This week Argos announced that it would be realigning its strategy to become more digitally focused. According to The Guardian, Argos wants to become a ‘digital-led retailer’ with new initiatives to provide a wider range of products and attract a new demographic of customer who are more affluent and have higher disposable incomes.

Argos has come under some criticism for its current business model and is supposedly “dragging itself into the 21^st century by giving the business a digital overhaul”. In Argos’ defence, the company is already hugely successful online. Argos is the most visited multi-channel retail website in the UK (i.e. not an online pure-play retailer) and accounted for 9% of all visits to the top 100 multi-channel retailers last week.

Even when we bring in the online-only retailers, Argos is second only to Amazon UK in our Hot Shops list which we produce in conjunction with IMRG. The problem is that Amazon is the dominant market leader in the retail space and competing against Amazon is tricky to say the least. You can see from the graph below that Amazon UK receives four times as much traffic as Argos in a typical week.

Amazon is also the first place people want to check for price comparisons after they have made a visit to Argos. In September 5% of all visits leaving the Argos website went directly to Amazon. 1% of all searches immediately after a visit to Argos were also for the Amazon brand.

Although there are many things Argos could do in order to start optimising its web pages more effectively to compete against Amazon the fundamental issue is in attracting the right kind of customers to the Argos website. Organic SEO and more efficient paid search will bring more traffic to the Argos website, but if Argos are to increase revenues then they need to attract more of those high-value customers.

A look at Experian’s Mosaic demographics reveals that Argos currently gets a lot of its traffic from lower income demographic groups. The more affluent groups of Internet users such as Alpha Territory, Liberal Opinions and Professional Rewards are among the poorest performing groups for Argos.

Part of the problem with demographics is it is understanding what an audience looks like is one thing, understanding how to attract more of those key customers can be much harder. If part of the digital strategy is to attract more high net worth individuals then Argos needs to understand where these demographic groups hang out online. Fortunately the Experian data can show lots of online behaviours from the social networks these groups interact with to the products they want to buy for Christmas. By understanding who this audience is, and their online habits, Argos can start to be smarter about the way they advertise online to attract these new target demographics.

For more information on how Experian can help you understand your audience or improve your digital strategy, please visit our website or follow us on Twitter.