Tesco and ONdigital have collaborated to offer grocery shopping through the TV. Since Tesco is the world’s largest online grocery retailer, the service should boost the tiny but growing TV commerce market. Whether it will contribute much to Tesco’s sales is another question: many couch potatoes may not yet be ready for armchair shopping. Still, the service won’t cost Tesco much to roll out and gives it an iTV presence for the future.
By the end of this week UK supermarket Tesco’s Access service will be up and running through the TV. The service will be promoted on ONdigital’s ONnet service, allowing the TV firm’s 1.09 million subscribers to pick up a virtual shopping basket and browse through Tesco’s online store.
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Tesco is already the world’s most successful online grocery vendor. It has almost one million online registered customers and receives 70,000 orders per week, worth over GBP6 million. As well as benefiting from Tesco’s real-world reputation and expertise, Tesco’s online offering also benefits from a wider a range than its competitors. This will be carried over to the TV commerce (tCommerce) service as well, with a full groceries range available at launch. CDs, DVDs, home and electrical goods will be available later.
Though the service mainly targets TV shoppers, the site is also available as a normal website for the visually impaired, customers on hand-held devices and customers on a slow Internet connection. This aspect of the service is undeniably a good move – Tesco is increasing its potential customer base at little cost.
Many commentators, however, have expressed doubts over the potential of the TV shopping part of the strategy, citing the so far low uptake of tCommerce. Global revenues from TV shopping are indeed currently miniscule compared with those from eCommerce. However, the market is expected to reach over $100 billion globally by 2005 – and family purchases such as grocery shopping are likely to be among the most popular tCommerce applications.
Overall, it’s a low risk strategy for Tesco – the infrastructure is already in place, and the costs of launching the new site will be low. The initiative mirrors the ‘toe in the water’ approach Tesco adopted when it originally launched its online shopping service in 1996. The presence of a major eRetailer like Tesco should also encourage others to enter the tCommerce market.
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