Mobile shopping boosts Argos owner Home Retail Group

Home Retail Group, the owner of Argos and Homebase, has revealed that mobile commerce has helped drive a “good first half”, as it announced its results for the 26 weeks to 31 August 2013.

Argos, which launched new Apple and Android smartphone and tablet apps in the period, saw mobile commerce grow 124 percent to account for 16 percent of total sales. Internet sales, including check and reserve, continued to grow, reaching 43 percent of Argos’ total sales.

Terry Duddy, chief executive of Home Retail Group, said: “The group has had a good first half with both businesses delivering successive quarters of positive sales performance and market share gains.

“Argos performed well and recorded its fifth consecutive quarter of like-for-like sales growth. It has continued to grow its internet sales, powered by the growth in mobile commerce which now accounts for 16 percent of Argos’ total sales.”

Transformation plan

Argos is in the middle of a five-year transformation plan, outlined in October 2012, to reinvent itself as a digital retail leader, moving away from its catalogue-led roots. The company said that it is making “good early progress” on this transformation plan, and that it is confident it will achieve its full-year 2014 milestones.

The transformation is dependent on an ambitious technology agenda, Argos said, and to this end it signed a contract with Accenture in the first half for the development and ongoing maintenance of its systems - a transition that has been “successfully managed”, the company said. It implemented a solution based on Oracle Retail Advanced Inventory Planning, as well as Oracle Retail Merchandising System, with application management outsourced to Accenture.

Digital future

One part of the plan is to reposition Argos’ channels for a digital future. The company said that its mobile apps have now had 1.6 million downloads, which has led to website visits from mobile devices growing by more than 70 percent. This has helped increase Argos’ multi-channel sales to £889 million, representing an increase from 51 percent last year to 52 percent in 2013.

As well as launching new and improved mobile apps, Argos plans to make further digital developments during the second half of the current financial year, including increasing the consistency in the customer journey across all digital channels by implementing common features such as ‘one click’ reservation, single customer log-on and a persistent shopping trolley across all digital channels.

It also aims to make the mobile apps transactional, so that customers can order and pay for products for home delivery, as well as reserve products for store collection.

In preparation for the Christmas season, it will also launch a digital version of its Christmas gift guide catalogue, which will contain “richer content and an innovative and intuitive shopping journey”. Meanwhile, Argos has used augmented reality to enhance the catalogue version of its gift guide.

As the Argos store is still a key part of the business’s multi-channel model, the company has developed a digital concept store that will enable it to test out digital and store innovations, such as fast-track collection for customers who have pre-paid for items online or via a mobile device. There will also be tablets in the stores to replace catalogues and the stock check devices, and staff at these stores will be equipped with technology to provide more support to customers in store.

Data analytics

Argos is also investing in analytics tools, and has started implementing a new dynamic price optimisation tool to automate pricing recommendations.

In addition, it is working to improve its customer data analytics to get the most out of its database of eight million registered customers.

“Argos expects to send around 100 million customer emails with bespoke product recommendations, including around 25 campaigns each week triggered from actual online browsing behaviour,” it said.

Homebase’s multi-channel offer

While Argos’s total sales in the period showed an increase of 1.8 percent to £1,717 million, Homebase’s total sales increased by 4.4 percent to £822.3 million.

Homebase’s multi-channel sales contributed to this, as they grew 28 percent year-on-year, to represent six percent of the business’s total sales. This growth has been driven by increased website traffic, and the introduction of improved delivery options, the business said.

Wifi is also available in all Homebase stores, and the business continues to use social media, to engage with its customers, for example, with ‘how to’ YouTube video guides.

Argos recently joined forces with eBay in a partnership that allows eBay customers to collect parcels from Argos stores.

Copyright © 2013 IDG Communications, Inc.

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