Editor's Comment

Argos, eBay, Kevin Costner, and importance of long-term planning

One of the most well-attended sessions of last week’s eDelivery Conference (EDC) was when Argos Stores’ central operations director, Andy Brown, was speaking.

Having just gone national with its same-day Fast Track delivery (which also offers super speedy collections), after spending most of the last couple of years re-engineering its logistics operations around a hub-and-spoke network of stores, it’s not surprising there’s a lot of interest in Argos.

Today we learned that Argos has seen sales and profits slip in the first half of its current financial year, and that has been coupled by an increase in operating costs.

The latter isn’t very surprising though, is it? A nationwide same-day delivery service isn’t the sort of thing you can pull out of a hat without so much as a by your leave. No, that sort of endeavor requires a significant investment in time and money.

Fast Track – and the recently announced extension of its partnership with eBay – show that Argos is committed to acquiring new customers in non-traditional ways. Brown said at EDC that Fast Track is already showing signs of appealing to people who wouldn’t previously have shopped at Argos. If they have a positive experience, who knows, they might start shopping there more often. Similarly, the eBay deal means that a lot of people are using Argos as a convenient drop-off and collection point, when they might otherwise have used the Post Office or a CollectPlus shop.

In some ways these initiatives remind me of a conversation I had with Paolo Rangoni of Carrefour, who told me the supermarket giant has a clear strategy of giving people good reasons to visit their nearest store – for dry cleaning, parcel lockers, watch repairs, hair cuts, and to collect groceries ordered online. People collecting their groceries at Carrefour have to pay in-store, unlike the more usual way things are done in the UK. One of the consequences of that is that people make last minute purchases – something you are far less likely to do while collecting your groceries from a Portacabin in Tesco’s car park.

In the Kevin Costner movie Field of Dreams, the protagonist is told “if you build it, they will come.” That’s a fairly shonky piece of advice, really; not one I’d build a business on, anyway.

But if you don’t build it, they’ll never come.

Argos has built a delivery and collection network that no other retailer can rival, not without significant partnership and investments, and not in the foreseeable future.

The test will come between now and Christmas as to whether Fast Track can draw people in, and then meet their expectations.

You can read a full interview with Argos’ Andy Brown here.

Elsewhere in eDelivery this week you’ll find case studies on an Italian tyre company and how it manages stock, and a Scottish fashion retailer speeding up order processing.

Argos and eBay aren’t the only ones entering into partnerships; Oasis has teamed up with Doddle to offer free returns, and will be shipping to Doddle stores, as pick-up points, next year.

We also have a guest-authored piece that reflects on the role of packaging in a post Consumer Rights Act world.

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Main image:  ‘Oregon Ducks baseball game’ by Jsayre64 – own work.
Licensed under CC BY-SA 3.0 via Commons. 

View original image here.