Argos pushes for same-day-delivery

<p>The company’s Fast Track scheme will be the first available across the UK, seven days a week.</p>

Online retailers are looking for new ways to attract customers and Argos has stepped up to the challenge of how to deal with home deliveries by becoming the first British retailer to offer a same-day service across the UK up to 22:00, seven days a week, 364 days a year.

Called Fast Track, the service will cover the company's 20,000 most popular products. Customers will have the choice of four time slots throughout the day and there will be a flat delivery rate of £3.95.

The firm believes this "ultra-fast" service will be particularly popular in the run-up to Christmas.

John Walden, Chief Executive of Home Retail Group, which owns Argos, said the company has been an industry leader for years. 

"Argos led the way with Click & Collect 15 years ago," he explained.

He said that customers can continue to shop in the traditional ways if they choose to, but that Fast Track is the "next big innovation" and brings the firm's offering into the digital age. "No other retailer can offer the breadth of products immediately or at that speed," he added.

Delivery costs

Critics question whether the Fast Track service from Argos will be successful – and if the company can afford it.

In July, Tesco became the second big retailer to start charging customers for in-store collection. John Lewis switched to charging for the service on orders worth less than £30, saying it could no longer absorb the cost of free deliveries.

However, Argos says it has the necessary infrastructure to keep costs low.

The firm rolled out a new UK-wide delivery system last year. It has big warehouses and around 150 larger hub stores, which can quickly replenish smaller stores with the most popular stock.

Argos is also in the process of hiring nearly 2,300 permanent drivers to make home deliveries from the hub stores. The company is also recruiting 1,000 temporary drivers for the peak Christmas period.

While the Argos scheme may be the biggest – it's not the fastest. Earlier this year, Amazon launched Prime Now, which offers shoppers in parts of London and Birmingham to order via a mobile app and get products within an hour. However, the service is only available to Amazon Prime members.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.