As Argos TV prepares to make its final broadcast, Retail Week looks at the TV shopping market and why Argos decided it was not right for it.

Why are we talking about this now?

Argos is to axe its TV shopping channel Argos TV just two years after its launch.

Why did it move into TV shopping in the first place?

The channel, which was available in more than 10 million UK homes, offered an opportunity for the retailer to reach a captive audience and allowed it to target an audience which may not have migrated online yet, in particular the elderly.

Overheads are reasonably low and interactivity can give an almost personal service to customers. Large, established brands such as Liz Earle started out on TV shopping channel QVC.

Did it not work for Argos?

The retailer insists the closure isn’t because sales from the channel are below expectations, but rather a strategic decision as it aims to focus on both improving its digital business and targeting upmarket customers.

How is the TV shopping market fairing?

It’s fairly stagnant, according to Verdict analyst Patrick O’Brien. The market was worth £701.2m last year, and Verdict predicts this will fall to £694.1m in 2013.

“There’s not much growth opportunity,” he says. “The digital switchover offered an opportunity as people who didn’t have access, in particular the unemployed and the elderly, all of a sudden had these channels for free.”

O’Brien believes there is little room for new entrants to the established TV shopping markets and the existing players are simply fighting over market share.

Is Argos right to ditch the channel then?

Yes, according to O’Brien, who believes that even if Argos TV was profitable, it is worth dropping it to cultivate its rebrand as a digital leader.

“The perception is that Argos has an outdated business model. It won’t be able to shake that off when it has a TV shopping channel,” he says.

O’Brien also points out that the new upmarket customer which Argos is trying to attract is not the traditional demographic of TV shopping channels.