Hemus draws Woolworths parallels with Argos concerns
Brand expert Jonathan Hemus talks to The Drum about his concerns for Argos and compares the brand to that of Woolworths ahead of that retailer disapearing from the High Streets of the UK.
The dip in sales has come as a surprise to the retailer which has expected to see a surge in sales of TVs as it did four years ago ahead of the last World Cup, but having also cut prices to gain custom, affecting profits, the brand may have to re-examine its strategy going forward.
Hemus says that the brand should be concerned by these results, but having rebranded only a few months ago, perhaps it does recognise that it needs to ‘modernise’ and make it more appealing to a contemporary audience.
“It clearly still has a long way to go to fully achieve that objective", says Hemus, if so.
“They are being squeezed by the supermarkets and they are also being squeezed by the more modern, contemporary online retailers and find themselves in a difficult place. Maybe their rebrand should have been more about revolution than evolution, which I think it was,” continues Hemus.
He adds that he believes that the brand had failed from a communications perspective, which is why the results have come as a surprise to Argos investors.
“The future, from a communication point of view has two key areas that it will need to focus on. They need to focus on rebuilding relationships and rebuilding trust with a range of stakeholders, both their customers but also their investors because these results will knock confidence in both of those areas,” Hemus explains before drawing comparisons with the situation faced by long established high street retailer Woolworth before it went out of business two years ago.
“Argos is certainly more contemporary than Woolworth was,” he says. “Both of them are or were very well established, trusted brands but both of them lack a clear sense of position and role within the current retail environment, mainly because they find themselves squeezed by the supermarkets on one hand and the online retailers on the other hand and Argos has not defined and communicated where it sits in within that environment.”
Hemus continues to say that the nature of the Argos operation as ‘a Jack of All Trades’ makes it particularly vulnerable, which was part of the problems faced by Woolworths.
You have to draw parallels with the Woolworths situation whereby a very well established highstreet retailer and brand allowed itself to become irrelevant to the British public and when tough economic times came along it suddenly found itself out of existence. I don’t think Argos is there yet, but it needs to learn lessons from the Woolworths situation and address its problems as a matter or urgency.”
Another competitor, John Lewis is highlighted by Hemus as a brand which has been able to turnaround its fortunes and is now trading strongly again with ‘a clear position’, as a situation the brand could look at.
“What John Lewis has held onto is a very clear sense of what the brand is about. They have re-evaluated the context in which they are operating but consumers understand very clearly what the John Lewis proposition is. I am not sure they understand that quite so clearly when it comes to Argos.”