Impact of COVID-19 on Argos Growth in the Retail Sector

This article discusses the negative impact of COVID-19 on Argos growth in the retail sector. It explores the trends in the retail sector, analyzes the organization, and provides recommendations for survival and growth. The article emphasizes the need for innovation, technology adoption, online business models, supply chain integration, and expansion into emerging markets.

Inquiry based learning
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Trends in retail sector.................................................................................................................3
Analysis of organization.............................................................................................................4
Recommendations........................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9
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INTRODUCTION
There has been both positive and negative impact on retail sector due to covid 19. The
decline in global economic growth has reduced profit of Argos but on contrary demand of retail
product is increased as it fulfill daily needs of people. With that many trends has emerged in
this sector.
MAIN BODY
Trends in retail sector
Due to covid 19 pandemic there has been transformation in retail sector. It has entirely
changed the industry (Biscaia, and et.al., 2017). There is also a rapid growth in it because it
provide essential goods to people for fulfilling their daily and basic needs. Moreover, many new
trends are emerging in this industry which is shaping it. so, there are various trends in it which
are defined as below
Personalized retail experience- this trend in emerging in retail sector as consumers are now
preferring to have personal shopping experience. It has enabled in giving suggestions to
consumers regarding their taste, needs, wish list, etc. so, through that it has become easy for
companies to determine their needs and provide products accordingly. Thus personalize
experience include chat bots, text message, pop ups, etc. therefore, this has enabled in using
advance and high tech technology in it such as AI, etc. hence, retail industry must invest in use
of technology which will enable in retaining to customers and generating more sales and profits..
Growing culture of immediacy – due to covid 19 there has been change in consumer
expectation. Now they want quick delivery, response, etc. also, people do not like to wait for
long time for order to get delivered. this trend has emerged very quickly. So, it require retail
industry to speed up their processing and delivery process. Alongside, they need to expand
their services and supply chain network so that products are delivered quickly within short
period. Moreover, services such as update inventory in real time, offering delivery within 24
hours, etc need to speed up. Through that consumer expectations can be addressed. This will
also lead to improve experience as well. the retail companies will be able to survive in
industry for long term (Chiguvi, 2020).
Use of digital wallet- the pandemic has provided an opportunity to use digital wallet system. It
is because many people own smart phone. Also, use of wallet is increased as it provide a
contact less payment method due to covid 19. Besides that, it has provided a flexible payment
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system. However, there are many third party and digital wallet companies which is providing a
digital wallet such as Amazon pay, Apple, paypal, etc. apart from it, offering of discount and
cash back system has attracted a lot of customers towards use of it. the retail organization are
collaborating with those companies to provide digital wallet.
Expand in other markets- now, retail industry is trying to expand in emerging market where
there are vast number of opportunity of growth. this is done in order to attract more customers
and generate revenue. For instance- Alibaba has started operations in Dubai, Australia, etc.
similarly, amazon has also expanded into other countries. Furthermore, it is done by creating
awareness among people through digital strategy. Also, people will continue to shop online
more due to pandemic. Hence, it will led to expansion of sector in global market. In addition,
use of omni channel strategies is applied by firms. It has provided a unique shopping
experience to customers similarly like a brick and mortar model. Company are able to find out
entire customer journey map and how they engage with it and took decision (Filimonau, and
Gherbin, 2017).
Use of technology – the covid 19 pandemic has forced retail sector to use and implement
advance technology in their operations. They are all focusing on concept of contact less
delivery so that people safety is maintained. In addition, robots and AI are used in operations
so that employee safety is maintained as well. for that investment has increase in R&D to
innovate new process and methods. Also, new policy and rule is formed to follow social
distancing at workplace with use of technology.
Analysis of organization
Argos is catalogue firm operating in retail sector in UK. It is having total 883 shops in
UK. They are largest high street retailers and 29768 employees are working in it. the company
was founded in 1972 by Richard Tompkins. It offers consumer goods to people. As it is
analysed that there has been a great impact on covid 19 on economic growth. Likewise it has
also impacted on retail sector as well. Argos is also affected due to it. so, it is found that as
company majorly do business in bricks and mortar model. Also, they are having 883 stores in
UK and neighbouring countries (Kautish, and Sharma, 2018). Thus, when pandemic started
spreading in April the UK government imposed lock down in entire country. Due to that local
markets and shops were closed. Therefore, it highly impacted on sales and profits of Argos.
This is because they have to shut down their stores as well. however, as major sales of
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company is done through these stores. Hence, there was high decline in their revenue. However,
as company have website through which customer can order products but due to covid 19 there
was not as much sales generated as compared to stores. Argos was not getting large number of
order from customers. And even if they got it was not delivered as factors were closed down
and there was no production going on. Hence, Argos fulfilled order from the remaining stock
which was kept. Furthermore, customers started getting order from other retail firms as well in
order to fulfil their needs. So, with decline in sales Argos growth was highly affected in
negative way. Due to that they have to lay off some employees as well.
But on other hand, the retail sector growth was rising with increase in demand of
consumer goods from customers. There was imbalance between demand and supply. Besides
that, it is found that Argos growth was impacted as they were not having enough supplier to
deliver products to people. due to covid 19 organisation has to work with less staff so the
goods produced are in less quantity (Naidoo, and Gasparatos, 2020 ). This is not enough to meet
and fulfil market demand. There is also affect on market share of Argos with decrease in share
value and growth of firm. in addition, customer base has decreased as many of them have shifted
towards other retail firm. this is because during lock down Argos was not able to fulfil their
needs. Thus, by providing high quality and new products other retailers have broken down
customer base of organisation. Moreover, in recent time, due to covid 19 there are many stores
of company which is still closed. This is because with decline in profit they are not having
enough operating cash to run stores. Other than this, there is no support given by government as
well. The market share of e-commerce rapidly increased to almost 10% of total consumer goods
sales during the confinement period, compared to less than 6% in 2019
Therefore, it is analysed that there is high impact of covid 19 on Argos growth. It has
led to decline in sales and profits as well as closing of many stores with insufficient operating
cash to run them. the organisation has also lay off many staff and there is reduction in salary of
them. so, entirely dependent on bricks and mortar business concept has resulted in impacting on
high decline in Argos revenue. Now, it requires company to focus on online concept in order to
track back their progress and growth. Through it, they can attract more customer and fulfil
demand easily (Nash, 2019).
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Recommendations
From above analysis it is identified that there is a great negative impact on growth of
Argos due to covid 19. This is because it has led to decline in economic growth of global
economy. Thus, such a difficult times it is necessary for Argos to remain survive in market and
compete with rivals. it will enable in gaining competitive advantage and maintaining customer
base. For that they require to follow certain recommendation which can be applied They are as
follow:
The company can innovate new products and services in order to fulfil customer needs. This
can be done by doing market research and finding out people needs in various markets and
then producing products. So, with that it will be easy to attract new customers and generating
more sales and revenue. For example- Argos can produce hand sanitizer, immunity booster
powder, goods, and other products. However, having more variety and unique feature in
products will attract people. besides it, business can maintain quality of goods as well to ensure
customer safety (Roy, and et.al., 2018).
Argos can install new and high tech technology within their operations. They can create a
completely contact less production and delivery process. In that robots, AI, IOT, etc and other
technological software and applications can be used. Through it, entire process will be
streamlined. Technology can be used in quick delivery as well. Argos can start 24 hours
delivery method. So, integration of both contact less and quick delivery will provide a
platform to grow and expand. They will be able to attract more customers and improving
shopping experience as well.
The organization should focus on online business model. They must shift follow concept of 80-
20% . it means that 80% focus online and 20% on brick and mortar business. For that digital
marketing strategy is developed and advertising is done via social platform such as Facebook,
instagram, etc. so, it will enable in creating awareness within people and attracting them. The
company should provide all product info online to customer and take their feedback as well.
going online will led to rise in sales and profits. Argos can gain competitive advantage as well
through it.
The firm can integrate their entire supply chain and install block chain technology in it. through
that it will provide a real time data about inventory and stock and it can be quickly updated on
website. Therefore, customer will be able to get quick info whether product is available in
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stock or not. Similarly, supplier will also get update about stock and update it on database. This
can streamline overall supply chain and speedy delivery of products to customers. Furthermore,
through it Argos can expand market into wide area that at global level. In this way sales and
revenue can be increased (Sigarev, , and et.al., 2018).
Argos must enter in new and emerging markets such as India, Dubai, Japan, Australia, etc in
order to grow and develop. This will enable them to attract more people and increase customer
base. Henceforth, company can attract customer by offering them promotional offers and
discounts, rewards, coupons, etc. they can also provide new products to them to fulfill their
needs. So, in this way organization can enhance marker presence at global level and survive in
retail sector for long term.
The firm can implement a customer centric approach in which they focus on interacting with
them personally. It will enable in getting insight about customer needs, taste, decision making
process, etc. so on basis of that products can be manufactured and offered to them. Alongside,
Argos should improve customer experience through this approach. Thus, everything will revolve
around customer and in this way market trends is evaluated. It will enable firm to retain
customer and build a loyal base.
CONCLUSION
It is summarized that covid 19 has highly affected on retail sector. Argos is highly affected
in negative way due to pandemic. It has resulted in decline in their sales and profits. also, there
are many trends which are emerging in this such as contact less delivery, use of digital wallet,
growing culture of immediacy, etc.
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REFERENCES
Books and journals
Biscaia, A.R., and et.al., 2017. Assessing customer satisfaction and loyalty in the retail
sector. International Journal of Quality & Reliability Management.
Chiguvi, D., 2020. The Influence of After Sales Services on Marketing Performance in the Retail
Sector in Botswana. Dutch Journal of Finance and Management, 4(1), p.em0060.
Filimonau, V. and Gherbin, A., 2017. An exploratory study of food waste management practices
in the UK grocery retail sector. Journal of Cleaner Production, 167, pp.1184-1194.
Kautish, P. and Sharma, R., 2018. Consumer values, fashion consciousness and behavioural
intentions in the online fashion retail sector. International Journal of Retail &
Distribution Management.
Naidoo, M. and Gasparatos, A., 2018. Corporate environmental sustainability in the retail sector:
Drivers, strategies and performance measurement. Journal of Cleaner Production, 203,
pp.125-142
Nash, J., 2019. Exploring how social media platforms influence fashion consumer decisions in
the UK retail sector. Journal of Fashion Marketing and Management: An International
Journal.
Roy, S.K. and et.al., 2018. Predictors of customer acceptance of and resistance to smart
technologies in the retail sector. Journal of Retailing and Consumer Services, 42, pp.147-
160.
Sigarev, A.V., and et.al., 2018. The role of chains in the Russian retail sector.
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