Amazon takes on Tesco
Amazon was founded as an online bookshop and has also been successful in selling software, DVDs, and electronics equipment. Now it is branching out into online grocery and alcohol.
Amazon has launched its "beta" version of its grocery shopping site at the start of July and claims to have 22,000 product lines on its virtual shelves, including top brands such as Pampers, Uncle Ben's, Kenco, and Walkers, plus a number of lines of alcoholic drinks such as beers and wines. Some of these products will be sold by Amazon directly, and others will be coming from third parties selling their goods through the Amazon interface and paying Amazon a commission on sales.
However, there is more to food and drink retailing than simply having an enormous range of products. Any supermarket will tell you that how you arrange your stock is of key importance, and that's just as true in the virtual shopping world. My initial impression of the Amazon store was that it would be fine if I was looking for something specific and exotic such as the Russian Caviar (£75.90 for 100g) but the site soon became confusing and overwhelming if I tried to do the equivalent of the weekly shop. I also struggled to work out why I found Golden Graham's breakfast cereal between the Kraft Balsamic Salad Dressing and the three pack of Aioli Garlic Mayonnaise, or why the Everyday Essentials category contains nothing but jars of Marmite.
My biggest criticism though was that like many online shops, the delivery costs were opaque and made more confusing because products supplied by outside retailers have their own additional delivery costs. While shopping it was impossible to keep track of how many different deliveries you are clocking up or how much you are really spending.
Why do so many online shops fail to spell out delivery costs until you have filled in half the order form, and why do they increasingly make it impossible to buy from them unless you first register as a member and obtain yet another username and password? When you walk into your local supermarket, do you have to tell them whether or not you are a returning customer before they will sell you a tin of beans? So why should online shopping be so much more intrusive? Computers are supposed to make it easier for everyone, not harder.
For an example of a small online food shop which we have recently set up for a customer and which we tried to make as transparent as possible, please see:
Do small enterprises find it difficult to get a toe-hold in the online market when competing with the retail giants? A recent study by the Office of Fair Trading into the services that small and medium sized companies need to use to trade online concluded that SMEs do not face major anti-competitive barriers. It did, however, acknowledge that the dominance of companies such as Paypal and Google could cause problems for firms that were completely reliant on them. I think that understates the problem. One of the best ways to boost the British economy and make it easier for SMEs to trade online would be for the British banks to work together to create a more affordable and easy to use online payment system.
23rd July 2010
This article comes from the SKILLZONE email newsletter, published monthly since January 2008, and covering topics related to technology and the internet. All articles and artwork in the SKILLZONE newsletter are orignal content.