To do that last year it hired its first own brand head in Joanne Savage, tasking her with the job of growing its own brand portfolio. It already owns brands such as Bush and Chad Valley, now it’s looking at widening that range with a new House of Heart homewares range.
Own brand is key for Argos. Its product mix is currently hugely reliant on branded goods which makes it difficult to compete with rivals on price.
It also makes it harder for Argos to convince consumers there is a there is a reason to shop with it, rather than other retailers that offer a wider range of own brand and branded products. The store claims that 70 per cent of the population shops at Argos, the problem is a number of those only do so once or twice a year and it wants to increase that.
Own brand gives it an opportunity to do that by offering customers exclusive products across a range of price points that they can’t get elsewhere.
Take a look at Argos’ recent marketing, however, and the focus is still plainly on the big brands. It promotes Samsung cameras, Kenwood food mixers and Canon electricals in its TV ads.
Head to the website and it’s the same story. Brands such as Motorola, Seiko and Adidas are promoted ahead of its own Bush, Bugg and Chad Valley brands.
No doubt the big brands pay a hefty premium to feature in the ads knowing they’ll get an uplift in sales. Argos would have to eschew that if it wants to promote its own brand items.
However, Argos’ over reliance on branded products in its marketing is just as much of a problem as it is in the rest of the business. At the major supermarkets, where own brand accounts for more than 50 per cent of sales in some categories, marketing their own ranges has helped add legitimacy to the ranges, improving trust and changing people’s perceptions of own brands so they see them as a valid alternative to brands, rather than a cheap, but poorer value, option.
Retailers investing in and pushing their own brand products has dramatically improved their appeal. That investment isn’t just product side, but also in the marketing.
That’s why Argos’ decision to appoint a new agency, The House Worldwide, to look at how it can promote its brand offering is welcome news. Argos needs to position itself not just as the best place to find great brands but the place to find great own brands if it wants to boost its appeal and set itself up for long-term success.