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Case Profile: Appliances Online
Appliances Online made the purchase of cumbersome whitegoods, usually requiring large financial investment, a smooth and frictionless experience.
While some products lend themselves particularly well to selling online, others such as refrigerators, washing machines and hot water systems are the last you think would be readily available to buy in a matter of clicks. Yet, Appliances Online manages to successfully retail appliances and white goods (with an average sale value of $900) to over 60,000 customers nationwide and keep its customers coming back for more!
Chief Executive Officer John Winning comes from a long line of retailers, being a fourth generation family member born into the Winning Appliances bricks and mortar business, which first started trading in Sydney in 1906.
Rather than continuing full time in the family business, Winning recognised the huge growth potential of the online channel and after (amongst other things) waiting tables at Doyles and doing deliveries for another big-name Sydney brand, he set up Appliances Online in 2005.
“I set up Appliances Online with a laptop, and a 1300 number diverted to my mobile phone. Since then it has enjoyed huge growth which is complementary to Winning Appliances,” Winning explains.
Over the past couple of years, the company has gone from strength to strength, taking an innovative approach to facilitating and incorporating customer feedback and reviews, establishing environmentally friendly practices, as well as offering an efficient and exemplary online shopping experience. Winning has grown the business from $3 million since inception in 2005, to be worth over $25 million currently. This all added up to earn the company a 2010 Online Retail Industry Award (ORIA) for Best Pure-Play Online Retailer.
Customer Service is Key
Winning likens the Appliances Online business model to a hybrid between the old and the new retailing styles. “I would describe it as convenience driven by modern sales and marketing technology backed by a service level driven by a classic ‘old school’ approach to customer service. In short we think of it as ‘today’s convenience with yesterday’s service’.”
“Educating people about the efficiency of shopping online was initially a challenge,” he continues. “Five years ago it wasn’t commonplace for people to go online to buy large and expensive items (such as fridges, washing machines – or even whole kitchens). In order to overcome this, we ensured that consumers had the best customer experience at every step of the process to assure them and help spread the word.”
Winning has learnt from his family business that the fundamental ingredient to retail success is a “single-minded focus on client satisfaction.” In keeping with this, information, feedback and reviews are an integral part of the Appliances Online website. With visitors being able to access buyer guides providing in-depth information to assist with purchasing, they are able to leave feedback on every page of the website and can rate and review products. The website also promotes its telephone service as providing “unbiased, professional advice” which is available to visitors seven days a week.
“We spend a lot of time listening to what our customers want, and the rest of the time delivering it to them. Customers are king at every step of the process, and we are constantly updating our systems and processes based on their feedback. The biggest mistake you can make when you go online is to believe that because you are an online business you don’t need to interact on a personal level with your customers. In fact, the opposite is true,” says Winning.
Customer feedback is so important to the Appliances Online business that the company has partnered with FEEFO (an online independent feedback service) to obtain feedback from customers about their purchase experiences. Appliances Online customers receive two email queries from FEEFO post purchase regarding the company’s delivery service and how the product is working, which, if completed, are returned to the company.
“Customer satisfaction is one of the main drivers for repeat business (70% of sales). Currently, our customers give Appliances Online a 98% satisfaction rating according to independent customer feedback forum Feefo.com (May 2010 statistics over the past year) – which means we still have work to do!” Winning states.
As an added part of its customer service, Appliances Online has sought out customer service representatives who each have an average of six years experience working in the appliances and whitegoods industry. This not only instills a sense of trust in the business and its products with customers, but each query is analysed in real time by a full-time customer service manager in the marketing department and acted upon within 11 seconds.
There is no doubt that this approach contributed to Appliances Online winning the 2010 ORIA for Best Customer Experience, which awarded the business for being the best in terms of site usability, product and content, efficiency of delivery, customer service and marketing.
A Simple Model
Something else that sets Appliances Online a part from its competitors, other than the sheer bulk of its products, listening ability and dedication to customer service, is the ease with which the purely online retailer manages its supply chain in order to complement the retail experience.
The company has established its own shipping service to the greater eastern seaboard regions, where it allows consumers to choose their own delivery times (between 8am to 6pm). The business is also flexible in terms of payment options, accepting cash, cheque or credit card payment on delivery and assuming that no plumber or electrician is required the Appliances Online delivery person will connect your appliance and can remove and recycle the appliance a consumer is replacing.
Green is Gold
“We pride ourselves on being a green company,” says Winning. “When a new appliance is delivered to a customer to replace an older one, the old appliance is removed and recycled in the most environmentally-friendly way possible in partnership with Sims Metal Management. We also support the development of energy efficient products, and our offering includes a wide selection of green-friendly appliances.”
Not only is delivering an environmentally friendly experience to their customers of high importance, but the company also operates a ‘paperless office’.
“Scanning guns from the computer to the warehouse are also in place – only the end invoice is printed throughout the entire sales process. We make continual investments to remain up-to-date with the best in cardboard and polystyrene recycling technology.”
Visibility in the Jungle
In a veritable jungle of online retailers, visibility is another key to success for Appliances Online. Winning confirms that this is the business’ major focus and the company’s marketing strategy is heavily invested in performance-based online marketing tactics.
“This means the success of marketing activity is tracked closely and changes are immediately made to any tactic that isn’t working, allowing us to constantly change and update the way we market and sell products.”
The company’s integrated approach to optimisation strategy, using both paid and organic search has yielded them the best results, achieving more than 50 percent year-on-year growth in unique visitors since November 2005 and a 70 percent repeat business rate.
“Listening to our customers is the lifeblood of our business, and we incorporate this into all marketing initiatives,” comments Winning.
Another strategy that the business employs to ensure Appliances Online remains competitive, is to have the best e-commerce technology. “Being ahead of the pack in online retailing pays dividends, and by the time our competitors catch on to what we are doing, we’ve moved on to a better, more efficient way of doing things.”
Social media integration also makes up a component of the Appliances Online strategy to increase brand awareness and further promote engagement with existing and prospective customers. Appliances Online’s Facebook page, which currently has close to 33,000 fans, has enjoyed consistent fan base growth.
“Plans are in place to allow customers to share product and services rating directly via Twitter, Facebook and through independent feedback software provider FEEFO,” advises Winnings. “We are constantly looking for new ways to interact with our customers, mobile is also one of the new strategies we are investigating.”
Like any other retailer the Global Financial Crisis (GFC) represented a possible threat to the Appliances Online business. However as Winning explains, though initially concerned about the adverse affects of the situation, it also opened the business up to some valuable lessons.
“I was concerned about the impact the GFC was going to have on the online retail industry, yet, it was actually a boon for the online industry because consumers started noting where every dollar was being spent, and consequently their purchasing behaviour changed,” he says.
“We observed that consumers made fewer impulse purchases and spent more time on our site researching products, reading customer feedback and looking at energy ratings more than ever before. From this we made some key improvements and incorporated better research options and background information into our website – meaning that our business continued to grow unabated despite the downturn. Had I known this heading into the GFC, I wouldn’t have lost so much sleep!”
Winnings views the continued challenge for Appliances Online as being the ability to provide products and services that will impress its audience every time. “In the next two years we would like to make sure we could offer our award-winning customer experience to more of the population in remote areas, that would not generally expect to receive the type of product and service to the level we offer.”