RSOMM RM Sem IV

Case Study on Argos:

Organized retailing, though booming, is still nascent and evolving in India. Beset with skyrocketing real
estate prices and extreme shortage of skilled manpower and thin margins, it could look at catalogue
showroom retailing as a retailing format that cannot only be setup fast at low cost but could also be
quickly scaled up across the country.

K Raheja Corp are the pioneers in organized retail in India by taking a first giant step to successfully
establish a retail store know as Shopper’s Stop. In 2006, it then ventured out in a hypermarket format
with HyperCity and Argos.

HyperCity Argos is the brand licensed to Gateway Multi channel Retail India Ltd, a joint venture,
following franchise agreements with HyperCity and with Home Retail Group (India) Private Ltd, a
subsidiary of Home Retail Group in the UK which owns the Argos brand. Argos, for the first time will
offer a unique multi-channel shopping experience to consumers in Mumbai (Thane, Mulund, Airoli).

This integrated multi-channel capability encompassing stores, home shopping and the Internet will give
consumers a new and convenient way to shop. Customers can choose from over 4,000 products from
the comfort of their home either through a Hyper-City Argos catalogue or by going online at the
website. Customers have the opportunity to choose from a wide range of products, make informed
decisions through product and price comparisons and above all save time.

Argos is one of the leading players of catalogue retailing in the UK. It is a unique retailer recognized for
choice, value and convenience. It sells general merchandise and products for the home throughout the
UK and Republic of Ireland, online and over the telephone. In the last financial year, Argos sales grew
eight per cent to £4.2 billion and it employed some 34,000 people across the business.

Argos Product Mix:

The products include personal care, kitchen and laundry, furniture, sound vision and electronics, garden
DIY and leisure appliances, toys and games, jewelry watches and accessories, etc. It is well said, that a
retailer should not play his game with just one format. It is not advisable to put all your eggs in one
basket.

Kinds of Outlet:
Catalogue stores (size 5,000-10,000 sq. ft.) and call & collect stores (size 300-500 sq. ft.). This has been
created specifically for customers in India as they like to view the products before a major purchase. The
catalogue store will offer customers the facility to browse through and view the products before they
buy.

High involvement and high investment products across categories would be available on display. The
centrally located neighborhood call & collect stores will have the option to browse through the
catalogue and buy. These stores hold limited products. Customers have the option to either order and
collect their product the next day, or have it home delivered.

Unlike a self-serve retail store, in a catalogue showroom (store) most of the items are not displayed;
customers are asked to view the products from printed or online catalogs in the store and are asked to
fill out an order blank.

The order is then brought to the sales counter, where an associate arranges to retrieve the items from
the warehouse or if so desired by the customer assures to deliver the same at call and collect center of
the customer’s choice upon receipt of payment. Thus, catalogue serves to act as an interface between
the product and the customer.

Stores have an advantage of allowing the customer to get the merchandise immediately after they pay
and buy it. Paying up for a product online through a credit card and waiting for the product for a week
or so mellows down the customer satisfaction.

Indian customers are different. They want to touch, feel and smell various products like staples, apparels
etc. Otherwise customers don’t get convinced about the product quality.

Store shopping can be a stimulating experience for some people, providing a break from the routine and
enabling them to interact with people and friends around. This experience is evidently missing in this
kind of format. Argos is winding up its two year trial operations in India that includes five stores in
Mumbai and telephone and internet ordering service, which it was offering in conjunction with
HyperCity.