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Tesco prepares to halt drift of online customers to Amazon

Warwick Ashford

Tesco is preparing to halt the drift of consumers to online retailers such as Amazon for household goods as well as music and video.

This trend is well established in the US, where customers regularly buy items such as cleaning products from Amazon, as well as luxury items like books.

To prevent this drift, Tesco has hired one of Facebook’s senior European executives and is launching two specialist ebook and music retail websites to complement its Blinkbox online movie store, according to the Telegraph.

Gavin Sathianathan, Facebook’s head of retail for Europe, will lead Blinkboxbooks. Mark Bennett, head of Sainsbury’s digital entertainment unit, will lead Blinkboxmusic.

The three Blinkbox sites will be separate from Tescos’ main online store, but the supermarket will encourage customers use them instead of rivals for online purchases of books, music, films and TV box sets.

Tesco bought an 80% stake in the Blinkbox in 2011 to defend its share of the entertainment market against Amazon and Apple.

Blinkbox works in a similar way to rental services like Netflix or Amazon’s Lovefilm, but Blinkbox’s sales model allows it to offer recent box office hits much earlier than those rivals.

Tesco chief executive Phil Carke has said he wants Tesco – the world’s third largest retailer – to become the world’s biggest “multi-channel retailer”, combining physical and online stores.

In November 2012, Tesco announced a range of virtual technologies for customers to use in-store, as part of its multichannel drive.

The retailer introduced a virtual mirror into three of its stores to enable customers to try on clothes virtually. It is also introduced a giant 80 inch touchscreen for children to browse toys in its Cheshunt branch.

In April 2012, Tesco announced it was planning a £150m investment across all its dotcom businesses in anticipation of further migration of customer shopping habits online.

The news followed Tesco’s launch of the Marketplace section of its website to enable third-party retailers to sell products through the site with Tesco taking a percentage off each transaction.

The Marketplace is another key part of Tesco’s strategy to take on Amazon.


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