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Multichannel sales reached £1.9bn for Argos in the last financial year, 43% of the retailer's total sales. The latest addition to this strategy is a new Check & Reserve iPhone app.
I've been talking to David Tarbuck, who is head of multichannel development at Argos, about the new app, and the company's approach to multichannel retail.
Why did Argos decide to launch an iPhone app?
I look after the development and operation of the Argos website, and for the past three years I’ve been watching our analytics.
This information, as well as customer feedback, is valuable to find out what customers are doing. We found that has been a groundswell of Apple devices which have been used to access the website.
I know from people in the office that, thanks to the resizing and zooming required, it isn’t the best way to view the website, but people were still using them to reserve items, and we knew from customer feedback that more people wanted to use their mobiles to shop on the go.
The 'year of mobile' has been talked about for the past three or four years, but now thanks to the quality of handsets it has gotten to the point where the user experience is acceptable.
A combination of this improved mobile user experience; customer feedback and visitor numbers from mobile devices led us to design the Check & Reserve app.
Why not make the app transactional? Is this something you plan to do in future?
There are a few reasons for this:
Firstly, customer’s skepticism about the security of mobile purchasing. We didn’t want to impact the adoption of the app by having to explain these issues to customers.
Secondly, customer feedback has indicated that a reservation service is what customers are looking for. Reservations have long been part of our business model, and we already have a phone and SMS reservation service, and adding the app is a logical development of this.
Also, we don’t have any mobile service for payments at the moment, though we will undoubtedly go down this route at some point.
Will you be looking to broaden the appeal of the Argos mobile offering by designing a mobile web version of this service?
The iPhone app is our first customer mobile offer, but we will be looking at other devices in future, though we have no dates set for further releases.
We will be looking to roll out this Check & Reserve service for other customers with different handsets.
Looking at our visitor stats, the use of iPhones to access the Argos website is clear, but no other single handset stands out. It’s about the Apple interface – people get it – while also embracing the iTunes app store and the ability to customise your mobile device to your specific needs.
What were the biggest challenges in implementing Check & Reserve at first?
When we first launched the transactional Argos website in 2000, we implemented a reservation service at the time. The internet now represents 32% of Argos’ sales, with 22% coming through our Check & Reserve channel.
The way Argos is built is unique in the UK market, and this has made it easier for us to implement Check & Reserve. Since customers are in the front of the store, and the stock is held in the back, we have a clear picture of stock levels in our stores.
This means we can be confident that, if we ask our systems about stock levels at any store, this information will be accurate.
Check & Reserve gained immediate adoption with customers, and this has accelerated over the last two or three years, with this channel growing by 36% for a second year in a row. People have caught onto it, and appreciate the convenience of being able to check before they leave the house and save themselves a wasted journey.
While our model has been improved over the last ten years, other retailers have a more difficult and costly process for implementing this kind of service.
Multichannel sales grew to £1.9bn (43%) of Argos’ sales, so a big part of Argos’ success as a multichannel retailer is a strong technical infrastructure that links all our channels together.
Whether customers are dealing with a contact centre, through SMS, the website or on an iPhone, the experience is consistent.
With services like Check & Reserve, in-store returns etc, do multichannel retailers now have an advantage over online pure-plays such as Amazon?
Yes, the convenience we can offer customers, and the instant gratification is an advantage. We offer people the chance to access Argos through a number of channels, find a product, reserve it, and this idea of not having to wait for delivery can be appealing.
The convenience of taking returns to a store and talking to someone about it, this old fashioned shopping experience, can be very appealing to some customers.
How important are catalogues in the multichannel mix?
Argos is known for catalogues, and we have a very large uptake of the catalogues when they are released.
It has become an event in the UK, and we release two every year. We currently print around 18 million, which means large numbers of people have our catalogue in their lounges, on their coffee tables, and this gives us a presence in people’s homes.
Catalogues are often the starting point for customers shopping with Argos, they will flick through the catalogue, or browse the website at the same time.
We have over 11,000 products online that aren’t in the catalogue, so people will come online to check this and for latest offers, so catalogues are used in conjunction with other channels.
With catalogues or any other channel, it’s all about talking to customers and working with them in whichever way they want to interact with us.
How is your multichannel team structured?
We have a multichannel team, and I head up the development team and the operation of the website, overseeing online strategy.
We have e-commerce, marketing and commercial teams who respond to the trading side of the business, and make sure the various promotional campaigns are joined up, and there is consistency across channels.
We’ve had a self-contained internet-focused team in place for the last ten years, and this dedicated team has been very closely related to marketing and other areas of the business.