Argos on own-brand tablets, resilient PC sales and rival retailers

We talk to technology trading manager Simon Barry
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With more tablets on the market than ever before, Argos has decided to enter the fray with its own-brand MyTablet device. Dominic Sacco asks Argos’ technology trading manager Simon Barry about rivalling other retailers, resilient PC sales and the firm’s partnership with eBay…

How big is the tech sector for Argos?

Technology is a very important category to Argos. We are one of the leading electrical retailers in the UK and we offer a wide choice to customers across a range of tech items.

This year has been really busy for us with the launch of our first contract mobile phone proposition, our first own brand tablet device from Bush and exciting product development across our tech accessories offer.

How have computing products been performing for Argos, considering that the traditional desktop PC market is in decline?

We’re still seeing a lot of interest from customers in the PC business and while Windows 8 did not give the boost to the market that many were hoping for, customers are realising that they probably need both a tablet and a PC.

Windows tablets have yet to break through as consumers are yet to realise that they are a tablet with the power of a PC. In 2014 I hope to see some new Windows tablets and exciting product development on PCs coming through, which will help the market further.

What are your top-selling technology products?

We sell a whole host of tech products which do well with customers – from large TVs and iMacs to Dysons and Beats headphones. The performance of rugged outdoor video devices has surprised me – despite costing more than standard devices, they are proving really popular. I am also impressed with how the headphones marketplace has reinvented itself, with some great products from a number of premium brands such as Skullcandy and Beats. I expect there to be strong demand for both of these categories in 2014.

You’ve announced a Click and Collect trial with eBay. How do you expect the service to fare?

The trial initiative with eBay offers Argos greater optimisation of 150 of our stores, an opportunity to drive footfall, and access to a new customer base to potentially review other products and services from Argos. We are shortly starting a programme to roll the service out to stores and we hope to have some of these live this side of Christmas.

Speaking of Christmas, how competitive do you think the tech market will be at UK retail this festive season compared to prior years?

The tech marketplace is always really busy at Christmas and I expect this year to be no different. With the battle of the new video game consoles and a whole host of new tablet options for customers, it could be even more intense this year than in the past.

The Argos business and our store teams have been gearing up for the peak trading period for some time already. We’ve launched some great new innovations this year for Christmas such as our first digital gift guide, which offers customers the chance to explore online gift ideas across tech and other popular categories. Our paper gift guide has also incorporated augmented reality through Blippar – customers scan images with a Blippar icon next to them to launch content such as games, videos and competitions. As a business we’re experimenting with new innovations and ideas to further our reach online.

We aim to be as competitive as possible and want to bring some fantastic products at exceptional prices to the market for this Christmas. Argos customers expect great ranges, choice and value and, from the plans I have seen, they will not be disappointed.

You previously told us Argos’ appeal is universal. Has your customer base for tech products grown as the market for categories like tablets increases in popularity?

We do appeal to all shoppers, but it has been great to see higher participation in categories such as large screen TVs and premium brand tech products. As we continue to improve the quality of our web information, customers are browsing online with Argos and then using the Check and Reserve facility to reserve their preferred product for immediate collection from their local store. The ‘immediacy’ that Argos offers is very compelling for customers looking for the latest branded tech product that they want right now.

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How do you feel about Clive Coombes’ plans to launch a new chain, Lewison’s, following his U-turn on the Comet name? 

The market is very competitive already but I have no concerns about others entering; customers will determine who is successful and who is not. Our market research tells us that customers want to be able trust their retailer. If they are spending a lot of money they need the confidence that the retailer will support them if there are problems, so trust may become a greater differentiator as the market grows.

Amazon and PC World recently began selling digital software downloads. In light of Argos’ growing digital sales, is this something you’d consider introducing?

Nearly half of all Argos sales now start online; 16 per cent of our business comes from mobile channels and Check and Reserve, where customers can reserve goods online for immediate collection from their local store, represents a third of our sales. The appetite for digital business services is clear among our customers and we are always open to exploring new avenues and opportunities for our customers. I would never say never, but there are no plans currently.

You allow customers to trade in certain goods like vacuum cleaners. What about computers or tech?

The trade-ins we have run are mostly brand specific. A wider trade-in solution is interesting, but there is a lot of behind the scenes infrastructure to make it work. With such a large store network as Argos’ – with 735 stores across the UK and Ireland – it is no small undertaking. If customers indicate they would like us to offer this then we would listen to their feedback and look at the possibilities. However, we currently have no plans in place.

What does the future hold for Argos in the tech space?

The future looks very exciting. Our close relationships with brands will provide us with a strong platform to develop some great products and offers. I have a busy time ahead with a growing contract mobile business as well as very large PC and tablet categories. It’s a great area of the market to be in, and I will be at CES in January to see what’s coming next.

TABLET WARS: ARGOS STRIKES BACK

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Tablets were a top-seller during Christmas 2012, so it makes sense for retailers to be launching their own exclusive tablets this year – first Tesco announced its Hudl (which has now sold 300,000 units), then Argos revealed its MyTablet (pictured, right), while Dixons has secured exclusive rights to the Advent Vega Tegra Note 7 this Christmas.

With the new Apple iPad Air, Nokia launching its first Numia tablet, the Galaxy Tab 3, Microsoft Surface and other tablets available, how does Argos think it will shape up this year?

“The tablet market is interesting,” Simon Barry, Argos’ Technology Trading Manager, tells PCR. 

“Our own brand tablets from CnM and Bush have given us great insight for future concepts and brand ideas. 

“There will certainly be more products coming to market within the industry in the lead up to Christmas, so it will be interesting to see how some of the new own-brand products perform in the marketplace, and whether consumers have the confidence to buy from retailers without electrical expertise. 

“We are keen to avoid a ‘race to the bottom’ and we have been clear not to range products at a really low price as we do not believe the quality is there. As with any product, including own label, you need to understand the target market well and build the proposition from there.

“We also believe that personalisation is going to become more important as tablet penetration increases; customers who have a tablet will want to differentiate it from their friends’ and make their own tablet unique. Our enhanced ‘tech-cessories’ offer allows customers to do exactly that, with a wide choice of cases and covers, keypads, headphones, screen protectors, stylos and more available.”

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