Argos looks to have finally turned the corner

November 2013

As some readers will know, I spent nearly twenty years of my working life with Argos’ Marketing division, and left just over twelve years ago to set up on my own. In many ways my time with this somewhat quirky retailer now seems like a distant memory, but in other ways it doesn’t and certainly I retain something of an emotional connection. And that emotional connection has ensured that I’ve kept more than an interested eye on their financial performance, business strategy and level of innovation since my departure.

So having sadly witnessed a steady decline in Argos’ fortunes as its offer became progressively less relevant in a new digital world, November brought the good news story of a new ‘digital store format’ which looks right on the money. (If you missed it in the trade news then you’ll find a video of their Old Street, London, concept store on YouTube.) But actually I was already sensing that Argos was again starting to get its act together, because the success of their ‘click & collect’ service was getting publicity and for all the right reasons: No other retailer has so many stores and such a good website where such a strong offer could become reality, and for the online-only operators – Amazon being the obvious leader – then there are of course no stores at all, plus no obvious high street partner to fill the void.

However, it didn’t need the BBC news of a rising share price buoyed by the click & collect service which started me again thinking positively for the future about my old employer, but the briefest of stories the MD of one of my clients told me: The disc drive on his laptop packed up and he urgently needed the problem sorting, so he went online to find an external drive and Argos had both the product and fastest possible delivery. His search online and subsequent order for Argos was at 3.00 pm, then the very next morning he was in his local Argos store picking the item up – and not because they had it in stock but because it came in on the morning delivery as a result of his order. What’s more, he’d received two emails in-between updating him on the order status with the second confirming that he could collect the product the very next morning. Not sure who else on the high street could compete with that.

Of course this all begs the question as to why Argos has been so slow to convert their historic brand strength of a convenience proposition, into a modern day digital convenience proposition. Well I know the answer to that and here it is…

Also historically, Argos’ Achilles heel has been its all-powerful Operation division – the people that run the stores – and this to a level I doubt would have been rivalled in any other retailer in the UK in terms of influence and authority outside of its true remit (to run stores). In my 20 years with Argos, virtually all the senior positions within Operations (so from director down to area manager) were largely held by ego-driven, male, luddites with, typically, a big political agenda. And, as it was clear to me and many others in the organisation, new recruits were taken on if they fitted such a criteria. Operations didn’t just run the stores, they ran the Argos business. Other divisions – including marketing – were referred to as ‘service departments’ and if you didn’t toe the Operations line, then you were going to fall foul of their nasty political agenda. And that’s what happened to me as a result of having a final job of custodian of the Argos brand, and continually being at war with an Operations division who were
determined to fuck that same brand up. (My
October 2008 blog
expands on the extent of this and gives some classic examples.)

But I’m told by a number of old colleagues who remain at Argos head office that the culture has changed and Operations now pretty much behave themselves and, as they always should have done, do what they’re told and deliver on a brand proposition. And that’s the real point here because the clue is in the name ‘operations’, and with that in mind the only job these people ever had to do was deliver the brand proposition – in Argos’ case summarised as ‘convenience’ – in the stores, and specifically make the experience simple, quick and easy.

What changed the culture? Well I’d love to think that it was leadership from the top, but I’m reliably told that isn’t the case. What seems to have happened is a) that stores are now just one of the channels and therefore not the sole place where folk part with money for their goods, with this meaning that other channel heads – in particular online – now call a lot of the shots, b) that a new generation of management entering Operations have grown up in a digital age and therefore don’t fear technology in the way the old guard did (and they really did), and c) even the die-hard anarchists who went against every rule, policy and innovation that head office put out (in previous days ‘head office’ by name only) must finally have realised that they’d be better off working elsewhere. And on that last point, a quick check on LinkedIn reveals that to be exactly the case! (Most are actually self-employed or, and thankfully for the business world, now retired.)

And if you think that I might be over-egging all of this and have lost a sense of perspective after all these years, then let me provide you with a further piece of key information: Just a few years before I left – so probably just 15 years ago – the three most senior members of management in Operations took a stand that they wouldn’t have a PC or laptop on their desk. Why? Apparently they didn’t need one as they “don’t add value to the business”. As one especially astute member of IT said when he opened up an inter-divisional project meeting which Operations had failed to send anyone to: “Let’s press on without the common enemy.”

Argos has a great future and can now look forward to better years ahead following the clearance of the luddites in its ranks.