Why ao.com took the FTSE by storm…

Author: Emma Allison

ao.com shares were valued at £1.2bn on its stock market debut this week, putting the company in the same size bracket as Dixons and bigger than Argos owner Home Retail Group. The valuation attracted a few puzzled responses from retail analysts who were surprised that a business with £370 million in full year sales and less the £7 million profit could be worth such a figure. 

So just what is ao.com's secret? And what did investors see in the business beyond the financials?

Here are 8 reasons why I think ao.com was able to achieve such a full valuation:

A strong brand with a clear identity.

The ao.com brand proposition is defined very clearly - 'make customers happy' and the company has a business model that does just that. With nearly one and a half million Facebook followers and having launched its first TV campaign in the second half of 2013, brand recognition is at an all-time high.  

Customer Experience - The happy customer

What makes ao.com remarkable is not what they sell, but how they sell it. The experience of the customer is at the centre of everything they do. They have dedicated teams of content and copywriting staff whose sole aim is to make buying white goods online as informed a process as buying on a retail park. 

The successes and (rare) failures of their delivery drivers are publicised every month internally so that everyone is accountable for the service they provide. This theme runs throughout the business and the whole operation is geared towards making the customer happy.


If you can sell washing machines this way, you can sell anything.

The business rebranded in 2013 from Appliances Online to ao.com. The catchy logo with a smiley face represents the brand ethos well but the change was about much more than that. The new name no longer ties the business to one product category, so expect the business to replicate its successes in new categories and indeed internationally very soon.

Ahead of the curve

The Marketing and IT teams have been built to get ahead of the technology curve and predict the latest customer trends.

ao.com have received industry plaudits for being the first major retailer to have a one page check out, simplifying the purchasing process for customers. They built dedicated mobile and tablet teams before the majority of leading UK retail businesses so that they could design and develop the optimal experience for their customer no matter what device they viewed their website on.

In a market where traditional retailers such as HMV have fallen by the wayside because of a failure to keep abreast of changing consumer habits, ao.com are leading the way.

Strong Leadership

As the story goes the business was founded by John Roberts 14 years ago over a £1 bet in the pub that he couldn't sell washing machines online. It was an ill-advised bet because as it turned out, this man could sell ice to eskimos!

His strategic vision and creativity mark him down as a truly exceptional UK entrepreneur but if he is the figurehead, just as important behind the scenes is COO Steve Caunce, a down to earth, practical chartered accountant who set about realising John’s vision in a “controlled, robust and efficient way”. Amazingly, Steve takes a couple of hours out of his week every week to meet all new staff on their induction and makes a point of remembering their names to give them a personal welcome.

Home Grown Talent

John Roberts calls his staff his 'ultimate differentiator' and ao.com has built the business around developing their people, their way. They have a well-defined set of internal values that ooze their brand personality and they have a clear vision of what the ao.com staff DNA looks like.

Marketing Director Andrew Kirkcaldy is a case in point. Andrew joined the business 6 years ago as a relative Marketing novice and has built a best in class team of over 100 specialists from a team of 3 when he arrived. He has done so with a relentless drive to push the boundaries of what is possible with technology and digital marketing to help improve the online customer experience and in turn made ao.com true innovators in the online retail space.

Happy Staff = Happy Customers

ao.com has just been  voted 4th Best Company to work for in the UK in the Times Top 100 List 2 years running – 2013/2014 and I suspect they will not rest until they are Number 1.

Their brand new Bolton based offices are state of the art, with an Indonesian Spa and hairdressers on site, their own Starbucks and meeting rooms, break out spaces and even toilets designed to bring a bit of fun to the workplace.

Staff are rewarded with days off to raise money for charity, they run quarterly company parties and as a result if you were to cut them open, lime green blood would flow out. They take great pride in what the brand stands for and this is passed onto the customer.

Think Big 

12 months ago Appliances Online were a business that not many people  had heard of unless they had purchased a washing machine or fridge online. 

The decision to re-brand to ao.com was a huge gamble. Never before had a business with such strong search engine recognition decided to change its URL and risk losing their position and competitive advantage.

Nevertheless the decision had been made to take ao.com to superbrand status, so the business took the brave decision to take a temporary hit on their google position and the short term pain was more than worth the gain. 

Now the business is the talk of the stock market and John Roberts has been propelled to front page news.

What next?

When you enter the offices of ao.com there is a digital map of the UK with a real time display of all deliveries, customer calls and digital activity behind the reception desk. It’s amazing to watch how many products the business dispatches every minute and how many calls it receives. But I’m confident that in time the map behind the counter will be a global one and the numbers of calls and Facebook likes will have multiplied exponentially.

And that is exactly the reason why the business was valued so highly!

Steve Thompson is the Managing Director of specialist Marketing, Digital, Analytical and Creative recruiter Forward Role. He has worked with ao.com extensively to help them find the brightest talent in the UK across these functions. If you would like to work for ao.com or are interested in the North West’s hottest jobs take a look at www.forwardrolerecruitment.co.uk

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