Home Retail Group, which owns Homebase and Argos, has revealed that the DIY business is hoping to take advantage of the digital investments that the catalogue retailer is making as part of a five-year transformation plan.
Argos started pursuing a new business strategy to become a “digital retail leader” in 2012. This has so far resulted in the rollout of 40 digital concept stores, which the company uses to trial technologies, such as NFC, and where it has replaced the traditional, laminated catalogues with Apple iPads. Behind the scenes, Argos is also overhauling legacy systems and making multi-channel investments, with the ultimate goal of being able to offer customers real-time stock availability of products regardless of where the item is in the supply chain.
Home Retail Group unveiled its plans for Homebase as the group reported a five percent fall in pre-tax profit to £13.5 million in its half-year results. This is despite sales for Homebase and Argos increasing, by 4.1 percent and 2.9 percent, respectively, to reach a total of £2.67 billion in the period.
Home Retail Group’s chief executive John Walden said in the results today: “Homebase will pursue a three-year plan through to the end of FY18 to improve the productivity of its store estate, strengthen its propositions and accelerate its digital capabilities by leveraging Argos’ investments. This will position Homebase as a smaller but stronger business, ready for investment and growth.”
The group said that Homebase has been making progress on the online side of the business, making up for a lack of interest from customers in its physical stores.
It upgraded its website in the first half of the year, and grew multi-channel sales by 12 percent. However, Homebase also is closing a quarter of its 323 stores in the next three years, with 30 branches to close in the current financial year.
Argos also went through a phase of closing stores just before it embarked on its digital transformation two years ago.
However, Home Retail Group’s update for Argos shows that the transformation plan is progressing well.
It said that online sales now account for 43 percent of total sales, down from 46 percent in January, with mobile commerce - which grew by 45 percent in the period - representing 22 percent of total sales.
The catalogue retailer said it has also begun rolling out a feature that enables customers to pay online and ‘fast track’ their collection of an order in-store, and completed the national implementation of the ‘hub and spoke’ branch network, which allows customers to collect more products (around 20,000) on the same day.