Argos has moved to undercut Royal Mail in its crucial parcels market in a new partnership with eBay that will see it deliver goods sold on the internet auction site.
The retailer, famous for its exhaustive catalogue of products, has been trialling ‘eBay counters’ in a handful of stores where customers can drop off items they have sold online and pay for delivery across the UK.
The two companies have been experimenting with a combined offering since 2013, when they began a ‘click and collect’ service where eBay buyers picked up their purchases in an Argos store. It is now in 800 branches and has handled 3 million parcels.
Working with delivery company UK Mail the two will now allow eBay sellers to pay for postage and delivery in Argos stores to addresses all over the country, aping the over-the-counter Post Office service at rates that it says are cheaper.
After a successful trial in Nottingham, Crawley, Portsmouth and Southampton, the company is now rolling the delivery service out to 150 nationwide in the next few months. Tanya Lawler, boss of eBay UK, said the partnership, “further dissolves the lines between digital and traditional retail.”
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Last month Home Retail Group, which owns Argos and DIY store Homebase, reported like-for-like sales down 2.8 per cent at Argos in the second quarter, which Alistair Davies, an analyst at Investec, described as “weak”.
Argos said it hopes the move into delivery will draw customers addicted to online shopping at home back into its high street stores. David Robinson, its chief operating officer, said as the company that “invented” the ‘click and collect’ model the move into delivery made sense.
“The ability for customers to get their purchases quickly, easily and locally has become the new retail battleground,” he said.
Like Royal Mail, Argos will offer next-day delivery on small, medium and large parcels but its prices are lower. A small parcel (up to 2kg) will cost £3.80, a medium parcel (up to 5kg) will cost £6.23 and a large parcel (up to 20kg) will cost £8.22p.
A pair of jeans weighs, on average, 500g with trainers weighing around 1kg, according to Royal Mail estimates.
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Royal Mail charges of £5.45, £12.98 and £33.01 respectively for next day delivery but said it allowed bigger parcels and pointed out its second class service for small parcels was cheaper at £2.80. However, it will take three days - rather than the two promised by Argos - to arrive. A spokesman insisted its “unrivalled” 11,500 branch network remained “highly competetive”.
The postal group has been struggling to keep up revenues in the face of a price war among delivery companies in the parcels market. In the first quarter of its financial year, the three months to June 22, it reported parcel volumes up 3 per cent and revenues up just 2 per cent.