Retail Horizon: AO and Pret on the power of partnerships post-Covid

Pret’s UK managing director Clare Clough and AO chief operating officer Danny Emmett lifted the lid on the rationale behind their companies’ recent tie-ups with the likes of Amazon and Tesco in Retail Week’s latest virtual event.

The discussion marked the launch of Retail Week’s new strategic toolkit Retail Horizon 2021 – Winning Strategies to Navigate Disruption. The report analyses the macro-influences across society, technology, economy, policy, industry and culture to determine the trends that will shape strategies for next year.

The need to drive transformative partnerships emerged as one of the key strategic priorities in the report – something that both Pret and AO have already been pursuing during the health emergency.

Pret has started selling its products through delivery experts Deliveroo, Uber Eats and Just Eat, and launched its first ever retail range of coffee products, which are sold on Amazon and in 300 Waitrose stores.

“Seeking out those mutually beneficial partnerships and driving them is critical to our plan going forward”

Clare Clough, Pret a Manger

AO, meanwhile, has tied up with grocery giant Tesco to open its first ever physical stores. It will operate five shop-in-shop locations inside some of Tesco’s largest supermarkets as part of an initial trial.

They offer just two examples of how retailers are working together to emerge stronger from the pandemic.

Clough says the pandemic has shifted the way Pret thinks about such partnerships.

“I think these are really crucial. Seeking out those mutually beneficial partnerships and driving them is critical to our plan going forward,” she says.

“We’ve always had really great partnerships, but they’ve always been upstream – they tended to be with our suppliers or our logistics partner. Now, we are much more open with our thinking about how we take them into the customer-facing end.

“What we have is fantastic, freshly prepared food, we have highly efficient production systems – those are our strengths. What we don’t have is local distribution or broad national reach – there’s lots of areas of weakness we could develop over time, but it makes much more sense for us to work in partnership with people who have those strengths and work together to grow both businesses.”

“We see stores as being a way of engaging with new customers and introducing them to the brand, but very importantly it’s going where customers are”

Danny Emmett, AO

Emmett adds: “Partnerships are tremendously important for every business. The best businesses know what they are brilliant at and know what they need to be the best at doing, but they also know where they need to get a bit of support.

“We’ve got lots of deep partnerships with brands, we’ve got our own logistics, but we partner with other logistics businesses, we offer third-party logistics services to other businesses, so we are a very collaborative business as a general approach.

“We’ve agreed a five-store trial with Tesco – the first store in Middleton is live, it looks great and we are quite excited about the opportunity it might provide.

“We see stores as being a way of engaging with new customers and introducing new customers to the AO brand, but very importantly it’s going where customers are and offering convenience to a Tesco in-store customer, not just having lots of stores up and down the country. It genuinely is a partnership and one plus one equals three.”