Appliances Online sales soar 41% defying downturn in sector

Appliances Online’s sales surged 41% in December despite the difficult retail environment which has seen many appliance stores such as Retravision Southern collapse.

The company, which was founded by John Winning in 2005, has been a powerhouse in Australian online retail with its Appliances Online and Big Brown Box websites. Last year it added PowerBuys and McKnights Corporate to its stable of businesses.

Peter Harris, general manager of Appliances Online, told SmartCompany the business has managed to defy the market downturn by focusing on service as well as price.

“It’s about customer service, we listen to our customers, use customer feedback and feedback from Facebook followers,” he says.

Harris says Appliances Online has also expanded its distribution to offer free next day delivery, expanded its range and moved into smaller appliances which was up 78% on the previous year and introduced a new 24/7 customer support team which “seems to be giving customers comfort buying online.”

“Really it comes down to service though, people are looking for great service and that is lacking in retail across Australia,” he says.

The sales surge isn’t ending at Christmas for the retailer with Harris saying January is set to be Appliance’s Online’s biggest month on record.

Craig Shulman, senior IBISWorld analyst, says there are two significant trends in the sector which it appears Appliances Online has managed to overcome.

“Across the board, appliance and consumer electronics are witnessing significant price deflation so you have TV manufacturers making televisions much more cheaply and home brand style appliances like toasters and heaters are entering the market at lower prices through discount stores,” he says.

“Secondly, a significant amount of white good demand is driven by capital expenditure on private dwellings, so when a household chooses to renovate or buy a new house they would be constantly investing in new white goods as well, which make up one third of the appliance market; and because this has seen subdued demand this has also added concern to the appliance retailers.”

However, Shulman says online retailers like Appliances Online can use the inherent advantages in operating a pure online model to defy these issues.

“Like many industries, online appliance retailers get to enjoy several advantages by bypassing a wholesale route and not having to bother about setting up a shopfront,” he says.

“At the same time they are also able to provide a similar amount of service in terms of easy delivery as even in bricks-and-mortar stores they have to deliver.”

Shulman says online retailers also have the ability to supply a wider range of goods and these are general advantages of online retail which have had a major impact in the appliance sector.