Argos - the digital pioneers
AS A child, I remember thoughts at this time of year turn to what you would like at Christmas. For inspiration there was one all encompassing source, the Argos catalogue. Argos first introduced its hefty tome in 1973 and at its peak 20 million copies of the biannual publication were printed. This is now set to change as part of a �300 million modernisation plan announced by its new CEO John Walden.
The announcement covers a five year plan involving spending �100 million in each of the next three years with an aim to increase sales from �3.4 billion to �4.5 billion by 2018. The plan is wide ranging and includes the closure of 50 stores and the relocation of 25 more as leases expire over the next five years. The stores themselves will change as well. The focus will still be on having a strong retail presence but used more as collection hubs and for customer service. Customers will be driven to using mobile devices and in-store wi-fi to order online instead of the laminated catalogues and little pens and paying in store after queuing up.
Argos recently announced that multi-channel sales now account for 51% of its total sales with 7% coming from mobile alone. Considering its sales figures are in the billions that is a tipping point in terms of volume coming from the web rather than the high street. Argos in my opinion is one of the pioneers and leaders of e-commerce in the UK. They were one of the first to allow customer reviews on their own product lines on its website. Its introduction of a click and collect and online reservation system again massively increased it online sales helping it to the position it is today.
So from a sales point of view I completely see why they are doing this and reacting to the change in customer activity. They will no doubt continue to innovate online and invest in digital channels and grow both the revenues and profits because of that strategic belief and investment. However I have a nagging worry from a branding point of view.
The new CEO has said it would be ‘foolish’ to pull the main catalogue now as 85% of customers still use it before buying. But he also admitted that it may decline ‘precipitously’ as sales shift online. Some commentators have said that it helps it move away from the risk of being seen outdated but I think that’s naive. The catalogue is, I’m sure, expensive and a pain to produce. Its place in our homes though is branding most retailers would kill for.
n the next few weeks you will all be inundated with glossy mags from supermarkets and other brands trying to get mindshare and table space. The Argos catalogue sits as a reminder of its place as a warehouse of everything you might need. If they stop the catalogue all together that little, albeit very weighty, reminder in your homes goes and then they have to rely on planned media campaigns and people walking past the stores to get them to use them. Argos has already proved itself as a digital pioneer and leading e-commerce offering with incredible and growing online sales. I hope it continues though to think of its catalogue as part of its distribution and marketing mix and not part of an outdated history without benefit.
Tim Youngman is head of digital marketing at Archant follow him on twitter @timyoungman