May 26 2013 Latest news:
Saturday, November 3, 2012
As I child, I remember thoughts at this time of year turned to what you would like at Christmas.
For inspiration there was one all-encompassing source, the Argos catalogue. Argos first introduced its hefty tome in 1973, and at its peak 20 million copies of the biannual publication were printed.
This is now set to change as part of a £300m modernisation plan announced by its new CEO, John Walden.
The announcement covers a five-year plan involving spending £100m in each of the next three years with an aim to increase sales from £3.4bn to £4.5bn by 2018.
The plan is wide ranging and includes the closure of 50 stores and the relocation of 25 more as leases expire over the next five years.
The stores themselves will change as well. The focus will still be on having a strong retail presence but used more as collection hubs and for customer service.
Customers will be driven to using mobile devices and in-store wi-fi to order online instead of the laminated catalogues and little pens and paying in store after queuing up.
Argos recently announced that multi-channel sales now account for 51pc of its total sales with 7pc coming from mobiles alone.
Considering its sales figures are in the billions, that is a tipping point in terms of volume coming from the web rather than the high street.
Argos, in my opinion, is one of the pioneers and leaders of e-commerce in the UK.
It was one of the first to allow customer reviews of its own product lines on its website and its introduction of a click-and-collect and online reservation system again massively increased its online sales, helping it to the position it is today.
So from a sales point of view I completely see why they are doing this and reacting to the change in customer activity.
They will no doubt continue to innovate online and invest in digital channels and grow both the revenues and profits because of that strategic belief and investment.
However I have a nagging worry from a branding point of view.
The new CEO has said it would be “foolish” to pull the main catalogue now as 85pc of customers still use it before buying.
But he also admitted that it may decline “precipitously” as sales shift online.
Some commentators have said that it helps it move away from the risk of being seen as outdated but I think that’s naive. The catalogue is, I’m sure, expensive and a pain to produce. Its place in our homes, though, is branding most retailers would kill for.
In the next few weeks you will all be inundated with glossy mags from super-markets and other brands trying to get mindshare and table space. The Argos catalogue sits as a reminder of its place as a warehouse of everything you might need.
If they stop the catalogue altogether, that little – albeit very weighty – reminder in your homes goes and then they have to rely on planned media campaigns and people walking past the stores to get them to use them.
Argos has already proved itself as a digital pioneer and leading e-commerce offering with incredible and growing online sales.
I hope it continues, though, to think of its catalogue as part of its distribution and marketing mix and not part of an outdated history without benefit.
Tim Youngman is head of digital marketing at Archant. Follow him on twitter @timyoungman
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