Business Technology

Saturday 30 August 2014

Argos 'book of wonder' survives digital era

Adrian Weckler

Published 01/05/2014 | 02:30

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Andy McClelland, the head of Argos in Ireland

They say digital is the future. But for Argos, print is still very much in vogue.

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"Seventy-five per cent of all Irish homes have the current Argos catalogue," says Andy McClelland, head of Argos Ireland. "We print 1.8 million catalogues a year in Ireland. People still love the books."

Despite the charms of the 'big book of wonder', Argos is intent on switching more of its business over to online and digital revenue. The company is currently undergoing a gradual transition in its stores and on its online business. Although the leading edge of it is yet to hit Irish stores, the changes are starting to work in Britain, where most of its stores are located.

Yesterday, the company's parent firm announced a 27pc rise in its overall profits, thanks mainly to a big jump in digital sales from Argos. The Irish division, which has 40 stores and employs 1,500 people, is moving at a slower pace.

"There's a cost to printing so many books and we're trying now to migrate much more to digital," said McClelland.

"We don't have a full e-shopping website yet or a dedicated app, but that will come. In the meantime, half of our customers use our 'check and reserve' system. That rate is higher here than in the UK."

In the meantime, Argos is overhauling many of its back-end systems to speed things up for customers in shops.

"Customers just want to get in and out," said McClelland. "One thing we're currently trialling is a fast-track lane that guarantees your product within 60 seconds. "

The company has also revamped its warehousing system with voice technology to make product retrieval quicker.

"We were wasting a lot of time picking up a docket and walking to the far end of the stockroom, so we've automated the whole system.," said McClelland. "Storeroom colleagues now have a headset and everything is voice controlled. Sensors in the stockroom detect who is closest to a product that has just been ordered. They are then verbally given a location reference. They verbally confirm pick-up and drop-off, which the system incorporates into the system."

One reason for the changes, he says, is to "make Argos more universally attractive".

"We want to open it up to people who normally wouldn't think of shopping here," he said. "Traditionally, Argos might have been viewed as a value store, not somewhere that more affluent people might shop. There has perhaps been a snobbery involved. Although it's not as bad in Ireland as it might be in the UK."

If the company is looking to cutting-edge delivery techniques, might it try to ape some of the initiatives from Amazon? Pre-order deliveries? Drones?

"There's no doubt that Amazon are right there on the cutting edge," said McClelland. "Some of the things they've announced, although not delivered yet, are exciting. We do keep a close eye on what they're doing and it's fair to say that one of the things we may not have done as well as we could is using the knowledge we already have about our customers."

Ireland, he says, is regarded as a "core part" of Argos, with no threat to jobs here, despite a "challenging" retail environment. "We're totally committed to Ireland," he said. "We don't foresee any store closures or loss of jobs here. We have 1,500 colleagues in Argos Ireland, with about 120 management staff as part of that. We haven't found recruitment to be difficult at all."

He says it's unlikely the business will ever be 100pc digital. "Physical stores are here to stay. Deliveries don't suit everyone. We think we see the future of stores and it's a combination of physical and digital."

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