Argos sees successful transition to click-and-collect
Argos has reported healthy sales growth as it successfully moves to click-and-collect online ordering. The retailer reported 2.7% like-for-like growth, during its peak autumn period.
The firm's "check and reserve" ordering service grew its share of sales from 28% to 31% over the last four months. Orders placed online via mobiles and tablets more than doubled, and 42% of Argos' business is now done online.
"Argos has tapped into a rich seam of growth," said Neil Saunders of retail analysts Conlumino, who explained that its old catalogue ordering business and related stock management system meant it was perfectly placed to offer a click-and-collect service, in which customers order online and then collect from stores. Like Argos, fashion chain Next enjoyed a natural starting point in the form of its old directory business on which to build an online business.
"Next has been very pioneering with the speed and flexibility of its delivery," said Mr Saunders, pointing to the fact that it will take orders up until 9pm for next day collection - something that rivals such as Marks and Spencer have struggled to match.
"The Achilles' heel for online shopping has been that people are not going to be in when the delivery comes," he explains. “Customers love the fact that they are in control and can decide where and when to collect”.
Other companies to have launched click-and-collect services include clothes retailer Next and the John Lewis Partnership.John Lewis has done a brilliant job," said Mr Saunders. "It has a very good website and range of products, and has integrated its stores - including branches of Waitrose - into its delivery network."Two-thirds of the partnership's 300 Waitrose branches offer the service, meaning that many potential John Lewis customers who do not have a branch of the department store in their town can instead pick up their purchases on a food shopping trip.
Starting from scratch two years ago, despite some teething problems, click-and-collect sales doubled in the last year, and now represents one-third of John Lewis' online sales and over 8% of total sales.
The past few weeks have been described as one of the most difficult times for retailers following the collapse of Jessops and Comet, while HMV and Blockbuster face an uncertain future after they went into administration, having both notably failed to cope with competition from online competitors.
In this context, click-and-collect has been hailed as a rare positive development for the High Street. Some analysts have suggested that, in future, many retailers should turn their shops into showrooms and distribution points for their online operations.
Technology, however, is not the only way forward. Primark - who has just reported a 25% jump in sales - does very little of its trade online, and has instead focused on price competitiveness and keeping up with fashion trends.
Besides its online strategy, Argos' sales were also boosted by the strong demand for gadgets, particularly tablets, over Christmas. The retailer can also now expect to benefit from the demise of competitor Comet just before Christmas.
It is forecast that the online grocery market will double in the next five years.