Argos wants to become the ‘destination of choice’ for homeware

Argos is putting a heavier focus on its own brand homeware, as it looks to grow into a £1.5bn own brands business by the end of 2018 – this would represent a third of its overall business.

Argos launched its new own brand range ‘The Collection by Argos’ yesterday (29 September), with a heavy focus on ‘design-led’ and ‘premium’ products. It considers homeware, specifically furniture, to be a “key priority”.

Alyson Lockley, director of own brands at Argos, says the launch of the new range marks the first time it has had a “full portfolio” for home.

She told Marketing Week: “There is a big opportunity on home. When people think about decorating their home, at the moment they don’t think about Argos and that must change.”

“We want to be the first destination for home and be known for great quality and choice.”

Alyson Lockley, director of own brands, Argos

To mark the launch of the new range, Argos is also introducing an above the line marketing campaign. Besides signing a five-month sponsorship of ITV’s Loose Women, the ‘Unleash your inner smug’ campaign will also include digital activity that will push out “inspirational” content.

Argos is aiming to have 80% of its homeware products designed in-house, something it believes will offer customers a key point of differentiation and create “universal appeal”.

“Not only are they homeware brands, such as Habitat, that you can’t get anywhere else, but also designs you can’t get elsewhere,” Lockley added.

“It’s about how we can broaden and differentiate our customer base. We are getting a broader mix of customers, so own brands play an important role in achieving this.”

Argos owner Sainsbury’s also owns premium homeware brand Habitat, with the grocer planning to open five mini Habitat concessions within its stores this year.

‘Good’ response from Sainsbury’s tie-up

In April, Sainsbury’s officially acquired Argos as part of a £1.4bn deal, with the big four supermarket stating it is looking to become the “leading food and non-food retailer of choice for customers”.

Argos is currently undergoing a transformation to become a “digital retail leader”, which so far has led to it becoming the first UK multichannel retailer to generate £1bn in mobile-based sales in 2015.

Speaking on its ongoing digital focus, Lockley added: “Almost half our transactions are digital, which was roughly less than a third two years ago. Consumers shop more across channels and are moving to mobile. Digital has been transformational for us. On Black Friday 70% of customer journeys started on mobile.”

The brand currently has 15 stores within Sainsbury’s, but it hopes to increase this to 30 concessions by the end of Christmas.

Yesterday (28 September), Sainsbury’s reported a 1.1% drop in like-for-like sales for its second quarter. However, there were positives to take from Argos as it pulled off a 2.3% sales increase for the same period.

In wake of the results, Lockley remains bullish about the future. She concluded: “Our number of concessions are quickly growing, and we are very excited about the opportunity of combining the Argos and Sainsbury’s customer base. The initial response [from Sainsbury’s customers] has been good. It’s all about giving consumers plethora of choice.”