, AO.com has used data – both big and small – to produce highly functional and appealing customer retail websites across its territories. This method has not only helped with website creation, but has also enabled the company to rollout new product lines alongside a fresh take on delivering online content. This attention to detail along with its relentless focus on its customers’ needs has led to its business having a consistent Net Promoter score of 80 and being rated 9.5/10 by Trustpilot.
“There’s nothing more frustrating than being at home all day waiting for a driver to turn up,” Warne says. “We wanted to provide a mobile app to track exactly where a delivery is, so a customer only has to be in for a small part of their day. The app proves an accurate ETA of when the delivery will arrive and also empowers the customer to take control of their order, providing the ability to do a number of things, including changing their delivery day.
Another avenue that AO.com has developed has been product content. Not content with providing 2D images and a technical specification, the company has pulled out all the stops to offer something special. “We want to provide the right kind of content for customers so they can make the right decision for what they want. We have gone to great lengths to create our own 3D models of products – we literally rebuild products in 3D with millimeter accuracy and render them to a lifelike quality - I think Pixar would be jealous!.
“We also use these 3d models in our product videos. It’s just one of the unique differentiators that allows us to show customers how the technology works on the inside of the products. For example, customers can see how a Direct Drive Beltless washing machine works. You can’t get this insight anywhere else online, and certainly not in a high street store.”
Having taken its networking, logistics, and customer platforms to the next level, Warne and his teams have demonstrated the awesome transformative power of technology. Always keen to move faster than its industry peers, AO.com is now eyeing yet more product categories and further European expansion. With a winning combination of talent, technology, and partners, the business is set to continue as a success story for years to come.