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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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Argos introduces national same-day home delivery service 'for the digital age'

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Argos introduces national same-day home delivery service 'for the digital age'
Argos introduces national same-day home delivery service 'for the digital age'
Argos this week unveiled a Fast Track home delivery service that it believes will make it the first retailer to offer same-day delivery up to 10pm, seven days a week, 364 days a year, across the UK.

The launch of the in-house service comes ahead of the busiest season in most retailers' calendar, that leading up to Christmas. Last year retailers were swamped by what the IMRG has termed a 'delivery tsunami' over the Black Friday weekend. Argos is working on the premise that staffing up and operating its own fleet will enable it to sidestep some of those pressures.

The general merchandise retailer, an Elite retailer in InternetRetailing's IRUK500 research, will deliver a range of about 20,000 products through the new scheme. When customers place an order by 6pm for a product marked Fast Track, they can pay £3.95 to have it delivered by 10pm that night. Orders placed before midnight can be delivered as early as between 7am to 10am, or 10am to 1pm the next day. Customers can also choose deliveries in slots from 2pm to 6pm and 7pm to 10pm.

Customers can also choose to fast-track store collection for free. Fast Track Collection counters in-store are available for those who have pre-paid online to pick up within 60 seconds of being served, thanks to Argos' stock management systems that show the location and availability of products across the store estate.

Some 3,300 new drivers are staffing the same-day delivery service, based at local stores. Argos says it has hired people who like being out and about in the community to focus on offering customer service right up to the doorstep.

John Walden, chief executive of Argos parent company the Home Retail Group , says the move is an important next step for connected commerce. "Argos led the way with click and collect 15 years ago, and customers can continue to shop with us in the traditional ways if they choose to," he said. "But we believe Fast Track is the next big innovation and brings shopping into the digital age for customers, allowing them to get 20,000 products in their hands faster than ever before. No other retailer can offer the breadth of products immediately or at that speed."

He added: "We can do this because we are a different type of retailer. We know where every product is in our network and for customers who shop across digital channels – online and mobile - that means they can get what they want faster and with certainty. It’s the best of Argos coming together whether you choose to shop online or on the high street. The combination of both Fast Track collection and delivery services will be an enormous help to customers this Christmas and make seasonal shopping speedier and easier than ever before.”

Bryan Roberts, senior vice-president and knowledge officer for EMEA at Kantar Retail, said: “Delivery has emerged as one of the key battlegrounds for UK retailers, as customers increasingly look for multiple delivery slots that allow them to shop how and when they want on the same day.

“In terms of customers being able to order online as late as 6pm and receive products on their doorstep that evening, Argos is showing its rivals a clean pair of heels with this new speedy nationwide service. While having the right offer at the right price will be crucial as ever this Christmas, there will also be a sprint finish on the nation’s roads to deliver the goods the same or next day.”

Commenting on the news, Hannah Maundrell, editor-in-chief of money.co.uk, said: “Argos is laying down a gauntlet that will take ecommerce to the next level by eliminating one of the major barriers that stops consumers shopping online – the pain of delayed gratification.

“While Amazon has worked hard to offer consumers convenient delivery options they haven’t yet nailed same day across the UK – it seems Argos has pipped them to the post.

“It will be interesting to see how this works in practice and whether consumers feel it’s worth £3.95. If Argos can make this work I’d expect to see other major online retailers follow suit pretty quickly; hopefully they’ll get up and running in time for Cyber Monday.”

Darryl Adie, managing director of digital consultancy Ampersand , said: "Argos is well-placed to deliver its same-day delivery service as its model from the beginning has been multichannel at its core. Its stores effectively act as warehouses, placing products throughout the country and near customer homes. Because Argos has infrastructure and data integration already in place, it is easy for Argos to push forward with innovative fulfilment initiatives such as this. Retailers like Screwfix with a similar business model could soon follow suit.

"This is a smart move from Argos as consumers appreciate fast delivery for a good price. According to Ampersand’s Retail Delivery and Fulfilment Report, 42% of consumers would be prepared to pay up to £5 for same-day delivery. Argos’ stated £3.95 charge is well within that.

“On another note, Argos’s in-store collection still remains free. In the build-up to Christmas, it will interesting to see how other retailers -- including John Lewis with its new click and collect charges -- structure their delivery models and charges".

Our view: Argos has spent several years building the network of hub-and-spoke stores that mean, along with the single view of inventory, this service is possible at all, never mind across 20,000 products. It's set to reap the benefits of that investment this Christmas, since it's likely to be able to deliver altogether more effective fulfillment this year.

The danger will come if Argos' new fast track service wins so many more orders that it struggles to deliver them. After all, £3.95 is not a lot to pay for same-evening delivery. By contrast, in the "selected postcodes" where Amazon already offers same-evening delivery seven days a week, it charges £9.99, or £7.98 for members of Amazon Prime. But it's interesting to note that Argos has taken on its own staff, including 1,000 for the Christmas period alone, in order to ensure that it withstands those pressures rather than sharing the resources of a delivery company with other retailers. Nonetheless, we'll be watching with interest this Christmas to see how this new service performs under the pressures of what last year became a 'delivery tsunami'.
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