Queues in Argos stores would become a thing of the past under the ambitious vision of new managing director John Walden as he reinvents the business as a “digital retail leader”.
In a radical departure for the retailer, laminated catalogues, pens and paper will be banished from shops and replaced by technology such as web browsers, and the prime purpose of Argos stores will be as collection points for products already ordered online, increasingly using mobile devices.
At present, Argos shoppers face queuing three times – to select, to pay and to collect, often after a lengthy wait on famously hard plastic chairs – but in future a customer could “easily” be in and out of the shop within a minute, said Walden.
In a decisive shift, Walden said that from now on everything Argos does will be explicitly “to support a digital relationship with our customer”. Walden said: “Argos can be the model of digital retail.”
Walden added: “Every retailer says they’re a digital retailer. There’s a big difference between saying ‘we’ve got the channels’ and saying ‘we’re going to be a digital business, period’. I believe Argos is in a unique position at a unique time in retailing.”
Argos will invest £300m in a five-year transformation plan that will include improving the product range, IT and fulfilment to support the push into digital business.
In a symbolic as well as commercial change, the retailer will also reduce reliance on its famous paper catalogue, although it will not entirely be phased out for the foreseeable future.
Walden said: “The roles of stores and the catalogue will change. They’ll be crafted to support the digital offer.
“Customers will use technology. We don’t need three queues – we could even use technology to know that you’re on your way to the store. First and foremost, we want people to make their decisions online.”
Walden was particularly excited about the “explosive” growth of mobile commerce, which has doubled to now account for 7% of total sales, or more than £100m. “Mobile will have a more dramatic impact on retail in a short time than online did,” he forecast.
Walden was emphatic that Argos’ extensive network of 739 stores is a strength, not a weakness, as services such as click-and-collect grow in popularity and pure-play retailers increasingly make use of bricks- and-mortar distribution networks. About 75 stores will shut or relocate in the next five years, but Walden said: “We have an estate that contributes cash and profits and gives us tremendous flexibility. When online retailers are using networks of collection points, that says fulfilment is becoming a big deal.”
He maintained that store staff would continue to be central to Argos, but increasingly they would focus on service, such as answering questions and resolving problems. “People prefer people over digital technology sometimes,” he said.
Argos’ benchmark operating profit fell 3% in the first half to £3.3m on sales up 0.6% to £1.68bn.
Argos to leave catalogue heritage behind
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Walden unveils digital vision for Argos