Appliances Online: John Winning on technical glitch that cost company $100k
FOR most of us, the biggest consequence of a typo is a bit of embarrassment.
But for Appliances Online founder John Winning, a simple mistake ended up costing almost $100,000.
The incident occurred late last year, when a technical glitch meant a Kitchenaid mixer which is usually worth $799 was accidentally listed for just $281 on the site.
Within 12 hours, 190 mixers had been ordered at the wrong price — meaning the 34-year-old faced a tough choice: sacrifice almost $100,000, or risk potentially losing 190 customers forever.
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Mr Winning said the solution to the monumental pricing “stuff up” was easy.
“It was a question of, do we disappoint hundreds of customers, or write off the loss? So it was pretty simple,” he told news.com.au, explaining he decided to view the staggering loss as an “investment in customer relationships”.
“Word of mouth is the best form of marketing, which is why you see a lot less of our ads on TV.”
It’s a simple but radical mindset compared to how many other retailers choose to operate, but it’s one the company has stuck to since day one.
It’s also the reason why, when an elderly woman called Appliances Online for help installing a fridge and dishwasher she had purchased from a competitor who left the items outside her home recently, staff arranged for the items to be installed.
And why Mr Winning has been known to call his company’s 24/7 customer service line in the wee hours of the morning to see for himself whether service is up to scratch.
“The company is successful because we don’t question investments such as that mistake over keeping customers happy. One of our company values is impress every customer — and ‘every’ is the most important word,” he said.
Mr Winning also told news.com.au how he managed to transition from mediocre student — he “mucked around” too much at school and flunked the HSC, so uni was never an option — to successful CEO at a time when many other Aussie retailers are struggling.
After working as a waiter at 17 and toying with the idea of driving a water taxi, Mr Winning eventually landed a job as a door-to-door salesman, but after a brutal dog attack landed him in hospital, his father pushed him to quit and join the family’s 113-year-old business, The Winning Group.
Mr Winning was initially relegated to picking up and delivering stock but eventually convinced his dad to let him go into sales — although he was banned from the complicated “kitchen stuff” and was only allowed to sell fridges, washing machines and dishwashers.
During that time, Mr Winning realised customers loved looking through catalogues, but he knew they were expensive to distribute, and dated quickly.
“I thought maybe the internet would be a cheaper way — I knew eBay existed, and thought we could have an eBay store,” he said.
But he took the idea to his father, and ended up scoring a $50,000 loan which helped him build Appliances Online in 2005 at just 21.
The proviso was the new company couldn’t use the Winning name, so when it flopped, which Mr Winning Snr was certain it would, it wouldn’t tarnish the family business.
In the early days the company had a 1300 number which diverted to Mr Winning’s own mobile phone, which meant he was taking work calls while at the pub with mates at all hours.
But it paid off. Today, Appliances Online is Australia’s largest online appliance retailer and Mr Winning is also now the CEO of the fourth-generation The Winning Group, which employs around 700 staff across Australia and includes bricks-and-mortar retailer Winning Appliances, Appliances Online, clearance outlet Home Clearance and national installation and logistics company Winning Services.
He said generally, Aussie retailers were falling behind many other countries when it came to embracing online sales, and said there was no excuse for complacency.
“The market is as big as ever and people love shopping. I don’t think retail is dead, it’s alive and kicking. But if retailers are just putting stock on shelves and putting a price on it, they’ll cease to remain relevant,” Mr Winning said.
“The internet has sped things up and allowed global brands like Amazon and eBay to enter the market.
“It has taken away the advantage that traditional retailers had, but the internet doesn’t kill retail, it kills bad retailers.”
Mr Winning acknowledged the glut of local retailers which have collapsed recently — but said the last “good” retailer he had seen go out of business was iconic Sydney department store Gowings, which shut down in 2006.
According to IBISWorld’s 2017 list of the top 500 privately owned companies in Australia, Winning Appliances took out the 121st spot, with $434 million in estimated revenue and 7.9 per cent growth.
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