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October 7, 2013 7:33 pm
“Sorry we missed you!” The four words every consumer dreads when waiting for an online order could become a thing of the past as web retailers battle to offer consumers quicker deliveries.
AO.com, which sells kitchen appliances, has become the first retailer to offer a comprehensive same-day delivery service for large items such as fridges and cookers.
The battle to come up with affordable same day – or even same hour – delivery is the latest frontier in ecommerce, with in-store fulfilment one of the few remaining advantages that bricks and mortar retailers still enjoy over their online-only peers.
AO.com, which is also considering an initial public offering, will charge consumers £29.99 to deliver large items such as fridges and cookers the same day.
John Roberts, the chief executive and founder of the company, said: “Research was coming back from customers saying they wanted same day service.”
The change was not simple. AO.com had to rejig its delivery infrastructure across the UK, but Mr Roberts is confident that the move would drive sales volume. “The customer can order in the morning and not have to take any time off work. The not having to take time off work is a good offset for £30.”
The move comes as online retailers such as Amazon are testing same-day – and even next-hour – delivery in some markets.
Elsewhere, companies such as Shutl, a London-based start-up that acts as an aggregator for courier companies letting customers have in-store items delivered to their home or work, have popped up to let smaller companies offer quicker deliveries.
Shutl last month signed a deal with footwear retailer Schuh that would let customers pay £4.99 to receive their shoes just minutes after they had ordered them online, or within an hour window.
Electricals retailer Dixons, meanwhile, started offering a same-day service on items ordered before 9.30am for £14.99.
DRL, the owner of AO.com, is considering a float of the kitchen business and has appointed Jefferies and JPMorgan to look into a public listing by the end of the year.
The company, which is valued at about £300m, was keen to stress that an initial public offering was just one option and that no decision had been made. “We are exploring all our options,” said Mr Roberts.
Revenues at the group have risen from £89m in 2009 to £260m for the year to March. Over the same period, profit before tax rose from £500,000 in 2009 to £7.2m for the year to the end of March, with the company benefiting from a strong presence on social media.
Despite being a purveyor of microwaves and vacuum cleaners, AO.com has managed to amass 1.3m fans on Facebook.
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