Thursday, 20 October 2011

Argos retail blues

UK retail sales rose by 0.6% over the year to september 2011, and was 0.2% higher than august figures, and even higher than analysts (and how many of them saw any of the financial hiccups the globe experienced over the past few years) forecast.  This places septembers figures firmly in the area of a sliver of a shaving of a slice of hope, that goes by the general name: margin of error.  Naturally once a few months have sailed by, the figure will probably be re-statistised - downwards!

Yesterday argos came out with figures that if today's retail sales result had copied, would have pushed consumers into running for the bunkers, emptying shops and hunkering down for years to come.  I thought it more probable that due to the economic squeeze, consumers would be seeking value, service and reliability.

In light of the results and considering the type and style of offering that argos supplies then there really is no surprise in their 70% drop in profits.  If they improved their surly staff and stopped selling such rubbish stock that had a 50/50 chance of breakding down, they'd probably be far more successful without being the holder of the reputation they have.

John lewis has a reputation for allowing customers to return goods that don't work.  Argos has the same reputation.  The prices between the two outlets are remarkably narrow, yet the experience couldn't be more different.  Merchandisers at jl seem more 'lucky' with the batches they buy, and  jl sales staff appear more concerned about the customer and that ever important customer experience.  On the other hand, customers of argos (from their sales figures at least), appear to have finally twigged that as good as their offering is for taking back faulty goods whether for replacement or refund without a quibble, it does reach a certain level where if 1 in 2 purchases have to be returned to a store, customers will begin to wonder if the hassle it causes, is really worth it!

Now before lawyers of argos descend, i'm talking from my own experience and word of mouth (first hand) reports from other people.  In my case, the last major purchase was a laptop for £370, which worked for four months before upping its last, forcing me to trudge back to the store.  Thirfty five days later, after calling and no-one knowing where it was or, even, what was wrong with it, i received a call saying it was ready at the store for my collection.  Twenty-four hours after collection, the dreaded click of death afflicted the hard drive and that was that.  It went back to the store, and i accepted a credit note.

The only way argos won't go the way of woolies is if they up their game.  With online stores offering better for cheaper with just the same amount of hassle, an increasing number of customers will choose other avenues to throw their money at and vote with their shrinking economic feet.

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