Argos, and why innovation isn't just for start-ups
Stop blaming Amazon, and start making changes.
Every year, one or more retail giants disappear from our high streets. And on each occasion, the same soundbites are heard all around.
‘Amazon is killing the high street’ is the most obvious; an easy phrase people pluck from the air to sound knowledgeable about the future of retail. But equally common is the notion that some businesses become ‘too big to innovate’.
These soundbites are as wrong as they are lazy. And to prove why, I want to briefly look at the example of Argos – a quintessential British retailer that could have so easily gone the same way as BHS, but is instead thriving.
From walk-in warehouse to omnichannel pioneer
It’s hard to think of anything less modern in retail than the traditional Argos set-up: huge physical catalogues, manually written product codes, lengthy waits while your number appears. But from 2012 onwards, Argos did what too many retailers don’t: they decided that to survive they needed to take risks.
The results of those risks can be seen today. Argos now has more than 50 ‘All Digital’ stores, where catalogues have been replaced with tablets that can take payments and link up with fast track collection points. Meanwhile, they were one of the first major UK retailers to rapidly expand their click-and-collect offering – and one of the first to invest heavily in ecommerce apps. 5.5 million downloads later, that investment has paid off.
But they’ve gone further, too. Pass through Charing Cross Underground Station, and you’ll be surprised to see Argos there too. In a hugely innovative move, their ‘collection point only’ store is just 5% of the size of their standard space, and only holds items ordered for pick up within the last 24 hours. This allows them to get a slice of the best footfall in London – some 40,000 people pass by every day.
They’ve also revolutionised their stock check function, giving customers complete visibility of available stock in every store. And by teaming up with companies like Shutl to offer 90-minute deliveries or Sainsbury’s to offer even more pick-up options, they’re giving customers unprecedented convenience.
What can your business do that Amazon can’t
Argos is a business transformed. It’s now the second biggest online retailer in the UK after Amazon, but significantly, the physical store is still involved in around 90% of all transactions – primarily as a pick-up point.
Delivery issues still deter many from buying online, and 96% of the British population live within 10 miles of an Argos store.
So Argos played to its strengths. Pick-up was revolutionised through digital investments, and for those still seeking delivery, new options were given. In stores, tablets sit next to physical catalogues. Everything is faster, simpler, and more convenient. Every kind of customer is catered for. It has found new answers to age-old customer problems.
Who honestly would have thought that Argos would lead the way in digital retail?
Lessons for big businesses and small businesses
The lessons in all this are relevant for anyone in business.
Start-ups, by definition, are innovators: a business doesn’t get very far without new ideas. And start-ups and small businesses on every high street need to take heed of Argos’ success in attracting people into their stores. They’re using online to complement offline, rather than simply accepting the lie that bricks and mortar is dead. Amazon simply can’t cater for the whims of every customer – and if you’re a high street retailer, it’s your job to work out what you can do for customers that Amazon can’t.
And the lesson for big retailers is simple: you are not too big to innovate, nor are you too big to disappear. Innovation is the difference between Argos and BHS. So stop blaming Amazon, and start making changes.