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Argos to start same day delivery

Argos is to start a same-day delivery service in its latest attempt to fight back against Amazon.

The high street chain will initiate a trial later this year that will allow shoppers to order a product online and have it delivered to their home or local store on the same day.

Same-day delivery is a growing battleground for retailers as they look to build up their online services.

A small number of companies – such as Ocado in food – offer a same-day service in selected areas of the UK, but Argos’s plan will potentially represent a significant step forward for shoppers.

The same-day service is part of a five-year plan by Home Retail Group, the owner of Argos, to rebuild the catalogue retailer.

John Walden, the American chief executive of Home Retail, is ditching Argos’s in-store laminate catalogue, has installed eBay collection points in stores and is opening Argos concessions within Homebase shops.

The retailer is also launching new brands, including a homewards brand called Heart of House that will be the focus of a major £7m marketing push in the UK.

The same-day delivery service will take advantage of Argos’s new hub-and-spoke structure. This groups the retailer’s shops into regions, with one major regional shop supplying products to smaller Argos shops.

This model, which replaces the system of relying on one centralised warehouse, means the retailer is confident about its ability to move products swiftly. The price of the service for customers has yet to be established, as is the cut-off time for orders.

The trial will take place later this year in one of the UK regions where Argos already has its hub-and-spoke model up and running, such as the North East or Lancashire.

Argos will also trial a next-day delivery service for large items that require two people to deliver, such as furniture. The company is a year into its turnaround plan, and the early results suggest it has been working.

The company, which is Britain’s third most popular shopping website by visitor numbers, reported a 4.9pc increase in like-for-like sales in the 13 weeks to May 31.
It should benefit from the heatwave with shoppers snapping up barbecues and other seasonal items, while demand for game consoles following the launch of the PlayStation 4 and the Xbox One has also been driving sales.

Source: Graham Ruddick - The Telegraph

20 July 2014

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