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Greater than the sum of its parts

The backbone of the electrical goods repair industry across Europe, ASWO provides complete spare parts logistics solutions that allow retailers to provide value-added servicing and repairs. To find out more, Jack Cheeseman spoke to Markus Pastor and Nick Viney.

ASWO’s distribution centre in Germany

EXCLUSIVE

The roots of the ASWO business stretch back to 1968 and a small TV repair business in a German village. Astrid and Karl-Börris Aschitsch encountered issues sourcing spare parts for their customers’ products, so they started looking for solutions and around 1974 the business moved into wholesale and became the ASWO that we know today. Fast forward nearly 50 years and the company now operates from 27 locations, supplies 38 European countries and offers more than 15 million spare parts from across 3,000 different brands. These include the consumer electronics and domestic appliance industries.

In 1987, the French subsidiary of ASWO was launched – this became the second pillar of the business, alongside the existing site in Germany. Over the years, offices were built up in many different countries and only at the beginning of this year, ASWO’s new 33,000sqm Northern European distribution hub was opened just outside Paris to complement the German site.

Markus Pastor started at the company from a young age, working weekends and holidays in the warehouse first of all, before moving up and contributing to the growing business.

In 2004, he started working with the French subsidiary of ASWO and then eventually took over this part of the company in 2007. At this time, he also took on the title of CEO of the international business.

Meanwhile, the UK arm of ASWO was established in the late 1980s with an appointed franchisee; by 2017, ASWO UK became a subsidiary in its own right and Nick Viney joined in 2018 as Head of UK Sales to lead the division. Since then, offices have been set up in Coventry and there is now a team of five people managing this side of the company.

“It is our loyalty to customer satisfaction that got us where we are today,” Markus Pastor tells ERT in this exclusive interview. “The founder himself was like one of our customers so we’ve always been completely faithful to the trade. Across Europe, we have complete loyalty for the professionals that work in the industries we serve; we only work B2B, so we never make a margin from the end consumer.

“This is the reputation we have built,” he continues. “We respect our own values and those of all our customers, and it circles back and proves to work well for us.”

Mr Viney adds: “Our unique position in the industry – certainly in the UK – is that we only operate in B2B relationships; the majority of our customer base is repair organisations, so if a retailer has its own repair company that they use, we provide the spare parts logistics to that company, plus technical support. Our whole ethos is around supporting professional technicians to repair products. One of our core messages is to help extend the life of an appliance.”

Mr Pastor reiterates the point, saying that none of ASWO’s competitors are solely dedicated to the trade.

Q&A

Q: The ‘Right to Repair’ has really come to the forefront now – how is that affecting the industry and your business?

Nick Viney (left): It’s something that has been talked about by the Government and various industry bodies for quite some time; it certainly now seems to have some teeth with various dates being banded around. For example, from April 2021 manufacturers of certain products have to make spare parts available for up to 10 years.

It should be easier for appliances to be repaired, with common tools and nothing specialist required. This movement is gaining a lot of momentum and it’s clear that manufacturers are starting to really get things in place. ASWO is already talking to some about supporting them with spare parts and logistics solutions.

Markus Pastor (left): The right to repair act has been tremendously positive for us and it really supports our vision for the future, which is that we need to save as many appliances as we can and pollute as less as possible. ASWO is the service hub – dedicated to protecting people’s life qualities and their environment for the next 200 years.

The feedback we get from our customers, which is a huge compliment, is that whenever they look into our database, they say if ASWO doesn’t have it, it doesn’t exist!

We have struggled in the past where we weren’t allowed to get certain spare parts and we were confounded to prices that were completely out of reach, but hopefully as legislation comes in repairing will be easier and we’ll encounter less barriers.

Q: What’s the potential for ASWO in the future then?

NV: The potential for us is massive because of our unique position of supporting manufacturers and the repair industry – there’s never any conflict there. The sole purpose of ASWO is to support the electrical repair industry with parts and information.

Q: How does ASWO work with its partners in the electrical retail industry across UK then?

NV: A lot of manufacturers share their technical data with us, which is a real strength of our company. Not many support companies like ours have the European footprint like we do, so products that are heading out of the UK have to have spare parts provision. We have that platform.

Across Europe our work is also to enable the retail trade to provide spare parts to end consumers, whether through direct delivery or an off-the-shelf solution, with ASWO always remaining anonymous to the end consumer.

This enables the retailer to provide a service to the customer themselves and allows them to retain the margin if the part has to be paid for. Whether it’s a bulb for the fridge or full- blown new compressor gas repair, the indies – more so than the big chains – will have local customers for life and will really want to support them and hold on to them.

MP: Repair professionals and retailers have a chance to generate new revenue by connecting with their customers through a service. It’s the opportunity to gain customer loyalty – if you are the helping hand the first time and the customer has a positive experience, you will be their lifeline again and again. Our purpose is to help these partners offer the best level of service.

So our goal is to pretty much plug our system into the retailer’s existing infrastructure for them to be the best at whatever they do.

Today we have 80,000 technicians and professionals that we serve in Europe, and even the most isolated retailers that have never offered servicing or repairs before can become efficient in this area.

Q: Historically, ASWO’s foundation is in brown goods repair, but what is the biggest part of the business today?

NV: From the UK perspective, white goods today would be our most dominant market, but we’re still very strong in our core brown goods repair business.

MP: Simply focusing on white and brown goods, I would say it’s a 60/40 split. Today with our range at 15 million SKUs we want to have everything that a technician would need to service a household. From TVs and hi fi systems, smart phones and computers, to dishwashers and microwaves.

In the past, the brown goods sector suffered when consumers started throwing products away rather than repairing them, so spare parts started to reduce. But now, thankfully, the trend is changing.

NV: We do have a throwaway society still, but there is a lot of momentum now towards repair. In times of austerity, people would generally think to repair before replacing – it’s an economical point of view, and that really fits with the ASWO ethos.

Television screens are getting bigger and, consequently, the more expensive they are; therefore, repairs are considered now for a longer product life.

In white goods, I’ve been around spare parts for 15 years. There is a lot more technology coming into domestic appliances, like ovens with video screens and programming your washing machine from your phone. But I feel consumers are less inclined to go with technology on appliances.

There are more environmental concerns today and a lot more consumer awareness around electronics waste.

Q: Tell me about the new distribution hub in France?

NV: So, our warehouse in Northern Germany was pretty much at capacity, so in order to help provide expansion in the UK – although it wasn’t built solely for the UK – we built a bigger facility in France. It provides 33,000sqm of storage space. We did have another warehouse in France – that was just 5,000sqm – so this extra capacity enables us to stock more products for next day delivery. Our service into the UK will be much quicker; today we have an order cut-off time of 5.30pm for next day.

MP: We’ve experienced huge growth in France and other bordering countries so we’re lucky that we have this new logistics hub because we would have never been able to manage the growing demand.

We were very central in Germany but we realised that it was not possible to have one place to do everything for everyone. So we looked at the French subsidiary and made this an international hub. We invested over €30 million into this project.

Q: How has COVID-19 affected your business?

NV: ASWO was fortunate enough to carry on throughout the COVID crisis; some of that has been because of our diverse customer base, as not everyone stopped work. The French very quickly enabled all logistics staff to go to work – providing them with the documentation to travel – so the supply chain there didn’t really slow down.

In addition, we have a technical forum called EURAS, a subscription service for white and brown goods repair companies for their technicians. Obviously during COVID people were watching their bills and cutting back on luxuries (on things like subscription services), so we extended peoples’ memberships without cost to try and help them along. We also offered extended credit terms to try and help them through.

MP: We experienced some growth during this time. We knew that whatever product was not repaired before the crisis, it would need to be done during or after it.

The UK has always been one of the biggest spare parts markets in Europe, but for us it was the smallest business we had in the early days. It was a franchisee who was managing the UK for us in the beginning, but then we moved the business to a subsidiary and started pretty much from scratch. But now, I’m very happy that we have Nick in place – he knows the market very well.

I learned from my father [Javier Pastor – one of the Founders of ASWO] that you can’t have a ‘copy and paste’ format, in that French people work differently to English people, compared to German people and so on. We’ve always respected the local rules and local principles, and although we now have a very powerful hub in Paris to support the UK, it’s important that the UK team adjusts it to their use.

Q: What are your plans for the future?

NV: ASWO is a very organised company – decision-making is always for the long term. From a local point of view, we will continue to recruit more people and build the team at our Coventry offices.

The main priority today is to continue to raise awareness of ASWO and its capabilities in the UK market. We’re still relatively unknown, which is a great opportunity for us, but it’s a priority to establish more local partnerships with retailers and manufacturers.

If a customer has a problem or need and ASWO can help them resolve it, we become a valuable partner and, over time, we both grow profitably together with them.

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