Argos’ rebranding and digital transformation
Adapting to multichannel consumers
Argos is a British retailer who pioneered catalogue shopping in UK and Ireland.
When I first entered an Argos store six years ago, I still remember how amazed I
was when I couldn’t see any products, not even displaying shelves. All I could see
were huge product catalogues lying around the store that was at least 400 pages
thick, along side with large promotional posters on the walls. In order to get
what I wanted, I have to look for the product categories alphabetically on the
index, and then flick through the pages to check product images, prices and
specifications. Next to the catalogue was this bulky grey device that looked like
the hybrid of a calculator and a old home telephone, where I was required to
enter a unique product code to see if the product is available. Before checking
out at the cashier, I had to write down these codes for all my items on a little
paper form. My order was ready for me to collect after a while. I must admit that
having to flick through the humongous catalogue to get my list of items was a
painful and time-consuming process.
Argos’ business model can save up lots of floor space and labour cost for
restocking items on product shelves. Comparing to other high street retailers,
they are offering a much greater variety of products in a relatively small space.
But more importantly, it is the shopping experience Argos offers that makes the
retailer stand out. It’s like an offline version of Amazon, but they are focusing
mostly on essential household items instead. Behind every store is a huge
warehouse where the transactions are being fulfilled, with the products being
delivered to the collection point via a conveyer belt to the customer after their
payment. However, as people are gaining more confidence in online shopping, ecommerce giants like Amazon can easily overtake Argos in terms of product
selection, not to mention its Amazon Prime membership that offers unlimited
free next day deliveries. The only benefit of Argos nowadays is its proximity,
allowing customer to inspect their purchased items on spot and exchange faulty
ones immediately. Today, I went back to Argos in Holborn looking for a full body
mirror. I must admit that the shopping experience had completely changed, in a
positive way.
Universal Appeal
The first thing I noticed was the overhaul of the store interior in the new Argos
outlets. As part of the rebranding effort these years into a digital concept store,
wooden floors have been changed to bright white tiles; bulky product catalogues
have turned into slim and glossy iPads; and digital screens have replaced
promotional posters on the wall. The interior of these new outlets are very
spacious, resonating the feeling of an Apple store, giving customers a sense of
familiarity, stylishness and credibility comparing to the old store layout. Their instore design and colour tones are matching closely with the Argos app interface,
as well as their official website. Having a universal appeal will increase brand
recognition and brand recall of Argos amongst consumers. This is essential
nowadays for brands and businesses when consumers tend to adopt a
multichannel approach, whether looking for new products or carrying out
purchases.
Warehousing and fulfillment
Argos’ business model, in a sense, is setting up and maintaining mini warehouses
and fulfilment centres in popular strategic locations in different cities around the
UK. The Guardian estimated 96% of the country’s population was located within
10 miles of an Argos store. Although the stores are still quite packed with
customers, most of them are not browsing electronic catalogues anymore.
Instead, the majority them go into Argos just to collect what they have reserved
online earlier, with the reservation code ready in their smartphones. There is
also an option to request unavailable items from other Arogs to be collected later
in your desired store location. Besides providing standard shipping options, they
are even partnering up with logistics provider Shutl to offer same day delivery
services in 300 stores to surrounding neighbourhoods. If the customer lives
close enough, they can guarantee delivery within an hour.
Strategic partnership
Argos has extended their strategic partnership with eBay, providing a win-win
situation to both companies, and more importantly, their customers. On one
hand, eBay’s business sellers require a lot of third party companies to fulfil its
logistics and operational needs. On the other hand, Argos as a well-established
traditional retailer, would like to expose their wide range of afforfable products
to more young and tech savvy consumers, who are used to shopping online.
The deal had enabled more than 65,000 eBay sellers to provide click and collect
services to their clients all around the UK. Consequently, products of the Argos
outlet store and its sister companies Homebase and Habitats are always featured
on eBay’s product pages whenever it is relevant. Besides satisfying consumers’
multichannel browsing behaviour, it gives Argos a better ability to compete with
strong internet retail rivals like Amazon or Rakuten’s Play.com. What do the
consumers benefit? An even wider selection of products from a reputable seller
for eBay customers; the convenience of choosing to shop anywhere, anytime and
extra shipping options of collection in person at their nearest Argos outlet for
things they purchased on eBay, including hundreds of other brands and
partnerships. It also presents an opportunity to cross sell when consumers
stumble upon Argos products on ebay and also when buyers pick up their items
from collection points.
Argos had made a smart strategic decision to digitally integrate to serve the
rising number of multichannel shoppers. They leveraged themselves not as a
retailer, but a warehouse and inventory management expert to solve logistical
problems for their customers and business partners.
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