This is How Argos Turned Around Their Strategy to Create Greater Customer-Centricity
This case study delves into the obstacles, key strategies and changes at the heart of Argos’ move from traditional rose-coloured feedback mechanisms to true customer-centricity.
Argos started their journey to having a better customer experience about three years ago after the arrival of a new trading director, Steve Carson, who had gone into the post and then decided that he wanted to go out to branches and actually look at what was going on.
Interestingly enough, Argos had a set of internal insights that gave them a pretty rosy picture of where things were, but when Carson went out to the branches he discovered that what he saw, what he heard, the feedback he got from customers and some of the complaints that he was receiving, did not match up with the positive results collected from their traditional feedback mechanisms.
Around the same time, Argos were seeing a rapid decline in their profit; they had gone from around £450 million worth of profit to around £100 million of profit in a four-year period.
Four years on, Argos’ trading figures are improving. The business is now more focused and centred on the customer. Their employees are engaged with the process and their recent colleague engagement surveys are showing a much more engaged set of people working in the branches.
There are a number of strategies put in place by Argos that can be highlighted. One of the strategies they deployed was a focus on making it easier for the customer to actually shop with them. To achieve this, there was a bigger focus on features like click-and-collect and on ensuring that items were in stock. That focus also went all the way down to simple things like making sure that if anything was listed in the catalogue that there was clarity about what that was. Furthermore, for a customer who went to pick up an item in branch, Argos made sure that could be done easily with no confusion.
The drivers behind that change revolved around Argos having items listed under the same product number, so often a customer would ask for a blue item and get a red one instead. Those are basics that high street stores take for granted and are actually incredibly important to get right 100 per cent of the time. Those were the issues and Argos focused on making sure the shopping experience was quicker and easier for customers.
Moving on to a larger, strategic change, they moved to having a very clear focus on engaging with the customer. In the-old world Argos – a big open space with some catalogues and a collection counter and some tills – if a customer approached an employee at a till or behind a collection desk they usually got a warm, engaging interaction with the person who would try and be as helpful as they possibly could.
The key thing Argos discovered was that the customer had to approach the colleague and it should have been the other way round.
To combat this, Argos invested and put more effort into training colleagues into proactively engaging with customers. Employees were brought out from behind the counters and the tills so that they were in the middle of the shop floor and could be more engaged with the customer. There was a real education on how to avoid scripted interaction and rather to be careful, observant and look for customers who clearly needed some help or assistance.
Argos was successfully able to identify business cases around the change and decide on the areas they should be focusing on in terms of strategic initiatives and tactical initiatives. Through making those changes, Argos has witnessed a huge difference to their trading figures.
How Did the Shift Happen?
Before Argos focused on customer experience, there was a tremendous amount of focus on traditional customer feedback mechanisms. Argos had a mystery shopper programme in place, and they were using technology-based feedback devices such as buttons within the branches that a customer could push to tell you how they felt about the experience.
The process was extremely automated and very reliant on the customer being proactive about feedback. Like a lot of retailers before and after them, Argos was not the first to discover that when you have a mystery shopper programme in many ways what your company is actually doing is measuring how good a particular branch is at dealing with the mystery shopper, and not necessarily how good they are at dealing with the customer. Moreover, really good branches get to know prior to when the mystery shop is occurring and the performance level for that shop will improve temporarily to deal with that particular mystery shopper, but that is just an experience one person has and cannot be what retailers base the overall customer experience on.
Argos knew it was important for them to make the shift to having a customer-centric business strategy. Having thought about and understood what the discrepancies were between what their customers actually experienced and the information that they had been receiving from their mystery shopper programme, they set about looking at how to bridge the gap between those two. Argos really had to figure out what the perception was from the customer side and how it differed from the views being shared in head office.
The biggest obstacle Argos faced was being brave enough to embark on change. If you have a set of figures that are telling you that from a customer point of view everything is fine and that also happens to be one of the key metrics in your business, it is quite hard to stand up and say that something is wrong and question whether the feedback is actually telling you what we really need to know about your customers.
There was a huge amount of bravery and honesty from Argos in order to get to where they are now rather than where they perceived they were.
Another big obstacle is the amount of time and effort it takes to turn a huge organisation like Argos from where it was three years ago, to where it is now. There is a common view that customer-centricity can be achieved within a 12-18 month period however, three years later Argos is aware that they are still on that journey. It takes patience for a high-street retailer to achieve their customer experienced-based goals.
There is also cost to consider, it is expensive to change the way an operation currently works to be more focused around the customer. When a company gets it right though (and in the case of Argos) your figures and your trading performance will rise, and that is the difference between seeing an upswing rather than a downswing in sales.
What Can You Learn from Argos’ CX Strategy?
The proposition that Argos provides is slightly different compared to the usual, it is competitive on price but they also focus on convenience, location, and the fact that a customer can browse at home and pick-up an item in store. Therefore, price is important but it is not the most important thing.
What your company needs to do is make sure the process customers go through is easy, slick and not too difficult – you should make it as simple as possible for a customer to buy a product. Moreover, the more engaged your shop-floor colleagues are the better. Enthusiasm is infectious and that approach naturally leaks out to the customer. Great interaction is an essential part of achieving a great customer experience.
Finally, when the sale is complete companies need to ensure that their after-sales process improves. One way to do this is to give colleagues on the shop floor more authority to make decisions about the right thing for the customer.
To achieve a customer-centric turn-around like Argos, focus on the basics, focus on what customers need and want, and be honest about your current performance against those needs and then devise a strategy. Be prepared to invest in that strategy to enable you to achieve goals in line with the needs of your customer.
This case study was first produced for the Customer Experience Transformation: Retail conference in 2015.