Argos repositions as ‘digital retail leader’

Argos is to close or move at least 75 stores over the next five years as part of a plan to transform the business into a “digital retail leader”.

Argos

The plan to close stores, whose fate will be decided on the basis of profitability and desirability of location, comes as the retailer unveils a £100m investment aimed at boosting its multi-channel operations.

Stores and catalogues will support the revamped digital offer. Argos says it will invest in its IT infrastructure to develop its online, mobile and tablet channels in a bid to make them its “primary channels for interacting and communicating with customers”.

“Stores will be focused on product pick-up and customer service for transactions that will increasingly be managed online or through mobile”, it adds.

The retailer has been buoyed by growth in multi-channel sales, which it says now account for 51 per cent of total sales. Mobile shopping represented 7% of total sales in the half-year, it adds.

Elsewhere, plans were unveiled to increase the size of its product range as part of an effort to bolster its appeal beyond the “less affluent customers” it says currently make up its customer base.

An increase in the number of exclusive products and “ranges to meet the needs of the broader target customer groups” are promised.

Investment in digital infrastructure will also boost CRM capabilities, Argos says, allowing for the provision of “more relevant and personalised offers”.

The shift to e-commerce will be reflected in its marketing mix, with money moving to digital channels.

Plans to repoint the business come as parent company Home Retail Group, which also owns Homebase and Habitat, reports pre-tax profit fell 37 per cent to £17.9m in the six months to the start of September. Sales fell 1 per cent to £2.5bn.

Argos’ transformation plan at a glance

  • Shifting the role of stores to focus on product pick-up and customer service for transactions made online or via mobile channels.
  • Investment in CRM to boost targeting.
  • Increasing its “universal appeal” by broadening product offer.
  • Exclusive brands to account for a third of total sales by 2018.
  • Shifting marketing budget to digital channels.

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