UK-based Argos invests in big data to personalise customer retail experience

Plans to open more digital concept stores

Argos has seen a 45 percent increase in the number of registered customers in its database after launching a 'My account' function across its online channels.

The retailer is investing in growing the amount of data it has on its customers so that it can drive more sales by offering shoppers a more personalised experience informed by this data.

By encouraging customers to register with 'My account', Argos has increased its customer database to 11.6 million registered customers, up from eight million as of October 2013.

Home Retail Group, Argos' parent company, said in its full-year results this week: "The customer insight gathered as a result of the increased level of registrations has enabled a more tailored product offering based on customers' needs, and has also enabled Argos to run bespoke promotional offers based on both customers' previous activity and their profiles.

"During FY15, Argos will continue to expand its database of registered customers, collect more customer data and use this data to further improve customer satisfaction with its offerings."

Argos previously said in its half-year results to October 2013 that it would use the customer data to send marketing emails with bespoke product recommendations.

The launch of 'My account' was part of improvements Argos has made to its online and mobile commerce offerings, which has led to an increase in online sales.

According to its latest results, online sales represented 44 percent of total Argos sales in the past year, aided by growing sales via mobile and tablet devices. Sales through mobile devices grew by 89 percent in the year and now represent 18 percent of total Argos sales.

Digital concept stores expansion

Check & Reserve, a service that bridges online with bricks and mortar, has also grown as a payment option, with 32 percent of total Argos sales being reserved online for collection in-store. This is a more popular option than home delivery, as just 12 percent of online sales were delivered to the home, and is where the retailer sees its stores playing a crucial role.

"The Argos national store network, which 734 stores that are smaller and more efficient than traditional stores, is a potential strategic advantage in a digital future. Increasingly customers will seek local product collection, and will appreciate face-to-face customer service," Home Retail Group said.

It added that the trial enabling shoppers at selected eBay merchants to order products for collection at around 150 Argos stores is still in progress, with more than 100 merchants signed up to the initiative since the trial began in September.

Meanwhile, Argos plans to add another 25 digital concept stores over the next year to the initial six it trialled over the Christmas trading period, after receiving "encouraging" early feedback from the pilot.

These stores allow the retailer to test features including online prepayment, a dynamic voice-driven picking system that helps to speed up the retrieval of customer orders and tablet browsers instead of laminated catalogues. It plans to roll out the voice picking system and fast track collection to all stores during 2014/15.

More digital enhancement

Over the coming year, Argos plans to build on the digital improvements it has made so far. This ranges from redesigning its online checkout to accommodate flexible payment and credit options, to improving search functions and showing real-time stock availability by location.

"In addition, a dynamic route scheduling system will be implemented which will allow customers to select accurate narrow timeslots for home delivery," the retailer said.

"Argos will also introduce a new secure payment infrastructure which will enable customers to store their card details safely with Argos for future use."

The retailer also plans to expand the use of a dynamic price optimisation tool to automate pricing recommendations that it had started implementing last year.

"Further developments to this tool during FY15 will include its implementation across further product categories, as well as the introduction of an enhanced commercial dashboard which will bring real-time digital and customer information to Argos' trading teams, enabling better decision-making," Home Retail Group said.

Home Retail Group announced a 27 percent increase in pre-tax profit to £115.4 million in the year to 1 March 2014.

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