Thursday, 8 October 2009

Can anyone think of any good reason to visit an Argos store?

Is it just me that thinks Argos are stuck in an 80’s time warp? Surely that decor was the same one 20 years ago? I know they are cheap and that’s a summary of their brand positioning. I know that there is a catalogue which is good to look through. However once I have decided what I might want to buy, I realise that I have to go in store.

What a drab experience that is likely to be. I will have to negotiate long queues to pay, my product may be out of stock and then I have to wait in a crowded waiting room to be called to A or B or C.

At Argos I am a number.

And when it is called, I have to fight my way to the counter through people whose number hasn’t be called but are hovering there anyway. The staff are usually young, untrained and pretty clueless. Overall nul points in the customer experience stakes.

What a different experience it could be?
Argos have the massive advantage over traditional catalogue companies of having a retail arm. So they have a window for their products. When internet shopping arrived, they could have positioned themselves as having all the advantages of internet shopping: cost and comparison all in the comfort of your own home, without the disadvantages: not being able to see or touch the product and get it same day.

Argos could have made their stores the place to go to see the products. Imagine your product was brought out for you to inspect? Or that they developed a virtual world where you could use the terminals to see products in 3D, turn them 360 degrees? There are so many ways that the shop could be made into a shopper’s heaven. My advice: get a great designer and a great customer experience expert and make a concept store to show shareholders what it could be.

In addition, Argos could have done a tremendous job on upsells. Once you are in the store there could be 100 ways to sell you something else while you’re there. Instead of which we are treated to the “discount” rack.

Way before the same internet promises, Argos were offering money back guarantee. But they stagnated on discount positioning and never took utilised their initial advantages.

Argos has survived so far but for how much longer? Owner Home Retail suffered a share fall end of September when Credit Suisse downgraded its recommendation to “underperform”.

Credit suisse had this to say a week ago “The downgrade is driven by our negative assessment of Argos, increasing our conviction that structural risks and increased competition are likely to restrict its ability to grow medium-term sales and earnings margins.Pricing analysis suggests that Argos' pricing model is under pressure.”

The discount route is being offered by many outfits now including the formidable Tesco Direct. With only price as a differentiator, little or no clear brand positioning coupled with a very average customer experience, can they survive the recession? The jury is out.

1 comment:

  1. Well said! I like the fact that you don't stop at pointing out the company's shortcomings, but explore proactive things it could have considered.