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Retail marketing is in the midst of a major upheaval, and Argos' CMO Stephen Vowles, one of Hot Topics' 100 retail marketing leaders, discusses the value of the mobile channel.

When the then Managing Director of Argos, John Walden, embarked upon a vision to transform the British retailer into a digital retail leader, the man he had in mind to take on the top marketing role was Stephen Vowles.

At the time, Vowles was Director of Customer Experience at Ladbrokes PLC, where he had proven success in leading a company-wide digital transformation. Coordinating a team of 120, Vowles was tasked with re-invigorating the brand across traditional, digital and mobile channels.

“I was attracted to the role at Argos because I believed in the vision. Within marketing you’re always looking for a proposition that’s truly distinct and relevant, and this role was an obvious next step for me after coming from Ladbrokes and our digital marketing investments.”

That was in 2013. Walden is now CEO of Argos’ parent company Home Retail Group, and Vowles is three years into Argos’ digital journey.

“Although not loved by everybody, the gaming industry is on the leading edge of the digital revolution, especially in terms of e-commerce and marketing. I was able to bring those skill sets to Argos.

“Three years later, and the transformation hasn’t played out as expected – although, nothing ever does – as we’ve delivered a large amount of the change program that we had planned, as well as extras that weren’t originally anticipated.”

Today, internet transactions account for 49% of total Argos sales, with the entire group’s sales standing at over $8 billion (£5.7 billion).

Mobile commerce grew by 10% between 2014 and 2015, to represent 28% of total sales within the Group, and 25% of total sales at Argos.

“Mobile is huge for us. Argos got in early in mobile as it suited our model for convenience, speed and people’s habits of shopping on their phones. Our mobile-commerce initiatives are at the heart of our strategies.”

The retailer is a common site on British high streets, selling everything from jewelry to home electricals, furniture to technology, and is known for its large, warehouse like, stores where items are chosen from magazines on the shop floor and paid for and collected at checkout.

Vowles was tasked to lead a digital transformation, and he pushed for an omni-channel experience for his customers: in-store, online, and mobile access with a budget of $144 million (£100 million) annually to develop Argos’ customer proposition, marketing strategy and execution.

“We deploy a significant part of our digital marketing budgets through mobile channels, and we actually have quite a number of experimental retail mobile marketing activities. We feel these are at the leading edge of the industry, and anything that gives us competitive advantage is something we engage with.”

The mobile channel is not a new concept for consumers, but retailers in particular are still working out how best to utilize this platform.

Experimentation, or test and learn, is one way businesses are discovering best practices in retail mobile marketing, which is a foreign concept for a lot of larger coporates unused to lean startup thinking.

“Experimentation and having fun with retail mobile marketing is essential, because if you’re not, that ability to keep up and learn quickly is severely impaired.

“The UK retail industry moves fast, is highly compititve, and has low margins, so in order to stay on top you have to be willing to learn early on or face the consequences.”

As we move towards the midpoint in 2016 Vowles estimates that 70% of his customers engage with Argos digitally. In preparation for that he pushed through a series of internal changes to benefit the shifting habits of British consumers.

One such service was the development of its hub and spoke distribution network last year which enables same day collection of some 20,000 products.

Strategically, it allows different sized Argos stores around the country to have access to popular products online and deliver them to customers within a matter of hours.

“It’s one of the reasons why Sainsbury’s have agreed a merger with us – although not finalized yet – because they want access to this distribution model.”

Mergers and consolidation is one response from an industry still discovering ways to keep up with technological advancements and changing customer habits.

The future is still uncertain for many retailers but Vowles believes that Argos has “built something unique that will secure the loyalty of customers in the future, and that is quite difficult to copy.”