How Argos’ own brands are driving sales this Christmas
Argos revealed earlier this year that mobile sales have surpassed £1bn for the first time. The retailer is now eyeing a third of sales from its own-brands by 2018 and is working to boost perceptions of quality, desirability and gifting in time for the Christmas rush.
Argos has only been on an own-brand drive for the past year, with the creation of a dedicated team overseen by former Johnson and Johnson marketer Alyson Lockley. She was quick to set an ambitious target to focus on own labels and wants the her division to be responsible for a third of sales at the retailer – which last year amounted to £5.7bn - within the next three years.
With over 90,000 products within its catalogues, Lockely has focused on three categories in the run up to Christmas – technology, toys and homeware. It’s ‘power brands’ within each have been completely overhauled.
Within technology – which analysts predict makes up more than half of Argos sales – its Bush and Alba ranges have been given a new brand identities.
“Bush and Alba have such latent equity but actually we felt we could do a lot more with them. It was about how we refreshed their British heritage and brought it to life in a much more contemporary way,” Lockely told The Drum.
Bush’s brand identity now plays heavily on how technology brings families together while Alba’s refresh to introduce more minimalist designs has targeted tech conscious consumers.
Given how competitive the marketplace is, Argos’ main point of differentiation is price. It is wants to be seen as a retailer offering quality at entry level prices, particularly at Christmas, and an overhauled landing page for the brands has gone some way to attract online shoppers.
“We feel very strongly that you can have great technology products at accessible price points that leave you money at the end of the day which was always the intention,” Lockley added. “It’s a great opportunity to build perceptions and build perceptions.”
Lockely has predicted significant growth within the Home category and it wants customers to associate the Heart of House brand with quality and desirability. Following a hard marketing push earlier this year – which saw Argos take Heart of House to TV for the first time – Lockley said it’s performing strongly.
To maintain momentum, Argos has planned ‘Home Events’, such as in-store promotions, while the online strategy remains key as with over 70 per cent of sales for its homeware products are made via the website.
The retailer has invested in improving the customer journey across all touchpoints as well as experimenting with things such as 360-degree content in order to ensure that customers have the information needed to make an informed purchase.
However, much like technology, it’s becoming increasingly hard to stand out in the homeware marketplace with new online-only players regularly emerging alongside more established brands investing to take advantage in the sector’s increasing sales. Matalan, for example, recently extended its home and furniture range online, claiming at the time 12.5 million of its consumers are already “highly engaged” with that part of the business.
“It’s becoming very competitive. Creating desirable products is a key part,” she said. “It’s about having sheets that are the same thread count as competitors but priced at 20 per cent less.”
Lockely is also trying to position Heart of House as one of ‘real-world homemaking’.
“It’s not about trying to create a perfect room set. It’s not about everything having to match. As we get more launches into the market how we position the brand is going to be important,” she said.
Finally, Argos’ biggest focus for Christmas will be toys. With 142 new products already released, innovation is the main driver of its success.
“We have almost half of mums buying through smartphones,” said Lockely, and as a consequence investing marketing budgets on digital channels has become vital in achieving cut through.