Argos to open 10 digital stores inside Sainsbury‘s branches


General retailer Argos is to trial 10 ‘digital‘ stores within existing Sainsbury‘ supermarkets. This follows the opening of 20 Argos stores inside Homebases – both are owned by the Home Retail Group – from April last year.

Customers will be offered a choice of 20,000 products which can be bought or reserved with a further 40,000 which can also be ordered for home delivery, all done via in-store tablets.

The location of the outlets, which range from 1000 to over 5,000 square feet, has not yet been announced but they are set to open by the summer. For comparison, Argos outlets are typically around 15,000 square feet.

John Walden, chief executive of Home Retail Group, said: “Our new distribution model allows us to provide customers in any Argos location with a choice of around 20,000 lines within hours, regardless of the size or stocking capacity of the store.”

The key point of this new distribution model is that more, smaller stores will be supplied several times a day by larger stores in a ‘hub and spoke‘ system. This will allow Argos to offer a same-day delivery service, which competitors such as Amazon cannot currently offer, from a wider range of locations. Walden continued:

“This strategic capability has opened up options for a variety of new Argos stores and formats, and the possibility that we can now cost-effectively reach more customers and neighbourhoods with an Argos presence. I look forward to the results of the ten store programme with Sainsbury‘s and to understanding the full potential of this exciting opportunity.”

Argos‘ traditional laminated catalogues are also being phased out, in favour of the aforementioned tablets: all part of a more integrated, fully-digital approach. Many Argos stores now also offer free Wi-Fi and 60 second collection for online orders.

In November, Argos opened its smallest store ever in Cannon Street Tube Station. In theory, exploiting the increasing provision of Wi-Fi on the underground and also allowing consumers to integrate collections of their goods more seamlessly into their daily routine.

The partnership comes in the wake of Sainsbury‘s forecast that 25% of its store estate will have under-used space over the next five years. Mike Coupe, chief executive of Sainsbury‘s, commented of the new Argos stores:

“They will bring something new and different to our customers, and fit well with our strategy of making our supermarkets more convenient. As well as looking at carefully selected partners, we continue to roll out our ranges of own brand clothing and general merchandise in our supermarkets to give customers even more choice and value.”

Is it possible that these sorts of partnerships will create a retail experience to rival Amazon‘s claim to be “The Everything Store”?