Covid-19: Crisis accelerates rise of online shopping, says AO founder

The founder of online electricals retailer, John Roberts, said today (12 May) that he believes the coronavirus crisis has accelerated five years of online shopping behaviour changes “into only five weeks”.

He said the UK-based company is planning to “cement that change” through its service offering in the weeks and months ahead.

Roberts was commenting as AO offered a trading update for the start of its financial year, and said it would be delaying until 14 July the announcement of its preliminary results covering the 12 months to 31 March. Market and financial regulators have given publicly-listed businesses the option of delaying full results due to the Covid-19 pandemic.

AO said in today’s statement the lockdown measures implemented by governments in the UK and Germany – where it trades – has created “a unique set of circumstances with customers forced to stay at home and relying on their electrical and electronic products like never before”.

These measures, it said, meant the electricals market became 100% online overnight, and AO predicted eCommerce will retain a larger share of the sector than it did prior to Covid-19.

AO said, despite a decline in the overall market of the categories in which it operates, the company has grown market share and seen increased demand and sales across all categories since the lockdown measures came into force. More details will be revealed in July, but it said it made “substantial progress” in UK growth, moving towards profitability in Germany, becoming cash generative, and leveraging its eco-system.

Examples of the group leveraging its eco-system over the last 12 months include providing delivery services for a growing number of third-party retailers, and advancing its business-to-business operations by branching out into the housebuilding sector.

"I want to thank the amazing team of ‘AOers’ for their dedication, sacrifice and professionalism through the very recent period in particular but also throughout the last 12 months,” noted Roberts.

“They have delivered in spades against the key priorities we set and we entered our new financial year in good shape."

Roberts joins fellow digital-first business boss, Naked Wines CEO Nick Devlin, in talking up the pandemic’s impact on driving growth in online retail. Devlin said last month that an “inflection point” had been reached in the online drinks industry, evidenced by growing demand for wine since lockdown.