The long and at times winding tale that led Sainsbury’s to Argos’s door has concluded pretty much as we anticipated back in early February.
OK, so we didn’t foresee the counter offer from South African retail group Steinhoff. Nor – once they were in the race – did we predict they’d drop out, leaving the field clear for Sainsbury’s revised bid of £1.4bn to win the day.
I have no particular loyalty to Argos or Sainsbury’s; I own no shares in them, I’m not even a regular customer of either. But somewhere deep down in the cockles of my heart – or possibly in my liver, it’s hard to tell these days – I’m pleased that Sainsbury’s is acquiring Argos. Apart from anything else, I want to see how this one plays out over the next year, two years, five years…
Argos is a retail curiosity – from Green Shield stamps, to three tiers of in-store queuing, to a £3.95 same-day home delivery service, it doesn’t follow the herd. Its hub-and-spoke network wasn’t a cheap decision at all, but it put it at the forefront of fast home delivery, and made it an attractive acquisition target for a food retailer that needed to up its game.
Sainsbury’s needs to build on both its delivery capabilities and it non-food offer. So the Argos tie-up makes a lot of sense.
But, steady the buffs, the ‘Amazon with shops’ description which I think the BBC first mooted to refer to a combined Sainsbury’s and Argos (Sains-gos, anyone…?) is way off the mark. Not least of all because one of the most visible aftershocks from the merger is likely to be the closure of many Argos stores, a considerable number of which are believed to be almost out-of-lease on their premises anyway.
If Amazon wanted shops it would get some, or it would flex its relationships with Morrisons and others it’s talking to, after all it’s already making headway in the food sector, much to the reported chagrin of Ocado. But with a high profile divorce case, and related possible sell of shares from its co-founder and CEO, and an undulating share price, Amazon isn’t the only trouble knocking on Ocado’s door presently.
Returning briefly to the subject of shops, Asda is said to be closing more than 200 stores, closing down peripheral on-site services (photo processing, pizzas etc) and letting around 750 people go. It’s also closing staff canteens. All of this is part of something called Project Renewal, and comes hard on the heels of six consecutive quarters of falling sales, the most recent being the worst of all. Those 40m extra in-store visits created by its toYou delivery network probably can’t come soon enough.
Elsewhere on eDelivery, we return to the theme of cross-border ecommerce, which is predicted to grow to a €40bn market across Europe by 2018. Delivery and returns processes are felt even more keenly by shoppers buying from other countries, as they’re likely to feel the retailer is a long way away. But that’s not an excuse for being distant or remote in your dealings with customers, and if you have designs on grabbing a share of that €40bn you will need to cater to different customer expectations in different countries.
We’re now just five weeks away from eDelivery Expo (EDX16) which takes place on 27 & 28 April. Last year more than 5,000 people attended the two day event, which is co-located with InternetRetailing Expo, and I’m hoping to meet as many eDelivery readers there as possible next month. Here’s a recap of some of what took place last year at the first ever EDX, including a drone demo that nearly came a cropper thanks to an angry duck.
You can find details on the event, including how to register here. You can also find an overview of Day One here.
Speaking of drones, Liam Chennells of Shutl, has written an article about them just for eDelivery. I remain pretty sceptical about the future of drones, but Liam disagrees … they’re not some sci-fi fantasy, he says. But what do you think?
Something eDelivery readers did share their views on was the Budget. It may have led to all sorts of controversy and a high-profile resignation, but how do we think it impacts the business community and our sector in particular?
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