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Argos, the transformation of a unique model

Argos, the transformation of a unique model 02-11-2022

UK-based general retailer Argos traditionally sold through catalogs, telephone service and physical stores (1,200 in the UK and Ireland). Its store format is unique: a mini-store with a reception area where customers place their orders and have them delivered on the spot.

This model helped Argos take advantage of the e-commerce boom, adding click&collect to in-store shopping. By 2021, 70% of its sales were online.

In 2016, Argos was acquired by supermarket chain Sainsbury's and began opening corners inside supermarkets.

Transformation: fewer stores and more logistics

Despite three million new customers and increased sales through the online channel by 2020, the pandemic has shown Argos that a large number of stores are no longer necessary.

The company has therefore decided to focus on customer availability, cost reduction (£105 million by March 2024) and e-commerce, through:
  • Reduction in the number of stores to 100 by 2024, down from 401 stores today.
  • Increase of more than 100 corners within Sainsbury's supermarkets, adding to the 336 already opened
  • Opening of collection points: 35 openings by 2021
  • Opening of 32 Local Fulfillment Centers (LFCs), one has already opened

Expert opinion:

Argos is one of the few generalist retailers with stores that, with 89,000 items, compete convincingly with Amazon.
Its unique model was a good starting point toward a successful omnichannel strategy: show rooming (leveraging Sainsbury's traffic) plus an efficient e-commerce website, mini fulfillment centers to serve both physical shoppers and those who want home delivery and a dense network of pickup points.

Discover the Argos case in this article. It is also included in the report “Estrategias Canales de Distribución para Marcas y Retailers” prepared by Ebeltoft Group and KISS Retail, you can download it here: