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ParcelHero ponders Tesco’s latest nationwide online service

ParcelHero ponders Tesco’s latest nationwide online service

E-commerce delivery expert ParcelHero has said Tesco’s launch of UK nationwide grocery deliveries before Amazon acts as no surprise; as Tesco was the first company ever to ever sell online.

ParcelHero’s Head of Consumer Research David Jinks MILT said: ‘In May 1984, in Gateshead (a town in Tyne & Wear, England) the world's first recorded online home shopper, a 72-year-old grandmother named Mrs Jane Snowball, purchased groceries from her local Tesco store - in the world's first ever online shopping transaction from the home.’

Jinks continued: ‘Mrs Snowball’s name proved prophetic as the new form of retail snowballed. From this humble beginning, the internet has been encroaching on the retail market, (ironically including Tesco’s supermarkets); and e-commerce is now becoming so established and convenient that the familiar High Street supermarket could vanish far sooner than anyone expects.’

Tesco’s has never lost its enthusiasm for e-commerce. In 2016 it was the largest UK-owned business selling online, and second only to Amazon in internet sales – Tesco’s selling £2.9bn of groceries and products online, against Amazon’s £4.4bn.

Jinks stated: ‘Tesco’s has never held back in pushing new sales technologies, and it really is no surprise it has beaten Amazon to the punch in enabling same day deliveries to around 99% of UK households. And it’s stolen a trick from Amazon in encouraging all-important customer loyalty by not, at first, charging for deliveries for members of its Amazon Prime-style delivery membership scheme, Delivery Saver.’

Same day deliveries are proving increasingly popular with Tesco seeing an 18% growth in demand for the service so far this year.

However, Jinks sounded one note of caution: “Amazon teamed up with Morrisons and has no supermarkets of its own to cannibalise sales from; but Tesco’s has over 6,500 stores. Every online grocery sale could be seen to be eating its own lunch. Of course, its huge number of stores are what enables Tesco to reach 99% of UK households; but longer term the growth in home deliveries must endanger some of its own stores, particularly large out-of-town supermarkets, as home deliveries wipe out the dreaded weekly groceries shop.”

Is this a retail war or sensible logistics?

The Institute of Couriers also chimed in with the debate of whether the retailer's decision to be the first to rollout its same-day service to 300 Tesco stores nationwide, to be completed the end of next month, ahead of Amazon Fresh, would lead to other competitors following suit or represents sensible logistics. Tesco Online managing director Adrian Letts retorted: “Customers tell us they like getting their shopping delivered quickly and conveniently, and with our same-day delivery service they can now order by lunch to get their shopping delivered for their evening meal."

Tesco launched the same-day service in London and the South-east three years ago, and will now etend its service to locations such as Shetland Islands in Scotland to Cornwall. Amazon takeover of Whole Foods last month is reported to have plans to roll out a sameday British version of AmazonFresh nationwide in the future. Like Tesco, it already offers this in parts of London. Customers will be able to order by 1pm to have their shopping  from 7pm onwards - seven days a week, according to the company. The service is priced between £3 and £9 but is being offered free for a limited period for members of its delivery saver service.

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