Argos at 50_ How the ‘laminated ebook of goals’ modified UK retail
As Argos turns 50, Retail Gazette seems again at the way it turned a shocking pioneer of UK retail.
Argos is a enterprise that evokes reminiscences for a lot of buyers.
Be it {the catalogue} wherein they circled the Polly Pocket treehouse or Nintendo Gameboy that they needed Santa to deliver; or the Elizabeth Duke necklace their first boyfriend purchased; or certainly the shop the place they purchased the toaster or pans for his or her first house.
“It does have a robust emotional reference to the UK inhabitants,” admits Argos buying and selling director Matt Leeser. “Prospects love the model and have liked the iterations of the model over time.”
Tomorrow marks the fiftieth anniversary of the enterprise, which opened its first retailer in London’s Outdated Road on twenty first July 1973.
Richard Tompkins, the founding father of The Inexperienced Defend Stamp Buying and selling Firm, was the mastermind of the idea and determined to open the shop after he was impressed by the brand new phenomenon for catalogue procuring that had taken off within the US.
Which means ‘swift’ in Greek, Argos was born. Its shops mixed the comfort of looking merchandise at house with the face-to-face contact of a neighborhood store.
The idea took off and the retailer grew to be a stalwart of the excessive road that had greater than 800 shops at its peak.
Though some might have a look at the enterprise – as soon as famed for its little blue pens and what comic Invoice Bailey termed the ‘laminated ebook of goals’ – with a heavy dose of nostalgia, the retailer was – and nonetheless is – a pioneer that has modified how all of us store.
“You may’t have a look at the UK retail panorama and never admire what Argos has carried out since 1973 till right now,” says Leeser.
“It was a precursor to how we store digitally right now. When Argos opened, house procuring meant taking its well-known catalogue house to peruse at your leisure and determine what you needed to purchase earlier than going to the shop to order and acquire.
“These days that perusing, and shopping for, is essentially carried out on-line and Argos performed a job in making {that a} actuality.”
The truth is, Argos was one of many first UK retailers to go surfing, launching its first web site again within the Nineties. It’s now the third largest retail website within the nation with greater than 1.6 billion visits final yr.
Digital now accounts for the majority of gross sales with 73% of income originating on-line.
Surviving within the age of Amazon
Rewind a decade and there have been many that will have doubted that Argos would have survived to see its fiftieth birthday.
Retail watchers questioned what position Argos would have within the age of Amazon, when buyers might select from the web large’s seemingly limitless vary and have it delivered to their house the following day.
Nonetheless, leaning into its ‘swift’ title, Argos constructed an industry-leading quick fulfilment infrastructure, which is so speedy that it beats even Amazon on the comfort stakes.
Customers can order earlier than 5pm on Argos’ web site and obtain their gadgets the identical day, or acquire in its many retailer assortment factors, proving the power of the multichannel mannequin.
“It’s fairly highly effective,” says Leeser. “That fulfilment proposition, with 90% of the UK accessing same-day house supply – no different retailer provides that. Prospects love us for it.”
The truth is, Argos truly created the click-and-collect mannequin. Again in 2000, Andy Morrey, who was Argos’ head of ecommerce on the time, launched the idea to serve the various buyers he had recognized that most popular to browse on-line however go to retailer to examine and acquire it.
Now, it accounts for nearly half (46%) of Argos’ on-line gross sales and is an idea that may be a large gross sales channel for a lot of UK retailers.
Merging Argos and Sainsbury’s
Argos’ assortment factors have definitely expanded since its 2016 acquisition by grocery store large Sainsbury’s.
The power of Argos’ digital prowess and supply capabilities undoubtedly performed an enormous position within the grocer’s choice to shell out £1.4bn on the chain.
Sainsbury’s believed it might increase gross sales development, enhance supply, and cross-sell gadgets throughout each buyer bases. The idea proved true and the pair have proved complementary bedfellows.
“Prospects actually love the comfort of [shopping Argos] while doing a weekly store,” says Leeser. “Sainsbury’s has 35 million clients each week. To have Argos entry while they’re doing that weekly store is de facto highly effective and helpful for them.”
The financials are additionally wanting sturdy. Regardless of the weak normal merchandise market, Argos gained market share in its final monetary yr and gross sales improved all year long, culminating in a 9.3% enhance over the important thing golden quarter.
The momentum has continued with a 5.1% gross sales rise within the first quarter of its present yr.
In the meantime, motion Sainsbury’s has taken to rework Argos’ value base, means the enterprise is “significantly extra worthwhile and extra aggressive than pre-pandemic”.
One of many methods Sainsbury’s has improved Argos’ profitability over time is by closing the retailer’s standalone shops and changing them with shop-in-shops in its supermarkets.
When Sainsbury’s purchased Argos it had greater than 700 shops, right now it has simply shy of 250. Certainly, over the previous yr it has closed 45 Argos branches and opened 25 inside Sainsbury’s shops.
Leeser insists it now has “extra factors of presence” than ever earlier than as a result of assortment factors and shop-in-shops it has inside supermarkets. When mixed with Argos shops, it has 1,100 bodily touchpoints, which he says makes the model simpler to entry for buyers.
There’s extra to Argos
Leeser believes there may be nonetheless a lot development to go for and is set to point out clients that there’s “extra to Argos”.
“You’ll see us begin to speak extra about this and ensuring clients admire the breadth of the merchandise that we provide,” he says.
This includes selling the foremost client manufacturers that Leeser says clients don’t admire that Argos shares. “The Apples, Samsungs, and Sonys of this world,” he explains.
It is usually vying to increase the retailer’s product vary.
“We’ll be doing much more to inform clients not solely in regards to the 60,000+ merchandise we promote right now, however what we’ll be bringing on within the months and years forward,” including that will probably be “broadening out” its vary to assist this push.
Alongside this, Leeser additionally plans to additional increase its on-line and supply proposition as “ease of entry and velocity of comfort” are Argos’ key USPs.
He mentions simply a few initiatives it has labored on of late to enhance its on-line expertise, together with including ‘e-mail when again in inventory performance’ to inform clients when an out-of-stock product is on the market to buy once more.
This has proved notably fashionable on air-fryers, which Argos has offered 2,000 gadgets a day of during the last 12 months.
It has additionally added a function to its web site that helps buyers establish essentially the most cost-efficient home equipment, an important device for buyers grappling with rising vitality payments.
On the fulfilment facet of issues, Sainsbury’s is investing £90m in automation in its Daventry warehouse to assist bolster Argos’ industry-leading supply proposition.
“We predict we will enhance the velocity at which we decide and distribute merchandise across the UK,” says Leeser.
Because the enterprise hits the 50 yr milestone, it’s clear that Leeser has no intention of resting on his laurels and insists that Argos will proceed to be a retail pioneer.
“We’re excited in regards to the future. While you have a look at the latest outcomes, the formulation of Sainsbury’s and Argos collectively has definitely paid dividends and clients are persevering with to vote with their ft and their clicks in procuring with us. We’re very eager to maintain that momentum going.”
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