Argos Inquiry Project: Analysis of Retail Trends and Recommendations

This report provides an in-depth analysis of current trends in the retail industry, using Argos as a case study. It begins by outlining key trends such as safety and security, sustainable supply chains, sustainability, technology adoption, the shift to online channels, direct brand-to-consumer connections, a...Read More

INQUIRY PROJECT

Table of Contents
INTRODUCTION....................................................................................................................3
MAIN BODY............................................................................................................................3
Trends in retail industry.........................................................................................................3
Analysis of organization........................................................................................................5
Recommendations..................................................................................................................6
CONCLUSION.........................................................................................................................7
REFERENCES.........................................................................................................................8

INTRODUCTION
The report will define the current trends in retail industry. The company which has
been selected for this study is Argos. Argos is a retailer company which is operating under
the parent company Sainsbury. The company was founded by Richard Tompkins in the
November month of 1972. Argos is one of the biggest general merchandisers which is
offering more than 60,000 products through online and offline mediums. The company is a
technology-led retail company which is making effective use of technology in their
operations. This project will discuss the trends in the retail industry and will outline how
trends are been followed by the selected company with some significant recommendations.
MAIN BODY
Trends in retail industry
Some of the recent/ current tends which are followed within the retail industry are
discussed below:
 Safety and security- Customers and employees in the United Kingdom are placing a
greater emphasis on improved safety and well-being, which has an impact on companies.
Customers and employees in the United Kingdom appreciate merchants' efforts to
improve their health. This objective of pleasure is also tied to CSR (Chen, 2021).
Customers are valued based on how much a store's CSR initiatives contribute to society.
It also has something to do with the idea of buying something and paying a higher price
for it. Customers are more willing to spend more when a company makes greater efforts
to engage in CSR. Now that merchants are aware of the issue, they are taking steps to
improve the health of both customers and employees. Merchants' endeavours to improve
the well-being of customers and employees have become a trend in the UK retail
business.
 Sustainable supply chain- The COVID-19 pandemic has impacted negatively on the UK
retail industry's supply chain. Small and large corporate and industrial struggle to
maintain a robust supply chain and as a result, many are affected by supply chain
problems that can result in financial losses. Nowadays, retailers are increasingly
concerned with building a supply chain that can survive disruption (Constantinou,
Tsivitanidou and Rybska, 2018). There are fresh methodologies being applied, as well as

updated technologies. The application of blockchain in supply chain management has
grown in recent years. Blockchain technology, for example, allows businesses to better
track commodity flow and improve supply chain efficiency. Retailers are increasingly
looking to use current technology and strategies to make their supply chains more
competitive.
 Sustainability- The importance of sustainability in the development of UK retail industry
has increased. As sustainability is now inclined and more focused towards customers the
customers off retail industry are showcasing more efforts of companies towards
environment in community for long term. The companies which are focusing on strong
sustainable initiatives can attract higher number of customers. The customers are now
more aware of companies which are offering more sustainable products through which
they can get higher number of customer attention.
 Technology- The use of technology in business functions has been increased in the retail
industry. There has been a significant increase in the use of technology in company
operations in the UK retail industry. From sourcing to marketing and delivery, technology
is rapidly influencing every part of the business process (Decker-Lange, 2018). Retailers
are now using implementation of modern and data analysis tools and techniques to boost
their presence online which might provide data and insights for better customer
experience. As more stores employ technology to gain a competitive edge the emphasis
on technology in the UK retail industry has become a major trend.
 Channel shift to online- in the year 2020 the proportion off online sales was 28% where
in the five years the rate has seen growth in the same year. Due to the global pandemic
this has led to closure of hospitality services which derived customer attention to online
mediums in the retail industry. Around 46% of consumers make online purchase and this
shift is the current trend in retail industry which has been major change in the industry.
 Brand connecting directly with consumers- Customers are growing more comfortable
with making purchases directly from businesses due to the internet's ability to enable
enterprises to create customer-facing channels. Additionally, brands may obtain a deeper
understanding of their consumers which they can employ to improve the customer
experience and distinguish their products. To take full advantage of new opportunities,
retailers and brands will need to change their business models and learn new skills. Rents
are decreasing, making it easier to open own-brand stores that benefit from the halo
effect, strengthening their internet presence (Dobber and et.al, 2017). When it comes to

buying directly from brands, over half of buyers think pricing is the most important
consideration.
 Update in business models- New, more resilient business models will be required to
survive the constant transformation. Businesses will have to continually monitor,
analyse and respond to changes in the environment. Consumer behaviour is evolving and
it will need to be addressed particularly when long-term changes take hold. Physical
stores will need to play a bigger role. As quick strategy revisions are required to meet
constant difficulties, greater investment in IT, acquisitions and experience will be
required in general.
Analysis of organization
Analysis of Argos in terms of recent trends in the retail industry has been addressed
with the help of PESTEL analysis:
Political factors- Political factors play a crucial role which creates an impact on the
functions of Argos. The political factors such as- government regulations, taxation strategies,
employment regulations are highly flexible for business (Haavold and Blomhøj, 2019). The
company gain various advantages from favourable economic conditions which is helpful in
expanding the market niche.
Economic factors- As the company relies on road-based transportation, this can
increase the product pricing as this medium will involve cost of petrol and diesel as expenses
of the company. The emergence of new supermarket chains has always had a huge economic
impact on Argos in United Kingdom. Old rivals like as Asda and Tesco are still around, but
emerging competitors like Lidl and Aldi are proving to be a source of further rivalry in the
present market.
Social factors- A substantial amount of the company's revenue came from the selling
of fast-food goods at the brand's outlets. On the other side, the population of the United
Kingdom is gradually shifting toward a health-conscious diet that eliminates fast food. In
order to be relevant in today's socio-cultural environment, the brand will have to evolve. This
is a global trend that has a strong presence in United Kingdom and this shift in customer
behaviour has an impact on every major fast-food business. Another changing customer
behaviour that Argos should address is the fair-trade movement (Khalaf, Zin and Bt, 2018).
This comprises a price increase for grains, vegetables, and other agricultural items but

exclusively to support farmers rather than to enhance profits. Fair-trade items, such as
chocolate and coffee have an influence on customer behaviour and companies must ensure
that they are meeting those demands.
Technological factors- Companies all around the globe are learning more about their
operations due to the technological developments in analytics, such as the use of Big Data
and Artificial Intelligence concepts. Innovations in analytics might be used by supermarkets
like Argos to construct very reliable models that predict how much of a given product would
sell (to save waste) and at what price (maximizing profits). Argos will certainly benefit from
the development and application of these strategies. Customers prefer to purchase goods from
the convenience of their own homes now more than ever (Kopeinik and et.al, 2017). The use
of eCommerce in the food business is still in its early stages, so it will be interesting to
observe how supermarkets make the most of this rapidly evolving technology.
Environmental factors- Argos have a significant
carbon footprint that is unsustainable under present conditions. Given the current climate
change movement gathering steam in the UK, the business must demonstrate that it is
actively minimising its environmental effect. This includes coping with the amount of plastic
garbage it generates, fossil-fuel-based delivery techniques and the immense environmental
cost of operating a company of this size. Since it is the market leader, the company is under a
lot of pressure to respond promptly to current environmental challenges.
Legal factors- Any delays in regulatory approval might lead to market share losses
and competitors being able to provide a better experience for customers. Another important
aspect for which the brand should be prepared is the legal implications of the post-Brexit
economy. Many of its policies may need to be adjusted while functioning via channels that
are now outside of Britain's economic and political domain.
Recommendations
Some of the recommendations which can be helpful are outlined below:
 Cost minimization- Argo’s spending must be reduced as a result of its financial issues.
In this regard, it must examine the business processes and cost sectors carefully.
Decisions should be based on what provides the least amount of value to customers. Cost-
cutting measures can also be made through reducing employment (Lai, 2018). The

company no longer requires the same number of staff since the number of consumers and
consumer spending has fallen. It is possible to fire the employees with the least
qualifications and experience in this area.
 Customer service- There is no other way to improve customer service quality but to do
so on a constant basis (Lau, Lui and Chu, 2017). Customers should be satisfied even if
they make less purchases. Customer retention has never been more important to a
business. As a result, it should come first.
 Use of advanced technology- The use of advanced technology in business processes
generates positive outcomes and Argos should focus on this. The lean production
theory which focuses on waste reduction and value creation might be used in this
situation. This argument asserts that technology should be used to increase value while
simultaneously minimising consumer waste.
 Marketing- In marketing initiatives, personalization should be prioritised. A according to
a pattern analysis, consumers like customization which can be helpful in meeting
customer demands. As a result, marketing activities should be targeted to the individual in
order to increase customer retention.
 Sustainable supply chain- Transactions should not be made based on the supply chain's
current state (Younas and Noor, 2020). If the impact of COVID-19 on the supply chain is
crucial to learn from, it must be understood that the supply chain is not long-term and
open to instability. It's also critical to make judgments about the supply chain to ensure
that it can survive difficulties.
CONCLUSION
From the above report, it can be concluded that the change in trends is responsible to
create an impact on the revenues and profitability of companies operating within a retail
industry. As the current changes are responsible for creating an impact, this impact can be
positive as well as negative for companies. It can be seen that various factors can influence
the trends in an industry and are responsible for creating an impact on the profitability and
success of the company.

REFERENCES
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education. Educational Research Review. 22. pp.194-214.
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